That’s the concern of The Wall Street Journal in one of its Thursday editorials.
President Trump’s biggest achievement has been the revival of faster US economic growth, but past performance is no guarantee of future results. The White House should be worried about growing economic strains in the rest of the world, and policy makers need to prepare. The US is not an island.
The WSJ went on to note that the Germany economy shrank 0.2% in the last quarter, the Japanese economy shrank by 0.3% in the same quarter, and the PRC’s economy “only” grew by 6.5% year-on-year in the same quarter. The WSJ particularly worried about the German auto industry.
It’s true enough that the US is not an economic island, but there are many, and serious, factors that are beyond our control and that the WSJ chose to be silent about.
Take Germany, for instance. Its labor laws are almost as draconian as the French and, together with German regulations, leave that economy much less nimble in changing conditions than it needs to be. And even though the German auto industry wants a zero-tariff trading regime, at least with its products, the German government has shown its disinterest with its lack of action at the EU level.
The Japanese economy also is heavily regulated and inflexible, for all that it’s not a centrally planned one. There’s no economic flexibility there.
That’s especially true with the especially heavily regulated and overtly, deliberately centrally planned economy of the PRC.
Our other trading partners? The EU as a whole has rejected any concept of a tariff-free environment with the US, it routinely attacks our companies’ competitive success across Europe, it constantly seeks to raise taxes on our companies rather than lowering their own to competitive levels, and on and on.
There’s only so much we can do with trading partners whose government denizens are more interested in their personal political and fiscal powers than they are in the welfare of their citizens.