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Nobel Prize economist Joseph Stiglitz: Trump throwing hand grenades into global economy

Lianna Brinded
·Head of Yahoo Finance UK
President Donald Trump. Photo: Drew Angerer/Getty Images
President Donald Trump. Photo: Drew Angerer/Getty Images

One of the world’s most famous economists, Joseph Stiglitz, said US president Donald Trump is "throwing hand grenades into the global economy" and that "almost surely" that there will be a global economic slowdown.

The Nobel Prize-winning economist said on BBC Radio 4’s Today programme that there are already “inklings” of that slowdown happening and while "it's nothing like the 2008 crisis... it's certainly going to be felt." He predicts that the economy will be weaker for the next two years.

"We have the knowledge with which we could stimulate the economy but we have leaders that have, I think, misguided views of the economy,” he said, later adding leaders “like Trump.”

"One of the reasons that Trump has been so bad for the global economy is he's introduced a high level of uncertainty," he said.

Currently the US is engaged in an all-out trade war with China. Over the last week, Trump said he would impose tariffs on $300bn (£246bn) worth of Chinese products. China later responded allowing the yuan to breach the key seven-per-dollar level against the US dollar (CNY=X) for the first time since 2008.

READ MORE: What now since US classed China as a 'currency manipulator'?

The US government classed China as a “currency manipulator” and the move roiled global stock markets, with the US recording its worst trading day for 2019 and Asian and European bourses trailing lower over the last five days.

J. Kyle Bass, the CIO of Hayman Capital Management, told Yahoo Finance the trade war between the US and China is "bigger than economics" while strategists like John Higgins, Capital Economics’ chief markets economist warned that the S&P 500 will plunge another 15% by the end of this year.

Trade negotiations between the two nations are set to continue in September.