President Donald Trump has upended the global geopolitical order in place for more than 70 years with major economic consequences that have only begun to be felt, and which won’t help the U.S., according to economist David McWilliams.
The president’s “terrifying” Oval Office meeting with Ukrainian President Volodymyr Zelenskyy, on top of his trade war, have shocked European Union countries, said the Dublin-based McWilliams, an economist who used to work for the Irish central bank, UBS (UBS), and Banque Nationale de Paris (BNPQY) (BNP). He is now a podcaster and author of the forthcoming “Money: A Story of Humanity.”
“We have a very radical president doing very radical things very quickly, with little or no economic coherence,” McWilliams told Quartz in an interview. “There’s no world in which a large dominant global player turns its back on its trading partners and gets rich. He’s not on a pathway to making America great.”
Trump has undermined the twin pillars of America’s post-World War II global policy: Atlanticism and freer trade. This world may move to a situation closer to the 1930s, carved up into competing power blocks. The U.S. will retreat to the Western Hemisphere with Russia and China taking the rest, McWilliams said.
Trump has thrown in the towel on Russia, McWilliams said, isn’t really committed to competing with China in manufacturing in any proper way, and believes that tariffs are the road to economic prosperity.
For investors, that means steering clear of the U.S. for now, McWilliams said.
“There’s simply too much risk in America — chaos monkeys are running the show — and that’s not good for money,” McWilliams said. Instead, European stocks are set to soar on German-led fiscal expansion, with weapons-makers especially likely to benefit.
The hope is that the American economy will slow, imposing some discipline on this administration, McWilliams said. Even if this stalls the administration’s program, damage has been done: The U.S. will struggle to restore government capacity eroded by Elon Musk’s Department of Government Efficiency.
“Trump thinks he holds all the cards,” McWilliams said. “I’m not so sure. The last time someone tried to remake the world order — Germany in the 1930s — it didn’t end well.”