How this bout plays out is so profoundly unpredictable that to even try would induce opinion fatigue.
China’s leader, Xi Jinping, started a week of whistle-stop diplomacy in South-East Asia, in an attempt to shore up his credentials as the adult in the world’s room with a declaration that a trade war has no winners.
The heads of companies have all issued caveats about their prospects given the uncertainty created by Trump’s impersonation of a one-man wrecking ball.
But how China will ultimately respond is guesswork. Where China’s convention is typically to remain secretive and refrain from heralding its moves, Trump’s is to declare his world-altering tariff policy agenda in a manner more akin to a bout of social media diarrhoea.
The rest of the world is largely both in the dark and collateral damage.
And how this damage is felt will ultimately be in a slowing of world economic growth and potentially even a recession.
What we now do understand with hindsight is that the supply chain disruption caused by COVID was responsible for a breakout of inflation across the world – and one with a sufficiently long tail that central banks are still dealing with its consequences.
Chinese President Xi Jinping wants to be seen as the adult in the world’s room.Credit: AP
That same cacophony of alarm bells from experts signals that Trump’s plan to erect trade barriers – and reciprocal responses from other nations – will feed into a new bout of inflation.
At this stage, and given the moveable feast that is Trump’s trade policy, it is impossible to determine if the world is in for a short-lived shock or a case of long COVID.
Quarterly earnings reports over the past week show that major corporations have fared well in the first three months of this calendar year – before the arrival of Trump’s declaration of “Liberation Day”.
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But the heads of companies have all issued caveats about their prospects given the uncertainty created by Trump’s impersonation of a one-man wrecking ball.
One industry executive I spoke with this week said his company had mapped out the scenarios of how this plays out, but admits the only sensible mitigating response is to rely on geographic diversity and keep costs under control.
So how does one find a vaccination for Trump?
He appears to be immune to the recent polls that suggest his popularity is waning on Main Street. Wall Street and the potential pain inflicted on the tech bros that supported him has had some impact, but they remain vulnerable, and their share prices have plunged.
The bond market vigilantes appear to have been responsible for a 90-day reprieve in the imposition of additional tariffs on all, but China seems to have served as some restraint.
Let’s hope someone develops a jab in the arm soon.
It took only nine months between the outbreak of COVID-19 in early 2020 and the development of a vaccine in December.
Another three-and-a -half years of Typhoid Trump will be difficult to endure.
