Jim Rogers Warns of Recession from 'America First' Policy

Chennai: US President Donald Trump’s ‘America First’ policy is not good for the world, not even for his own country. Trade wars will exacerbate global inflation and push the world into another recession, warns investor guru Jim Rogers.

Donald Trump’s avowed stance of putting ‘America First’ and promoting local manufacturing by imposing high import duties on products entering the country will push the world into a trade war of tariffs and counter tariffs. The increased tariffs on commodities and products will lead to a surge in global inflation.

“Mr Trump’s ‘America First’ policy will hurt not just China, but the whole world. Trade regulations are not good for anybody. It is not good for the world and for his own country,” Rogers told Financial Chronicle.

“The US already has an economic problem, which includes inflation. Though central banks are cutting rates, the issue of inflation has not been resolved yet. It will come back with the trade war more aggressively,” he said.

“The US has a huge debt. When Mr Trump will try to solve economic problems, he will make mistakes and that is bad for the world. It will affect the entire world and we will see the biggest recession ever,” he warned.

“America should work on cutting its spending and debt. It should not restrict trade with China, India or any other country. Restrictions on trade will make the situation worse,” he added.

Trump also has declared that his government will implement corporate tax cuts to boost domestic manufacturing. However, this could worsen the fiscal deficit and this is not good for the economy and the US dollar, which gained some strength against a basket of currencies after the US election results were announced.

“When turmoil comes, usually investors look for safe haven and that is why I own the currency. But the dollar is not a sound currency. In periods of recession, commodities like gold do well. People invest in commodities like gold to protect themselves,” he added.

Rogers is also optimistic about India and said that he would invest in the country again. “After so many years India has realized that prosperity is not bad, success is not bad. There is a positive change in New Delhi. I sold my investments in India too soon. I will invest more in India as the country has a brighter future,” he said.