War and Tariffs Are a Double Shock to the World Economy

War and Tariffs Are a Double Shock to the World Economy

The twin shocks of the Israeli-US attack on Iran and Donald Trump’s tariff war come as global GDP growth continues to slow precipitously. Given that it doesn’t take much to tip an economy nearing its “stall speed” into outright recession, these crises and their combined effects are setting the stage for a worldwide downturn.

War and tariffs are a double shock to the world economy

New Haven, USABy Stephen S. Roach. The outbreak of a new war in the Middle East, together with a destructive tariff war, makes for a lethal combination in a sluggish world economy. Notwithstanding the possibility of a tentative ceasefire, the odds of imminent global recession have increased sharply. One shock was bad enough. US President Donald Trump’s tariffs, wherever they eventually settle, imply downside risks to global growth. But the poten…