Luke Malpass16:32, Mar 12 2020
OPINION: So, Donald Trump, under all sorts of pressure in the United States over his handling of Coronavirus, has suddenly turned around and banned all travel of non-US residents from Europe to the United States.
Short of shutting all US borders and ports, this was the worst thing the US president could have done. Up until now Covid-19 look like something that would herald a downturn, but that public health interventions would get on top of. Countries such New Zealand would suffer while the free flow of people was disrupted, but things would stabilise and return to normal in due course.
That could all still happen, but Trump has now ensured that the flow of people will be reduced, airlines will get hammered, trans-Atlantic business will be seriously knee-capped. Global confidence will take a major hit. Like many things the US president does, there is no particular logic evident behind this decision. If Trump wanted to stop the spread of the virus he would have grounded internal US flights. Or banned flights from Europe weeks ago. Now, instead, he has sent a signal to the world – and global markets – that if faced by an unpredictable event, the US will issue a nonsensical and nativist response.
There is a whole industry of White House watchers in the US that try to ascribe grand narratives or strategic nous to anything that Presidents do – including Trump. But if Trump has shown anything during his presidency it is that he is capricious, impulsive and his decisions often lack basic rationality. The only thing he appears to have ever consistently believed is that running a trade deficit makes you a loser. That makes this latest decision even more worrying: it could get tied up in his broader protectionist agenda.
For New Zealand, an open and exposed trading nation at the bottom of the world, this can only be bad news. While any holidaymakers to the US may change their plans and come down to New Zealand on account of being able to actually get in (for now), the fact the we have some Coronavirus cases – although not many – isn’t a great ad. In any case, if New Zealand follows the pattern of many other countries, we should expect more confirmed cases of the virus to pop up after a lull in the 48-72 hours.
The Government’s handling of Coronavirus has improved markedly this week, and the continued low-key approach has been in keeping with the national character.
But with global markets being smashed; a conservative Australian government now spraying around $A17.6 billion in stimulus cash to tourist operators, apprentices, families and pensioners; and the US President giving an unhealthy injection of uncertainty, the Government’s initial economic response expected early next week has taken on a whole new significance. From here it looks likely that this crisis will only get worse – for public health, private wallets, treasury coffers and jobs – before it gets better.