Deciplation of the spaghetti bowl from the definitions

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The writer is the head of the Queens College, Cambridge, a consultant for Allianz and Gramsi

A picture of business leaders, governments and investors are forced to do so Drink a fire hose in American policy It gained an additional complexity last week, as President Donald Trump announced a sudden stop of the high “mutual” definitions that were repeatedly characterized by constantly.

The result concluded financial markets and short and long -term economic predictions in the long run. To understand all this, allow me to suggest four fast food, to be less famous.

Trump’s 90 -day stop has been applied to all countries except China, which the White House says still facing a gradual tariff of 145 percent and which applied additional and other restrictions on the United States. On the contrary, the European Union has postponed its revenge, pending knowing whether there will be an additional stop or suppression of the button or rewind. Like others, he is also keen to know what Trump is thinking about the company’s private concessions.

Moving from what to reason, the last flood of comments from high -ranking management officials had a common element: the role of the bond market. They seem to realize the critical US Treasury Slide He was very close to the line that separates the unusual fluctuation from the market malfunction, as buyers and sellers cannot find a treatment price.

This happened in 2008 and 2020, when the turmoil spread through markets and economics at home and internationally, and the main circuit breakers of governments and central banks require.

Other factors that contribute to stopping the stark general warnings of prominent personalities such as the CEO of JPMorgan Chase Jamie Dimon. I also understand that there was an ice collapse of the anxiety calls to management, Congress and federal reserves. Then came a classic attempt to develop the narration to suit what happened: The temporary suspension was the plan all the time, after more than 70 countries contacted the administration to participate in negotiations with the aim of reducing the definition and non -sharp barriers against the United States.

At the beginning of the television cabinet meeting last Thursday, the president strengthened the idea of ​​the rugged journey, pointing to the “transition costs” and “transition problems”. After all, volatility is a feature and not a mistake from The art of the deal. The main thing for American families and companies to be remembered is the attractive destination.

This leads to the third point: drilling in the trip. There are risks of implementation related to winds, immediate stagnation; Interacting with the abolition of restrictions and the so -called government competency skin; It contains the main market removal; And obtaining other countries to make great concessions in the hope of ending the threat of commercial wars decisively and investment sanctions.

Meanwhile, based on gold prices and other partial indicators, the two countries seem to have accelerated diversification away from America, which considers the erosion of their safe position in the center of the global economic and financial system.

There are also operational risks. It is not easy to negotiate with many countries simultaneously, each in a different way, with the application of the company’s concessions. This spaghetti bowl succeeds only if the administration can solve internal differences on the primary goal of this trade war. Is it supposed to impose a more fair trade in a world of low definitions or zero, or raise large revenues and produce the beach permanently? If anything, the general dispute has grown in the past two weeks.

One of the two sides believes that the results of all of this are Reagan/TSRASRIS in both the United States and the global economy. The United States will appear competing on a flat stadium with a more empowering private sector and a more productive government. The other believes this would lead to the care of the United States in recession, such as Jimmy Carter, with the negative global indirect, highlighted by Chinese -American tensions.

The bottom line is clear. The fluctuations of the past two weeks have undoubtedly demonstrated that the United States has taken its economy and organizing other countries, on an uncomfortable journey to an unconfirmed destination. This will strongly test the financial system and global status of America, including its ability to face China’s efforts to photograph itself as the best and longest -term partner.