Trump is pushing the world into recession. By learning the lessons of 2008, we can still prevent it | Gordon Brown
NIt remains more than a narrow window of opportunities if we want to prevent unnecessary global recession. While China and the United States are separated, Simple commercial wars Intensify and threaten to go to currency wars; Import, export, investment and technology ban; Financial fire sales that will destroy millions of jobs worldwide. It is hardly reliable that the world is brought to its knees by one economy, and 96 % of the population lives outside it, who produce 84 % of the world’s manufactured goods. But although American officials had previously talked about a “tariff” policy “”Rising to cancel manufacturing“, Donald Trump’s goal is to force manufacturing to the United States, and it does not mean that he relaxes for 90 days for some definitions that he intends to defuse the crisis.
On Monday, Kerr Starmer warned that the world would not be the same again, and We mentioned “Trying to manage crisis without a fundamental change only leads to the orbit decrease.” He is right. As I learned in the 2008 financial crisis, global problems require global coordinated solutions. We need a bold international response and a decline in the range of emergency. In the same way, according to his great credit, the Prime Minister was building An alliance in defending UkraineWe need an economic alliance for the users: global leaders who are similar in thinking and who believe that, in an interconnected world, we have to coordinate economic policies across continents if we want to protect jobs and living levels.
The immediate challenge is to reduce shocks on the side of the width resulting from Trump is a tariff wall. like Rachel Reeves suggestsWe need to maintain the trade of the world. There are no crisis at all, but providing an extended credit for exporting and importing companies was essential in Global response With the collapse of trade in 2009. We also have to remind China that if it wants to present itself as a free trade champion, it is in its interest to focus more on expanding local consumption of dumping the world’s markets with cut price commodities that she cannot sell now in the United States.
However, global challenges go beyond the management of customs tariffs. Fresh trade will not be easy without coordinating macroeconomic and financial policies across continents. Global inflation will increase, even after taking into account the contraction of low -price Asian exports. But this shock exceeds a greater problem: the collapse of consumer confidence and the low investment in business. This means that we may need a simultaneous decrease in interest rates – an initiative that the United States may join – with the support of financial activity in countries where there is space for expansion.
Our international economic institutions have been built on the belief that if the prosperity must be shared, you will not be able to achieve economic success everywhere you were not ready to act anywhere where there is a need. With or without the help of the United States, we must fill out immediately Grant and loan capacity of $ 150 billion for the World Bank and Financial authority worth 1 Train in the International Monetary FundNot the least assisting the most vulnerable developing economies, developing. In 2009, it was a mixture of commercial credits and multilateral banks that support the global economy $ 1.1TN And prevent stagnation to go to depression.
The coordinated approach gives us the opportunity not only to achieve stability in the global economy, but – to use a phrase from 2020 – “better building”. For the United Kingdom, this means working closely with the European Union. In fact, the ongoing changes in Europe He made cooperation possible more comprehensive than removing commercial barriers after Britain’s exit from the European Union. There has always been a tension between Europe’s desire to drive, making it bold, and its desire to remain united, making it shy, but Europe today has less enlargement than the United States, and it can reduce interest rates faster.
The spending of deficit in the United States since 2010 has been many complications of the eurozone, leaving Germany in particular with relatively less debt than the United States. With the financial flexibility established by the upcoming German advisor, Fredchich Mirz, and the European Union, new resources can be injected into the global economy. This can be done by implementing Druze report on European competitiveness It will complete the spending batch in China. At the same time, UK-European Union cooperation The agreement must be expanded to enable joint weapons purchases and more cost. To issue resources elsewhere, we must submit discussions about the defense and security fund at the level of Europe in Europe.
Europe may be asked to lead to respect for another if the United States is ready to work as a lender in the last resort to the world in doubt. Global Financial Stability Council It should be asked to immediately report the risks that you may need to be addressed in banking and non -banking sectors. If this becomes necessary, the European Central Bank can also demand filling a gap left by the United States (which China is trying to occupy) by extending currency bodies to a broader group of countries that need liquidity support.
The coordinated multilateral action is necessary if Britain wants to secure the growth of the exports we need. This growth will be shipped by re -focusing the industrial policy of strengthening the internationally competitive sectors – from life sciences and AI, to the transition of energy and creative industries. The strengthening of these global groups requires us, such as The counselor saidTo invest in a great way in research, development and high -level skills. But it is also required that we link a pro -competition system that does not prefer technology giants at the expense of their smaller competitors in the United Kingdom, or to reduce copyright laws and intellectual property of creative talents.
Not only is the multilateral economic system that is assaulted, but every pillar of the rules -based system, from respect for the law to self -determination of countries and historical obligations towards humanitarian aid. In fact, we are witnessing a simultaneous collapse in economic and geopolitical orders. In a follow -up article, I will suggest how we can build a new thing, which quickly became the ruins of the old. But first, we need to show that the world can behave together to support people’s living levels. Doing this will be explained by the basic principles at stake: that international cooperation is in our collective interests, and that the world of competitive nationalist nationalities all leave us poorer and less safe.
