UnHerd with Freddie Sayers Stock market meltdown: What happens next?
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Apr 7, 2025 Wolfgang Munchau, an economic commentator and director of Eurointelligence, joins Anatole Kaletsky, chief economist at Gavekal, for a deep dive into the tumultuous state of global markets. They discuss how Trump's tariff policies are shaking up globalization and could lead to a recession reminiscent of 2008. The duo examines the potential shift away from American economic dominance and the challenges Europe faces in its relationship with China, along with the urgent need for new international trade alliances.
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A Tectonic Shift
- Investors now realize Trump's trade policies are real.
- This marks the end of the hyper-globalization period and the upending of the global monetary system.
Tariffs as Tax Hikes
- Trump's tariffs amount to the largest U.S. tax increase since WWII, impacting consumers and businesses.
- This tax increase will likely cause a U.S. recession and potentially a global depression.
Avoiding a Trade War
- Don't impose retaliatory tariffs, as this is futile.
- Instead, announce a multilateral free trade agreement and increase fiscal spending.