Illustration: Chen Xia/Global Times
U.S. President Joe Biden said Thursday morning that a tentative agreement was reached to avoid a nationwide rail strike that could wreak havoc on the country’s supply chains amid already high inflation. announced that they were married.
But rising social and economic unrest can be seen as another sign that the US economy is headed for recession.
The reason the Biden administration pushed so hard for the interim deal was because the consequences of the strike were unbearable for the economy.
About 125,000 rail workers will go on strike starting Friday if no deal is reached by the deadline. It was his biggest strike of its kind since 1992. It accounts for his third of the country’s freight traffic, and worsening supply shortages of raw materials and products have led to widespread shutdowns in the manufacturing sector. And this would be another devastating blow to his chain of US supply, which has already faced various difficulties in recent years.
The risks that remain in US supply chains also make the Biden administration’s supply chain strategy ridiculous. Over the past two years, the Biden administration has actively engaged allies and built his global supply chain under the pretext of building a so-called resilient, diverse, and secure supply chain. This supply chain has tried hard to keep China out. common values. ”
In May, Biden announced the launch of the Indo-Pacific Economic Framework (IPEF). This is “one of the most quintessential signs of Washington’s attempt to create smaller hoops in the fragmented Asia-Pacific supply and industrial chains” from China.
But the fragility of the U.S. supply chain has been exposed time and time again by incidents like infant formula shortages and a narrowly avoided railroad strike, making Washington’s geopolitical game look increasingly farcical.
In fact, the U.S. economy is already in tatters, with all the problems intertwined like a ball of thread. Inflation, which reached his highest level in 40 years in June, rose unexpectedly in his August, part of the frustration of railroad workers.
Although the railroad strike appears to have been averted this time around, the US economy will continue to suffer from inflation. Who knows what the next inflation-induced problem will be. The Biden administration’s economic inability to curb inflation could be enough to ruin the Democratic Party in the upcoming midterm elections.
Fundamentally, this is not the first time US supply chains have been exposed to particular hazards, and indeed reflects the problems of the US economy. Political economic policies are far from addressing domestic economic problems. With increasing signs that the U.S. economy is headed for recession, strikes and other social unrest are bound to intensify, and to some extent, could ignite a vicious economic cycle.
Unilateralism no longer works because the US economy is declining. Systems dominated by the United States, such as the financial system and the trading system, are now facing serious challenges of fragmentation. For example, the US Federal Reserve’s aggressive rate hike policy amidst high inflation seems to have made the dollar the strongest currency against other currencies at the moment. But there is an undeniable fact that never before in the past decades have so many countries tried to replace the dollar with another currency in the settlement of energy trade. And the underlying reason lies in the continued decline of the United States’ own economic power and its erroneous approach to economic ‘decoupling’ in global supply chains.
There is historical precedent for the collapse of the global financial system as a result of the collapse of a dominant power, and this may be the greatest danger the world currently needs to remain vigilant about.