Tariffs, technology and industrial policy – Michael Roberts
“The international agencies like the IMF and the World Trade Organisation are worried for the future of the major capitalist economies. The IMF economists reckon a “severe fragmentation of the global economy after decades of increasing economic integration could reduce global economic output by up to 7%”, or about $7.4 trillion in today’s dollars. That’s equivalent to the combined size of the French and German economies, and three times sub-Saharan Africa’s annual output. The losses could reach 8-12% in some countries, if technology is also decoupled”. Even limited fragmentation could shave 0.2% off of global GDP now.
“But America’s ruling elite see that cost as worthwhile if it brings China to its knees. The struggle between the emerging imperialist powers in the late 19th century ended in two world wars in the 20th century. The attempt of US imperialism to destroy the emerging economic and political power of China poses the same risk.”