Economist warns investors to steer clear of U.S. stocks as Donald Trump’s policies put economy at risk, urges investors to look elsewhere

Economist David McWilliams has cautioned about the future of the American economy under US president Donald Trump and has called on investors to rethink their strategies and advised them to steer clear of US stocks, as per a report.

Donald Trump's Policies Eroding Long-Standing Economic Order

In McWilliams' view, Trump's unconventional policies, such as his trade wars and recent foreign policy moves, have eroded the international economic order that has existed for more than 70 years, bringing tremendous instability, reported Quartz.

Radical Changes with Little Economic Coherence

The Dublin-based economist claimed, “We have a very radical president doing very radical things very quickly, with little or no economic coherence,” quoted Quartz. He also mentioned that, “There’s no world in which a large dominant global player turns its back on its trading partners and gets rich. He’s not on a pathway to making America great,” as quoted in the report.

A Return to Competing Power Blocs?

According to him, Trump's moves may lead the world to a situation closer to the 1930s, with competing power blocks, reported Quartz. McWilliams said that America would retreat to the Western Hemisphere with Russia and China taking the rest, as per the report.

McWilliams Urges Investors to Focus on European Stocks

McWilliams warned investors to not focus on US stocks for now and suggested to consider European stocks, as per Quartz.

He highlighted that, “There’s simply too much risk in America — chaos monkeys are running the show — and that’s not good for money,” as quoted in the report. Instead, McWilliams emphasized "European stocks are set to soar on German-led fiscal expansion, with weapons-makers especially likely to benefit," quoted Quartz.

US Economy Will Face Major Challenges

The administration’s programs have already damaged the US economy, reported Quartz. According to the economist, the country will struggle to restore government capacity as Elon Musk’s Department of Government Efficiency has made several federal cuts, reported Quartz.

McWilliams said, “Trump thinks he holds all the cards, I’m not so sure. The last time someone tried to remake the world order — Germany in the 1930s — it didn’t end well,” quoted Quartz.

FAQs

What did McWilliams say about Trump’s economic approach?
He believes Trump’s policies lack economic coherence and could hurt America’s long-term economic standing.

What is McWilliams' advice to investors?
He advises investors to steer clear of US stocks and consider European markets instead, reported Quartz.