Global trade disruption is a symptom of a deeper malaise | Mohamed El-Erian

Resolving US-China trade war is not enough to ward off what many fear is a looming worldwide recession

It is only a matter of time until the escalating tensions between China and the US prompt many more economists to warn of an impending global economic recession coupled with financial instability. On 5 August, Bloomberg News said that the yield curve, a closely watched market metric, "Blares Loudest US Recession Warning Since 2007". And Larry Summers, a former US treasury secretary who was also closely involved in crisis-management efforts in 2008-09, recently tweeted: "We may well be at the most dangerous financial moment " since 2009."

Many economists argue that resolving US-China trade tensions is the best way to avoid significant global economic and financial disruption. Yet, while necessary, this would be far from sufficient.

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