Only Donald Trump Can Save the Global Economy
Central bankers can use all the tricks in the book, but they'll need a truce in trade wars to rekindle growth.
Trump’s trade wars are impacting spending decisions around the world.
Photographer: Al Drago/BloombergAs the global economy shows signs of stuttering, the race is on to find the right policy response. In Europe, many central bankers are asking politicians in countries such as Germany to unleash a fiscal stimulus to complement their recent monetary push. In the U.S., President Donald Trump is lambasting the Federal Reserve for failing to cut rates fast enough, letting the dollar appreciate excessively.
But any such antidote would only be a second best response to what is really driving the global slowdown. The world economy is suffering because of trade tensions and the pernicious effect that uncertainty is having on the spending decisions of consumers and companies. Until this is resolved, any other policy moves will only have a mitigating effect on growth.