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America the problem: A world turned inside out
Long the anchor of the rules-based international order, the US has turned protectionist, posing major risks to an already fragile global trade cycle.
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United States President Donald Trump delivers remarks at the Business Roundtable's quarterly meeting at the Business Roundtable headquarters on March 11, 2025, in Washington, DC. (AFP/Getty Images/Andrew Harnik )
T
he world’s major growth engines are about to run in reverse. The policies and uncertainties of United States President Donald Trump’s second administration have hit a sluggish global economy with a transformational exogenous shock.
Risks are especially worrisome in both the US and China, which have collectively accounted for a little more than 40 percent of cumulative global GDP growth since 2010.
America is now the problem, not the solution. Long the anchor of the rules-based international order, the US has turned protectionist, posing major risks to an already fragile global trade cycle.
At the same time, Trump’s Make America Great Again (MAGA) movement has driven a powerful wedge between the US and Europe and divided North America, with Canada’s very independence in Trump’s crosshairs. The central role of the US in sustaining post-World War II geostrategic stability has been shattered.
The US will be unable to put the genie back in the bottle. Trump’s shocking actions have eroded the trust that has underpinned America’s global leadership, and the damage will be evident long after Trump has left the scene. Having once abdicated its moral authority as the anchor of the free world, who is to say it can’t happen again?
This breakdown in trust will cast a long and lasting shadow over economic performance, not least in the US itself, where it is affecting business decision-making, especially the costly long-term commitments associated with hiring and capital spending.
Businesses need to scale their future operations relative to confident expectations of future growth trajectories, now an increasingly uncertain proposition. Asset values and consumer confidence, too, have been shaken. Uncertainty, the enemy of decision-making, is likely to freeze the most dynamic segments of the US economy.
