On May 12, the United States and China announced that they are putting reciprocal tariffs on pause for 90 days. Some tariffs will be retained while trade negotiations continue, a joint statement said.

This is yet another reversal of the sweeping tariffs US President Donald Trump imposed in early April that destabilised the global economy and sent stock markets into freefall.

Although he claimed that his measures would make the US economy “boom”, it was clear from the start that they would not work. A trade war cannot improve the lot of American workers, nor bring back manufacturing into the country.

Now spooked by corporations slashing profit targets and reports of the US gross domestic product (GDP) shrinking, the Trump administration appears to be walking back on its strategy. But going back to economic liberalism under the guise of “stability” is not the right course of action.

The current global economic system, distorted by policies favouring the rich sustained over decades, has proven itself to be unsustainable. That is why we need a new world economic order that promotes inclusive and sustainable development across both the Global North and South and addresses global socioeconomic challenges.

The troubles that economies around the world currently face are the result of policies the elites of the Global North imposed over the past 80 years.

In its original Keynesian vision, the economic order put forward by the Allied Powers after World War II aimed to combine trade, labour, and development best practices to foster inclusive growth. However, over the following few decades, corporate opposition in the US and Britain derailed this order, replacing it with a skewed system centred around the Global North’s chief economic instruments, the World Bank and the International Monetary Fund, both created in 1944.

In the 1970s, economic elites blamed rising inflation and stagnation not on temporary shocks like the oil crisis but on what they saw as excessive concessions to organised labour: government overspending, strong unions, and heavy regulation. Subsequently, they launched an institutional counter-revolution against the Keynesian model of power sharing and social compromise.

This counter-revolution........

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