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.... "So why is business investment declining
 for the first time since early 2016?

It’s tempting to point a finger toward President Trump, and he’s certainly
part of the story: His escalating trade war with China, his use of tariffs
against both friends and foes, his withdrawal from the Iran nuclear deal
and even his hot-and-cold re-engagement with North Korea have help push
global politics off its axis.

But the world’s troubles are more complicated than any one American
president could create. Trump isn’t the reason the United Kingdom voted in
2016 to leave the European Union, or why the British now face a
constitutional crisis. Trump isn’t the reason that more than 70 million
people <https://www.unhcr.org/uk/figures-at-a-glance.html> around the world
are refugees, asylum seekers or are otherwise displaced; that Germany’s
establishment parties are at their weakest
<https://www.bbc.com/news/world-europe-41376577> in the Postwar Era; that
Italy struggles to keep governments together
or that populists on the left
 and right
winning support in the world’s advanced industrial democracies.

The old American-led world order is unwinding. Trump isn’t the cause. He’s
merely its most visible symptom....

But whenever Trump leaves office, the world won’t snap back to a moment of
seeming post-Cold War clarity, when U.S. power gave Washington a dominant
global influence. The United States will not reemerge, post-Trump, as the
world’s policeman, trade architect or cheerleader for small-“L” liberal
values again. Nor will the United States again blaze the path for a free
trade agenda that many Americans blame for the loss of manufacturing jobs
or write the standards that govern use of the world’s emerging
technologies. The American-led world order has been fracturing for a
generation, and business decision-makers have begun to take notice."

Today’s true worry is a *geopolitical *recession, a storm forming for
nearly a decade. The Pax Americana phase of history, when many assumed the
United States would indefinitely stand astride the narrow world like a
colossus, has given way to a G-Zero world, one where the old Group of Seven
table no longer defines the world’s balance of political or economic power,
and one in which economic benefits don’t flow as readily toward America.

The postwar Bretton Woods
<https://2001-2009.state.gov/r/pa/ho/time/wwii/98681.htm> international
economic system, championed by Washington, was designed in part to help the
world rebuild from a devastating war, and later to offer newly independent
states a path toward prosperity not dependent on indefinite support from
former colonial powers. It was also created to grease the skids for
American business by giving U.S. policymakers a big say in ensuring that
economic systems in these countries were cast in an American image and open
to U.S. trade and investment. American aid and the promise of access to
American consumers gave Washington enormous international clout.

Yet the world’s balance of force is no longer nearly so clear. Voters in
the United States and Europe are preoccupied with local and national, not
international, worries. China has grown from poverty to power, and it now
offers the world alternative models of trade, investment and politics.
Global governance is now at its least coherent point since World War II,
and individual governments are much less equipped to deal with
international crises.

Businesses have ignored this emerging reality in recent years, but now this
lack of direction and confusion about the future have become unavoidably
obvious. Trump’s erratic policy swings have brought these realities into
the open and, yes, exacerbated their effects, but suspicion of trade and an
America First attitude have champions in both parties. (It was Sen. Bernie
Sanders (I-Vt.), not Trump, who pushed 2016 Democratic presidential nominee
Hillary Clinton into retreat on her pro-trade campaign agenda.)

It isn’t Trump electing so many outsiders to positions of power around the
world these days. The sources of angst vary from country to country, but at
root is inequality — of wealth, resources and opportunity. Both within
individual countries and among them, there is suspicion that some have more
than others for reasons neither natural nor fair. This reality has given
rise to politicians willing to use bitter divisions for political gain.
These are serious, structural problems that won’t soon be resolved. They
will be exacerbated when climate change and access to new technologies
further widen wealth and opportunity divides. And now global economic
growth is slowing
compounding these tensions.

Who can blame companies reluctant to invest in this environment?
Risk-taking is daunting even in predictable times. But to illustrate the
reality that Trump’s eventual exit won’t quickly prompt an investment boom,
look to the biggest driver of near-term uncertainty in today’s global
economy: The U.S.-China trade war has destabilized the world’s most
important bilateral economic relationship....

Trump has worked to weaponize trade as a tool of foreign policy, but China
has been doing it longer and much more effectively, in part because Xi,
unlike Trump, has little fear that voters, opposition lawmakers or an
independent judiciary will stand in his way....

A geopolitical recession makes crises more likely. What if cyberattacks
between Russia and the United States escalate into damage to each country’s
critical infrastructure? What if an accident in the Persian Gulf or the
South China Sea sends local powers stumbling into a shooting war? What if
Venezuela’s regime collapses? Sound far-fetched? So did the Arab Spring
uprisings, Syria’s civil war, Russia’s lunge into Ukraine, the Brexit vote,
and election surprises in the United States, France, Italy, Mexico and

This uncertainty is now fueling fears of an economic recession in the
United States. The reluctance to invest can, of course, make anxiety over
possible recession a self-fulfilling prophecy, and the prospect of
contraction in the world’s largest economy then stokes fear of a global
slowdown. Trump isn’t helping, but this will remain a challenge for the
next president, whomever that may be and whenever that person arrives."


John Reimann
*“In politics, abstract terms conceal treachery.” *from "The Black
Jacobins" by C. L. R. James
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