This is no repeat of 2008 or 2020. In those moments, the world acted as one. Today, it fragments. In those crises, the U.S. extended its hand. Now, it points fingers.
The global economy is heading towards a dangerous direction, and this time, it’s entering alone. In past moments of crisis, the world has leaned on two pillars of stability: international cooperation and decisive action from the U.S. Federal Reserve.
But today, both are absent; because the crisis brewing now isn’t a surprise or a shared emergency. It’s the direct result of policy choices made in Washington.
President Donald Trump’s escalating tariff war has set the stage for what could become the most severe self-inflicted economic wound in a generation. What separates this moment from 2008 or 2020 is not the scale of the potential damage, but the lack of a global mechanism to contain it.
The U.S., which once led coordinated responses to economic catastrophe, has become the source of instability. No country is rushing in to stop the bleeding, not because they can’t, but because the damage is deliberate.
Historically, when financial tremors shook the world, leaders turned to the G20, a forum designed to bring the largest economies together in times of stress. In the wake of the 2008 financial collapse, the G20 injected confidence and capital into the global system with a $5 trillion pledge.
During the COVID-19 pandemic, the same group organized efforts for debt relief and vaccine access. These moments proved that when countries act together, they can soften even the harshest blows.
That kind of solidarity is missing now. A trade war launched by the United States can’t be met with a unified international rescue, because the very premise of unity has been rejected. Washington’s message to the world is clear: America first, alliances last.
Countries like China and those in the EU have little incentive to offer support; some may even view market turmoil as useful leverage. What would once have sparked emergency coordination is now met with strategic silence.
Even the Federal Reserve, often the last line of defense in times of financial turmoil, is holding back. Chair Jerome Powell has indicated the Fed won’t rush to cut rates or flood markets with liquidity. He understands what’s at stake: if the central bank cushions the blow of tariffs, it sends the signal that political decisions carry no economic consequences. That would risk transforming the Fed from a guardian of stability into a safety net for bad policy.
This leaves the U.S. in a precarious position: facing the global impact of rising tariffs with no diplomatic allies and a restrained central bank. Trump may grow frustrated as other countries lower interest rates to cushion their own economies, while the Fed resists calls to do the same.
But the Fed’s caution is not obstinance, it’s principle. Economic tools designed for crises caused by unforeseen shocks aren’t meant to fix self-engineered standoffs.
The temptation is to compare today’s situation to past collapses. But this is no repeat of 2008 or 2020. In those moments, the world acted as one. Today, it fragments. In those crises, the U.S. extended its hand. Now, it points fingers. We are no longer watching an economy battered by circumstance; we are witnessing one strained by design, and the usual rescue squads are sitting this one out.
If there is an economic reckoning on the horizon, it will not be for lack of expertise or capacity. It will be because the old habits of cooperation, the habits that once stabilized the world, have been cast aside in favor of confrontation. That choice may come at a price no tariff can ever recoup.
OpEd Column Syndication 