[International Sharp Review] Beware of the ＂American Black Hole＂ eating global economic growth.

　　International sharp critic

　　On May 8 this year, Washington announced in a high-profile manner that it would withdraw from the comprehensive agreement on the Iranian nuclear issue reached in 2015. This "retreat from the group" action began to produce the first wave of impact at 0:01 EDT on August 7: the United States partially resumed comprehensive economic sanctions against Iran, involving automobile industry, aviation industry, gold and other major metal transactions. The U.S. government threatened that whoever keeps business with Iran will have no business with the United States. According to reports, Peugeot Citroen and Renault, two major French automobile groups, have been affected: Peugeot Citroen sold 445,000 cars in Iran last year and now has to suspend its business in Iran; Renault laid out ahead of schedule and reduced its business volume, which also caused its sales in Iran to drop by more than 10% in the first half of the year.

　　Some policies promoted by the current American government since it took office are just like the "black hole" celestial bodies in the universe, which use gravity to devour the luminous points of global economic growth in the dark horizon that people can’t see or touch. Withdrawing from the Iranian nuclear deal and resuming comprehensive economic sanctions against Iran is one of them.

　　This "black hole" policy’s "anti-bite" effect on global economic growth may be more obvious after November 5, when the second phase of US sanctions against Iran will affect Iran’s energy industry, oil trading and finance. Washington has threatened to reduce Iran’s oil exports to zero by then. As a pillar industry in Iran, oil not only brings 70% to 80% of Iran’s export revenue every year, but also plays a great role in driving related industries. The negative impact of US sanctions on Iran is obvious. Moreover, Iran is the third largest oil producer in the Organization of Petroleum Exporting Countries (OPEC) and the fourth largest in the world, with a daily output of 2.5 million barrels, meeting about 3% of the global demand. The United States’ ban on Iran’s oil exports will inevitably lead to an increase in global oil prices.

　　In July this year, Bank of America Merrill Lynch Group predicted in its report that if the United States adopted a "zero-tolerance" policy for Iranian oil exports, global oil prices would soar to $120 per barrel. Since the current US government won the election in November 2016, global oil prices have risen by 50% in less than two years. The chain reaction caused by the rise in oil prices, including the increase in gasoline and gas prices, is leading to an increase in inflation rate, an impact on transportation and manufacturing, a decrease in economic activities, a decrease in disposable income of residents, and a reduction in corporate profits and public consumption. AJ Bell, a British financial services company, said in an advisory opinion that history has repeatedly proved that when the annual oil price doubles, global economic growth will feel pressure. "The soaring oil prices in 1974, 1979, 1990 and 1999 all triggered economic recession. The almost doubling of crude oil price in 2008 may have contributed to the outbreak of the financial crisis at that time. Even the rapid rise in oil prices in the summer of 1987 will trigger people’s memories of the chaos in the stock market at that time. "

　　The trade war launched by Washington is undoubtedly another "American black hole" that may bite the global economic growth. Although the billionaire tweeted frequently recently that he was "winning the trade war", analysts said that global economic growth is closely related to trade, especially the imposition of tariffs will eventually affect the global trade volume and business confidence, which may lead to stagflation, that is, economic stagnation and inflation coexist, dragging the global economy to the brink of recession.

　　The International Monetary Fund (IMF) has warned that the "good times" of the global economy will not last. It predicts that global economic growth will be 0.5% lower than expected in 2020, that is, the output will be reduced by 430 billion US dollars. In a report in early June, the World Bank asserted that the escalation of trade disputes has no less impact on global trade than the financial crisis in 2008, and developing countries suffer the most because they are more dependent on the development of major economies. Franziska Ohnsorge, the chief author of the report and an economist, pointed out that trade protectionism is a real danger, and "any behavior that hinders the development of global trade will endanger global growth".

　　Mark carney, governor of the Bank of England, pointed out in his public speech in early July that trade protectionism directly affects the real economy in three aspects: the reduction of trade volume, the interruption of supply chain and the increase of import cost. According to the forecast of the Bank of England in July, if the tariff increase between the United States and all its trading partners reaches 10 percentage points, this alone may reduce the economic output of the United States by 2.5% and the global output by 1%. JPMorgan Chase pointed out that the intensified trade war will cause the global economy to drop by 1.4% at most in the next two years.

　　Under normal circumstances, the economic trend is strong and the inflation rate will rise. However, the trade war will bring about a downturn in economic development, but it will also increase the inflation rate. Richard Richard Bernstein, former chief investment strategist of Merrill Lynch, pointed out that people often ignore the impact of trade wars on inflation, but there has never been a case in history when goods and services were restricted without inflation. Luca Paolini, chief strategist of Pictet Asset Management, a large investment institution, pointed out that according to the company’s model, if the United States imposes a 10% tariff on foreign trade, it will lead to a 0.7% increase in global inflation, a decrease in corporate profits, and possibly a 15% decrease in the P/E ratio of global stocks. The model also shows that in addition to China and the United States, Luxembourg, Slovakia, Hungary, Czech Republic and South Korea will be the countries most affected by export risks.

　　The global economic growth is declining and the inflation rate is heating up. "Welcome to economists’ worst nightmare: stagflation," Japan Times said in a commentary criticizing how the US trade war triggered the global downturn. The commentary also pointed out that there is only one solution to stagflation, that is, cutting off the source, that is, the US government gives up increasing tariffs.

　　Whether it’s withdrawing from the Iranian nuclear deal, launching a trade war, withdrawing from the Paris Agreement, withdrawing from UNESCO, etc., the policies pursued by Washington confirm the biggest feature of the foreign policy of the current US government, which is "uncertainty". However, as the world’s largest economy and the most influential superpower, the US government owes the world a great "Predictability". The world doesn’t need an "American black hole" because it will devour all the beauty and prosperity with light in an instant. (International Critical Commentator)