Nouriel Roubini, the Iranian-American economist known as “Dr. Doom” for predicting the 2008 financial crisis, said that President Donald Trump “blinked and chickened out” in his trade confrontation with Chinese President Xi Jinping.
What Happened: In his recent X post, Roubini asserted that Trump received “almost no concessions from the Chinese side” in what he characterized as a decisive victory for Xi. The economist warned that continued escalation would have triggered severe economic consequences.
“The tit for tat trade war escalation started by the U.S. would have spiked U.S. inflation, led to massive supply chain disruptions and would have triggered a serious U.S. and global recession,” Roubini wrote, adding this outcome “would have doomed the GOP and the MAGA grand goals by the 2026 mid term elections.”
Roubini indicated modest Chinese concessions might emerge during the announced 90-day negotiation period to “reset” trade relations, but maintained that “so far Xi is the clear winner.”
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Why It Matters: On Monday, the U.S. and China agreed to drastically roll back tariffs for an initial 90-day period. U.S. tariffs on Chinese goods dropped from 145% to 30%, while China cut its tariffs on American goods from 125% to 10%.
The economist’s assessment comes amid his shifting economic outlook. Despite his traditional pessimism, Roubini recently expressed optimism about U.S. economic prospects, citing AI advancements potentially driving growth to “4% by decade’s end” and “6% by the end of next decade.”
This analysis follows earlier warnings from Roubini that markets were “delusional” about Federal Reserve intervention amid trade tensions. He previously described the situation as a “three-way game of chicken” between Trump, Fed Chair Jerome Powell, and Jinping, predicting Trump would likely concede first.
While critical of Trump’s trade policies as “crazy and unfair,” Roubini acknowledged that China “needs to reform its economic model,” noting global consensus on this point beyond just U.S. demands.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
