Rich Lesser | The Next Era of Global Growth at Semafor World Economy

Yes. Well, there'll be one word that will come up a lot over the next 15 minutes or so, which is the word resilience. I think the first thing if we just look back at trade, it's a year later. Global trade we project BCG projects is likely to grow at about 2.5% over the next decade with all that's changed. It's a multipolar trading system. It's a very different trading environment. US trade we expect will be less than that. So the US is not withdrawn totally. It will grow, but at a much slower rate. Prior to all the trade actions of last year, we would have projected that at 2.9%. So it has come down. But this idea that trade is going away, it is not; it is shifting. Certainly China's role is growing. There are a number of people defending the global trading system in Europe, Japan, Australia, Mexico, many others.

I think well, when we were sitting here last April, nobody knew what to expect. So let's be honest. And I'm going to say the same thing about energy in 2 minutes. So it'll be a familiar theme 1 year later.

I think this willingness to admit what we don't know is such an important characteristic in leadership right now. And I think that was where we were a year ago on trade. I think we were on the somewhat more optimistic side versus those predicting a complete collapse. I think that's proven true, but we had no crystal ball then. We have no crystal ball now. Obviously in that year, and by the way, also the US economy absorbed that trade impact. I mean, there was some inflation impact, but there was a lot of doomsday predictions about recession. We never believed that this was going to be causing a recession. It didn't. And the economy absorbed it reasonably well. But of course now we're facing two other challenges. One short-term and one short, medium, and long-term. The short-term challenge is the shocks to the global energy system, which are really substantial. I wrote a weekly brief a couple weeks ago drawing on some of our most senior people who had just been at CERAWeek and what was going on down there. You know, 40 assets severely damaged. Some of the liquefaction trains in Cutter will take 3 to 5 years to repair. The damage to the global infrastructure is serious. The logistics system is damaged. Even if this ends tomorrow, meaning we could resume some normal patterns, it would take months to restore. Obviously some of these things will take years to get back to a fully normal system. The expectation will be higher prices than say the baseline of $72 Brent crude that we had before the conflict began. But the truth is, if you're a business leader right now, you have to be planning across a wide spectrum: a cease in hostilities, a resumption where prices come down some but probably not to the level they were before, up through this thing continues and it stays higher for longer.

Yes, I remember. Sitting in the air.

No. I again, the resilience of the US economy specifically is just always underestimated. I think we've had now three times

Because it's a deeply robust economy. It trades a lot within itself. It is going to the rest of the world even in this crisis. Yes, there will be some sort of hit to GDP growth. I was talking to our chief economist over the weekend. We would say if the ceasefire holds, if things get better, that there's still probably a half a point hit, 50 basis points hit on GDP. That's not zero. It's meaningful, and I don't want to go into the details of it here, but it's whereas it's 100 basis points for the rest of the world roughly. That's order of magnitude. But it's not driving us to recession. Of course there's always a risk, but I think over time during the recovery from COVID, the 23 period last year in response to trade, there's too many people that