Manufacturing output is contracting worldwide, driven by slowdowns in Europe, the United States, China and Japan. Trade activity is also falling, as Mr. Trump and China escalate their tariffs on each other. Germany’s economy shrank in the spring.
The trade war has chilled business confidence, capital investment and hiring across major economies. Morgan Stanley researchers said this week that they expected global growth to fall at the end of the year to its lowest levels since the 2008 financial crisis ended. Central banks around the world, including the Federal Reserve, are cutting interest rates or signaling plans to inject more stimulus into their economies with monetary policy.
Mr. Trump frequently revels in other countries’ economic stumbles, casting them as competitors for a limited amount of prosperity worldwide. He has criticized the Fed, including on Friday morning, for not cutting rates more aggressively to match the low rates of Europe.
But economists warn that Mr. Trump is wrong to dismiss the threat to the American economy from his trade war. Trade plays a smaller role in American growth than in many other rich countries, but several indicators administration officials cited last year to show a “booming” American economy have all worsened, including plunging business investment and slowing factory output.
“I don’t think the U.S. can be an island of strong growth while the rest of the world is tanking,” Mr. Rajan said.
Mr. Macron, as this year’s host of the G7 gathering, is not counting on the United States to be a constructive part of other discussions. He has invited several leaders from African nations to be part of sessions on the challenges facing that continent. And the leaders of India, Australia, Chile and Spain will participate in conversations about the environment, terrorism, nuclear weapons and other issues.
French officials conceded that there is no hope that Mr. Trump joins the group in expressing its concern about the climate change despite news that fires in the Amazon rain forests could accelerate the planet’s environmental crisis. A few seemingly anodyne statements that diplomats from the seven countries prepared in advance will be released at the end of the summit, a European Union official said, among them a document on the partnership between African nations and the G7 countries and one on biodiversity.
Get more stuff like this
Subscribe to our mailing list and get interesting stuff and updates to your email inbox.