Pundits and politicians are vociferously debating the health of the U.S. economy, but one subject that isn’t up for debate is the health of the world economy — it stinks. Economic growth has slowed precipitously in China, India, Germany, France, U.K., Italy, Japan, India and much of the developed world. For now, the U.S. is still the world’s economic lifeboat — but with increasing signs that we won’t be immune to the global economic slowdown.

Consider the following:

• In September, U.S. manufacturing activity plummeted to a 10-year low.
• In September, growth in the service sector of the U.S. economy slowed to a 3-year low.
• Markets now see a greater than 90 percent chance the Fed cuts rates again this month, with growing odds of further rate reduction this year.  

The U.S. is facing strengthening economic headwinds from the rest of the world, and it’s important for the Trump administration to navigate accordingly. Chicago Federal Reserve President Charles Evans recently identified trade and immigration as two potential catalysts for slower economic growth going forward.

On the first of these concerns, global trade is already showing signs of significant weakness. The New York Times reports:

World trade in merchandise is now expected to expand by only 1.2 percent during 2019, in what would be the weakest year since 2009, when it plunged by nearly 13 percent in the midst of the worst global financial crisis since the Great Depression. Only six months ago, the organization was forecasting more than double that pace of growth, a 2.6 percent expansion in merchandise trade.

The W.T.O. warned that intensifying trade conflicts posed a direct threat to jobs and livelihoods, while discouraging companies from expanding and innovating.

Both the United States and China — the world’s two largest economies — have seen a pronounced cooling in commercial activity in recent months, a trend exacerbated by the tariffs they have imposed on each other’s exports, raising costs for businesses and consumers, and discouraging investment.

As to the second of these concerns, immigration continues to remain a missed opportunity for the Trump administration to boost economic growth. I recently spoke to a senior director of a large U.S. corporation who told me that his company currently has over 5,000 jobs openings that they are unable to fill due to a lack of workers. Part of this is due our economic skills gap, but it is also the byproduct of an overly restrictive immigration policy that does not serve our economic interests. Why would we not want to strengthen this American company by making it easier for them to fill their employment needs? Not to mention that more pay stubs means more money in our economy.

One can argue about the strength of America’s economy, but we can’t deny the very real problems facing the world’s. In light of these challenges, it’s time for a pro-growth policy win. I suggest finding agreement with China on trade, revisiting immigration reform, or indexing capital gains for inflation.