August 16, 2019
To Avert Recession, End the Trade Wars
The world economy is showing signs of weakness, and many analysts are predicting a recession. There are plenty of signals to support the predictions. According to Bloomberg, China reported the weakest growth in industrial output since 2000; Germany’s economy shrank as exports slumped; and euro-area production plunged the most in more than three years as the overall expansion cooled.
Naturally, economists are suggesting any number of measures that policymakers could take in order to avert a recession or at least mitigate its effects. From our perspective, one of the most obvious would be for the U.S. to end its global trade wars.
The trade wars are clearly hurting domestic business investment and global consumer spending.
President Trump might view a weakened Chinese economy as a positive development to help in trade negotiations. The problem is, countries are interconnected in a global trading network, so weakness in one big economy has a ripple effect into other countries, including our own.
Even President Trump himself seems to understand that ending the trade war with China (“winning big on trade”) would help boost the American economy. He tweeted, “The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election. The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!”
The future might look bleak right now, but the good news is that there are some obvious ways to bolster the economy and ending the trade wars is just one of them.
We urge the President to end the trade war and keep our economy from falling into recession.