Macroscope | As liberal international order crumbles, war could be on the cards

US president-elect Donald Trump’s tariff threats are making headlines, but they are among the least of the problems facing the global economy and could end up having the opposite effect to that which they are intended. The international trade and economic systems are in danger of degenerating into chaos.

Meanwhile, Trump’s threat of sanctions against the Brics bloc of nations if they attempt to reduce their reliance on the US dollar seems more likely to provoke greater diversification from the world’s leading currency.

As for his suggestion that the United States could use bitcoin to repay its government debt, that could create panic in financial markets when the US bond market is currently the biggest and most liquid in the world.

Relatively cheap Chinese-manufactured goods in particular have helped to keep inflation down in Western countries. However, that advantage is now about to be squandered.