The US has been plunged into a state of deep political and economic uncertainty following the sudden resignation of the Defense Secretary Jim Mattis over his growing policy differences with the President Donald Trump. Trump has also enforced the government shutdown over the delay by Democrats controlled House to finance Mexican border wall. What is more, Trump is mulling firing the Federal Reserve chairman Jerome Powell for raising interest rate against his wishes. Trump sees it as the reason for the stock market sell-off which in turn has roiled the markets around the world. But even the idea of dismissing Fed chairman has sent the stocks further downhill, not to mention what would happen were Trump to actually carry out the threat. And hilariously enough, while the Treasury Secretary Steven Mnuchin was trying to reassure the markets by denying any plan to throw out Powell, Trump sent out a tweet re-affirming his intentions to do so.
He also blamed the stock market rout for singularly on Fed’s actions. But that is hardly true. The popular opinion in the US itself seems to blame Trump for the current unsettled state of affairs. There is now a growing realization that the president’s erratic and irrational behaviour is not only creating difficulties for America at home but also making the world a fraught place. The ongoing trade war with the China, sudden decisions to pull out troops from Afghanistan and Syria, support to Saudi government despite its alleged hand in the murder of the journalist Jamal Khashoggi, all have combined to create a very dangerous state of affairs. Also, Trump’s antipathy towards multilateral institutions which have anchored the global stability after the second world war, his protectionist approach towards the economy and pursuit of an isolationist policy for America have threatened to unhinge the world.
Will this situation change anytime soon. Unlikely. The US under Trump looks unlikely to change its course. Its approach to China has threatened to start a new cold war. On the other hand, new geo-political alignments are taking place. China and Russia are moving ever more closer and challenging US hegemony. The Trump’s combative approach is alienating a lot many countries and allies. This is not a happy state of affairs for the world to be in. Here’s hoping that the things change soon. But for this to happen, the US will have to reassume its global leadership role. More than anything, the current dire state of global economy needs the major powers to unite rather than drift apart.
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