‘This is a tragedy’: Mark Carney warns the 80-year period of US economic leadership ‘is over’ — says America is no longer the anchor of global trade. Here’s how to survive the ‘new reality’

The world’s largest buyer

The U.S. isn’t just the largest economy in the world, it’s also the largest consumer of goods and services.

In 2023 alone, the U.S. imported goods worth $3.17 trillion in aggregate, according to Visual Capitalist’s coverage of World Trade Organization data. China, the second-largest economy in the world, is a net exporter, according to the Financial Times.

As a result, the global economy heavily relies on American consumption, and any trade barriers, such as tariffs or embargoes, could have severe consequences for nearly every country.

This is why Carney is warning that the Trump tariff policy could “rupture the global economy.”

There are plenty of signals validating this thesis. Global stock markets have shed $9.5 trillion in total value since early April, according to The Street, while JPMorgan’s probability forecast for a U.S. recession this year sits at 60%.

However, this isn’t the first time the world has faced an economic calamity, and there are ways you can prepare your finances for a tough road ahead.

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Safe havens

There’s no way to predict what the economy could look like a few months from now. But there are ways to protect your wealth and household budget right away.

Recessions usually coincide with a sharp surge in layoffs and unemployment, so building up a larger-than-usual emergency fund could bolster your family’s finances if you happen to lose income.

Cutting back on discretionary spending and adding a margin-of-safety to your annual budget could help you mitigate the added costs of these import tariffs.

Estimates by the Yale University Budget Lab conducted after the “Liberation Day” announcement suggest that the typical American household could see an average purchasing power loss of $4,700 in 2024 dollars due to the trade war.

For your investments, you could consider a safe haven asset such as gold to protect some of your wealth.

Each ounce of the yellow metal is up 16% over the past six months, and some investors are retreating to it as a safe haven during market volatility.