Something dangerous is happening to the U.S. economy, and it’s not inflation or trade wars. Chaotic deregulation and the selective enforcement of laws have upended markets and investor confidence. At one point, the threat of tariffs and resulting chaos evaporated US$4 trillion in value in the U.S. stock market. This approach isn’t helping the economy, and there are troubling signs it will hurt both the U.S. and the global economy in the short and long term.

The rule of law – the idea that legal rules apply to everyone equally, regardless of wealth or political connections − is essential for a thriving economy. Yet globally the respect for the rule of law is slipping, and the U.S. is slipping with it. According to annual rankings from the World Justice Project, the rule of law has declined in more than half of all countries for seven years in a row. The rule of law in the U.S., the most economically powerful nation in the world, is now weaker than the rule of law in Uruguay, Singapore, Latvia and over 20 other countries.

When regulation is unnecessarily burdensome for business, government should lighten the load. However, arbitrary and frenzied deregulation does not free corporations to earn higher profits. As a business school professor with an MBA who has taught business law for over 25 years, and the author of a recently published book about the importance of legal knowledge to business, I can affirm that the opposite is true. Chaotic deregulation doesn’t drive growth. It only fuels risk.

Legal uncertainty has become a serious drag on American competitiveness.

A study by the U.S. Chamber of Commerce found that public policy risks — such as unexpected changes in taxes,........

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