Seattle and the Northwest face new uncertainty as world leaders gather

An important meeting this week in the other Washington will have consequences that affect Seattle and the Northwest, as well as the nation and world.

After World War II, the United States established two institutions to help prevent the type of trade conflicts that in the 1920s and 1930s contributed to the rise of Hitler and the military control of imperial Japan.

One was the International Monetary Fund, founded at the Bretton Woods, N.H., conference in 1944 along the lines of advice from economist John Maynard Keynes.

The IMF, part of the United Nations and headquartered in Washington, D.C., was intended to be a global lender of last resort, providing technical support, as well as monitoring and assisting the economies of its 191 member nations facing challenges.

According to its mission statement it is “working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.”

The second was the World Bank, also created in 1944 and headquartered in the nation’s capital. Its mission statement includes, “to end extreme poverty and boost shared prosperity on a livable planet. This is threatened by multiple, intertwined crises.”

Both are meeting this week in the District of Columbia under the presidency of Donald Trump.

The economy is facing extreme uncertainty. In February, the Trump administration ordered a review of the two institutions. Although both were founded by America, a withdrawal of the U.S. is possible. Both are attempting to win over Trump and his administration.

Among the World Bank’s many efforts is working on sustainable aviation fuels, especially in developing nations, that would help Boeing.

As regular readers know, Washington is among the nation’s most trade-dependent and trade-vulnerable states. Our leading merchandise and services trading partner is the chief target of Trump’s wrath, China. He’s vastly expanded tariffs beyond those of the Biden administration; they are the highest in more than a century and put supply chains, recovering from the pandemic, at new risk.

The other top state destinations are Canada, Mexico and Japan.

Naturally, China and other nations retaliated against Trump’s levies.

According to the U.S. International Trade Administration, “transportation equipment” — aerospace products and airliners — makes up Washington state’s largest merchandise export. In 2024, it accounted for more than $18.5 billion in trade, out of the state’s $57.7 billion total.

Washington agricultural exports are also in danger from a trade war.

Trump’s tariffs have spurred China to suspend airliner deliveries. This hurts Boeing because China is the company’s most important overseas customer.

Boeing, formerly headquartered in Seattle, employs 67,567 Washingtonians as of December.

Also because of Trump’s extreme levies, about 100,000 Chinese sellers on Amazon are preparing to increase prices or quit the U.S., increasing prices on American customers — both individuals and businesses.

Additionally, Starbucks operates more than 6,500 stores in China and Chinese customers are considering boycotting American chains. And customers at Costco can expect to pay more here.

Meanwhile, the Northwest Seaport Alliance, the collaboration of the natural deep seaport of Seattle and the Port of Tacoma, stands to lose from the trade conflict. As my colleague Paul Roberts reported in February, thousands of Washington businesses are likely to be hurt.

So, these meetings, like the tariff shock — with the potential to bring a depression as happened with the foolish Smoot-Hawley levies of 1930, which helped turn a severe contraction into the Great Depression — are important to us.

The Trump disruption comes atop the Great Recession of 2007-09, slow growth for most of the world in the early 2010s, the shambolic first Trump presidency and the pandemic. I compare this with the long period of relatively mild recessions and low inflation from the late 1980s until the Great Recession, imploding Washington Mutual.

Tariffs are taxes levied on imports from other countries and — most economists agree — are mostly paid by customers: people in the U.S., who will pay more on imports from China and other major trading partners. They are also considered inflationary.

As a result, you could see prices rise significantly on most imported products, although Trump has excluded electronics such as smartphones for now. Still, tariffs on foreign-made semiconductor chips will increase some electronics prices anyway.

According to Reuters, a primary focus of the meeting will be minimizing the consequences of Trump’s tariffs.

“Trade wars will dominate the week, as will the bilateral negotiations that nearly every country is trying to pursue in some way, shape or form,” said Josh Lipsky, senior director of the Atlantic Council’s GeoEconomics Center. “So, this becomes a Spring Meetings unlike any others, dominated by one single issue.”

Remember, Trump has already withdrawn the U.S. from the Paris Agreement, the World Health Organization and U.N. Human Rights Council, while essentially closing the U.S. Agency for International Development.

Anything is possible. Trump doesn’t operate within the guardrails of our constitutional democracy.

The movements of the stock market aren’t usually to be trusted as a barometer of economic health. The Dow Jones Industrial Average and wider-reaching S&P 500 fell when Trump first rolled out his tariffs, then rebounded primarily because Jerome Powell seems likely to remain as chair of the Federal Reserve.

Trump said he was considering reducing his extreme tariffs on China, but believing this requires one to accept the feral intelligence of the worst kinds of real estate developers. Trump’s survival instinct may have kicked in for now, but he remains, as he’s repeatedly styled himself, “tariff man.”

Indeed, the IMF this week intensely lowered its projection of world economic growth during the next two years because of the consequences of Trump’s trade policies. Several big Wall Street outfits such as Goldman Sachs and JPMorgan Chase are warning of increased recession danger for the same reason.

The Financial Times reported that while Brookings Institution senior fellow Eswar Prasad said it would be “premature” to forecast a worldwide recession, he said the trade battle would significantly lower growth.

“We have seen this huge shock,” said Prasad. “Every open economy that relies on trade is going to get squeezed, and on top of that you will have (negative) confidence effects.”

Both the IMF and World Bank have been criticized for years. For example, the IMF faced charges of favoring developed nations and forcing deflationary policies on countries needing bailouts.

The World Bank’s critics range from the conservative Austrian economist Ludwig von Mises to its former chief economist, the liberal Joseph Stiglitz. Among the complaints is that the institution is dominated by its largest members, major advanced nations, and pushes market liberalization at the expense of better living conditions.

Although the bank was secondary to the World Trade Organization in the 1999 “Battle of Seattle” protests against globalization, its policies nonetheless were among the marchers’ grievances.

Even so, both institutions have proved essential to the era of Pax Americana that, despite blunders, lifted billions out of poverty, spread democracy, and saw the collapse of the Soviet Union and the rise of a market economy in China, as well as making numerous scientific breakthroughs and the longest period of peace among major powers in modern history.

Trump wants to reverse this — from tariffs to defunding scientific research and cozying up to Russian President Vladimir Putin in his efforts to conquer Ukraine.

This isn’t why my father fought the Nazis as a U.S. Army lieutenant from Normandy to Czechoslovakia and my uncle fought imperial Japan in the Pacific.

And yet, here we are. Elections have consequences. And unless Democrats win commanding majorities in both houses of Congress — highly unlikely — America is moving in reverse.