‘Dr. Doom’ economist warns Trump reelection is ‘greatest threat’ to face global markets right now

Donald Trump prides himself on his economic record in office, yet Nouriel Roubini warns his reelection would deal a blow to global growth, stoke inflation, and fuel fiscal deficits.

In an opinion column, the professor emeritus at NYU’s Stern School of Business argued the America First protectionist agenda would spark new trade wars—both with rivals and allies—while more tax breaks would undermine investor credibility in the dollar.

“Trump’s proposed economic-policy agenda is now the greatest threat to economies and markets around the world,” he wrote in a comment published by Dow Jones’ MarketWatch on Saturday.

Known by his nickname “Dr. Doom,” Roubini rose to fame as one of the very few to warn of the 2008 subprime meltdown. The trauma helped discredit mainstream policy experts tasked with shielding everyday Americans from harm, and gave rise to an antiestablishment movement that eventually put Trump in the White House.

Once there, the real estate tycoon broke with orthodox economic doctrine by using the guise of national security to slap tariffs on foreign steel and renegotiating NAFTA.

More important, however, he was the first to campaign eight years ago in favor of an adversarial trade stance with Beijing, at the time still America’s largest creditor. By the end of his term, he imposed punitive duties on $250 billion worth of goods coming from China.

“There is no doubt that U.S. protectionist policies would become more severe,” Roubini wrote, citing threats to raise tariffs on all imported goods to 10%, up from around 2% currently, which could anger allies in Europe, Japan, and South Korea.

Roubini sees the ‘specter of a financial crisis’

In February, Trump already pledged to hike duties on imported Chinese goods to a 60% minimum amid recent fears in Washington of a flood of cheap EVs from the likes of Tesla-killer BYD.

Roubini said hiking tariffs on both rivals and allies would lead to the “balkanization of global supply chains.” The resulting inefficiencies would drive costs higher for U.S. consumers already exhausted by three years of high inflation.

Roubini further worried Trump would drive Uncle Sam’s borrowing costs higher if he succeeded in making permanent his 2017 tax legislation, which is otherwise due to sunset at the end of next year.

“Tax cuts that are poised to expire would be extended, as would higher spending on defense and entitlements,” Roubini wrote, warning investors would demand even higher yields in exchange for the greater risk they shoulder. Uncertainty over U.S. fiscal probity would only worsen were Trump to replace Fed Chair Jay Powell with someone perceived as beholden to the administration.

Currently, the U.S. Treasury already needs to offer debt holders 4% to borrow money over 10 years, roughly twice the rate it needed to during Trump’s term prior to the outbreak of the pandemic.

“With private and public debts high and rising, that would introduce the specter of a financial crisis,” Roubini wrote.

This story was originally featured on Fortune.com