U.S. President Donald Trump’s hostility to globalization is ruining the United States’ attractiveness as a place to do business. Sometimes, after all, it takes just one bad landlord to destroy a whole neighborhood’s desirability. This year, net inward investment into the United States by multinational corporations—both foreign and American—has fallen almost to zero, an early indicator of the damage being done by the Trump administration’s trade conflicts and its arbitrary bullying of companies and governments. This shift of corporate investment away from the United States will decrease long-term U.S. income growth, reduce the number of well-paid jobs available, and reinforce the ongoing shift of global commerce away from United States. That shift will subject the entire world economy to greater instability.
A few months ago, I wrote in Foreign Affairs that the Trump administration’s policies could lead to the emergence of a post-American world economy. Today, events are moving in that direction. Most obvious, Trump’s trade war is escalating. It is displacing Americans from jobs in export industries and reducing U.S. purchasing power. But these direct harms are limited; the global economy can adapt to Trump’s tariffs. As I wrote, “The United States is more dispensable to the rules-based trading regime than it is in other economic spheres. . . .Trade can be limited, but never completely squelched.” What’s more, congressional Republicans’ spending binge and their deep tax cuts will offset most of the damage to aggregate U.S. growth and employment, at least for this year and next (although those actions will bring bills to pay later). As a result, standard economic indicators, such as the value of the dollar, the U.S. stock market, and interest rates on U.S. government debt, which are all currently fairly stable, do not reveal much about whether the world economy is moving into a post-American era. Major powers have accelerated trade deals among one another without the United States, including the Comprehensive
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