CEO: This is the biggest Achilles heel for the global economy

The U.S. economy grew at a slightly stronger pace in the third quarter than previous estimates showed, up 2.1% versus the initial estimate of 1.5%, according to the latest estimates from the Commerce Department. The report also showed that corporate profits slowed in the third quarter.

Despite an unemployment rate at its lowest level since 2008, the U.S. economy still faces “major headwinds,” according to EY Chairman and CEO Mark Weinberger, who says there’s an “uncertainty tax” slowing down business investment and hiring.

The causes of that uncertainty are far-reaching, from geopolitical concerns like the current power struggle between Russia and the United States over Syria to the uncertainty surrounding U.S. monetary policy and the Federal Reserve’s long-awaited decision whether and when to raise interest rates.

“All these issues really do affect [capital expenditures],” says Weinberg, who served in both the Clinton and George W. Bush administrations. “We’ve seen that go down quarter after quarter after quarter. And while the unemployment rate’s come down, the overall employment rate is still near a 30-year low, and so we still have major headwinds.”

The strongest headwind Weinberger sees is the rise of nationalism. “This is [the] biggest Achilles heel to the global economy,” he says. “After eight years of really slow growth around the world, there’s frustration. The people in different countries are looking at their elected leaders and saying, ‘We’re not getting it done.’”

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Those feelings are leading to the rise of the anti-establishment. Weinberger points to what he calls the Trump and Carson phenomena in the United States but is clear to point out that this is not a uniquely American trend. Weinberger says the same thing is happening all across Europe. “You’re seeing either very conservative or very liberal parties come out and look for really protectionist policies to try and protect the companies and grow the local economies—and that is to the detriment of global free trade, which is really important to business growth and then overall growth in the global economy.”

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