Commentary: The global economy without America

GLOBAL TRADE THAT EXCLUDES THE US?

Could this happen? Although the US accounts for 15 per cent to 26 per cent of global GDP, the rest of the world economy is still three to five-and-a-half times larger.

So, it is easy to imagine a scenario in which other countries decide that they no longer want to rely so much on the US consumer. Why not diversify?

Consider the BRICS, which has been expanding its original composition (Brazil, Russia, India, China, and South Africa) to incorporate new members and “partner countries”. What if these countries suddenly decided to do more than hold symbolic annual summits?

Instead of dictating the terms for projects in countries participating in its Belt and Road Initiative, China could start offering them low- or zero-tariff trade and investment. Together with India – whose population is four times larger than America’s – it could create the conditions for an explosion in global trade that excludes the US.

Similarly, one can imagine a new, more outward-looking German government finally realising that its self-imposed “debt brake” has been holding it back. Like the relatively new Labour government in the United Kingdom, it could adopt a policy of not only permitting but encouraging more borrowing for domestic infrastructure and defence spending.

And why not revisit those perennial French proposals to develop a European bond market, or finally get serious about extending the European single market to all goods and services?

If MAGA ultimately helps everyone break their dependency on the US consumer, the rest of the world will have much to thank Trump for. The only losers will be ordinary Americans.

Jim O’Neill is a former chairman of Goldman Sachs Asset Management and a former UK Treasury minister. This commentary first appeared on Project Syndicate.