Whose problem??Trumponomics

Whose problem? Trumponomics Uncertainties abound, but the probable effect of Donald Trump’s economic policy will be damage, particularly abroad. That happened last time America abdicated its role at the heart of the global financial system, when in 1971 under Richard Nixon it ended the post-war regime of fixed exchange rates, telling European leaders “the dollar is our currency, but your problem.” Mr Trump’s economic populism has two planks: trade protectionism—ramping up tariffs—and boosting demand. Tax cuts would encourage big American companies to repatriate their offshore cash mountains. Bigger deficits would mean higher inflation and juicier bond yields, attractive to foreign investors. All that would support the dollar, hence its rapid recovery after election-night jitters. But Mr Trump will also try to keep the extra demand within America’s borders, and a stronger dollar would probably tighten global financial conditions. So would the chill on confidence caused by threats of (or actual) trade wars.