Friday 7 June 2019 9:00 am

An all-out trade war with Trump is more likely by the day

Donald Trump jets back home today after a predictably tumultuous week during which the US President betrayed his ignorance of the NHS, the Irish border and, more amusingly, the existence of Michael Gove.

Thankfully the circus witnessed earlier in the week subsided in time for D-Day commemorations, allowing people on both sides of the Channel to pay their respects to the many men and women, including those from the US, who helped defeat Nazism 75 years ago. 

Read more: Trump doesn’t deserve the respect we owe a President

As Trump departs, British officials may wonder whether they will be put through another such visit again should the property magnate win next year’s presidential election.

Meanwhile economists are also left pondering Trump’s political future as they attempt to map the likely level of global growth in years ahead.

The International Monetary Fund caught headlines this week by warning that nearly half-a-trillion dollars will be lost from world output in 2020 thanks to protectionism triggered by Trump’s trade wars.

“Larger than the size of South Africa’s economy,” IMF boss Christine Lagarde explained, emphasising the size of the hit.

Beneath the headlines exists a plethora of similar warnings and downbeat forecasts.

Also this week, analysts at ING said that world trade is heading for its worst year since the aftermath of the financial crisis in 2009, predicting a measly 0.3 per cent growth.

While the level of trade would normally bounce back in 2020, “that improvement could vanish if the trade war drags on”.

And it is likely to drag on. Societe Generale now believes there is a mere 45 per cent chance of a benign solution to the US-China standoff. Even more worryingly, the French bank says there is a one in four chance of a devastating all-out trade war between the world’s two biggest economies.

As Trump nears election mode his (albeit limited) focus will fall increasingly on pledges made in 2016 to restrict immigration and extract supposedly better deals from foreign countries through belligerent negotiating tactics.

Read more: Trump: UK and US will reach agreement on Huawei

An impulsive escalation of tariffs is the President’s go-to tactic, as recently demonstrated by rates imposed on Mexican goods just six months after the two countries agreed a trade pact alongside Canada. 

The 2020 election is a chance to remove Trump from office – but it is also Trump’s chance to double-down on what has rapidly become his most notorious policy.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.