By: Shmuel Metz  | 

The Taliban Attacks the Market: How Foreign Unrest Affects the US Economy

With incessant images of Taliban leaders strapped with weaponry and heart-wrenching videos of civilians attempting to flee Afghanistan, even still, a far more ruinous condition lurks behind the scenes. The United States’ departure from Afghanistan demonstrates horrible insight and foreplanning. As Mir Sadat, former policy director for the National Security Council (NSC), notes, the U.S. undercut both evacuation effort timelines and did not extend the airport perimeter to have more protection from attacks, which would allow more access points to the airport. The aggregate of this miscalculation, and many others, resulted in the deaths of U.S. service members, the creation of effective Taliban checkpoints, an inability to retrieve U.S. persons throughout Kabul and the rest of Afghanistan, and a humanitarian disaster at the gates of Hamid Karzai International Airport in Kabul. 

Looking at the broader picture, however, the economic case for pulling out is clear. The impact of the war is staggering. After having U.S. troops in Afghanistan for over twenty years, the cumulative cost of the war is a whopping $2.3 trillion, according to a Brown University study. Throughout that time, 2,500 U.S. soldiers' lives were taken and a total of 250,000 lives altogether. Future interest payments and healthcare obligations to veterans could amount to trillions of dollars as well. This kind of impact is certainly unsustainable long term and the war needed to come to an end. While President Biden made the decision, former Presidents Donald Trump and Barack Obama wanted the troops out as well. The unrest and tension from the war that inundated America for the past twenty years has a clear and extensive impact. 

The detrimental effects on the U.S. from foreign political unrest is not an anomaly. Although the U.S. certainly has one of the most robust economies, it is tremendously impacted by the global economy time and time again. 

The combined effect of the 2011 earthquake, tsunami and a nuclear disaster in Japan, left 18,000 dead and caused over $220 billion in damages. Due to possible radiation in food, the U.S. banned the importation of many goods from Japan. Japan was unable to keep up levels of production for components of critical U.S. imports, such as electronic parts and batteries and transmissions for electrical vehicles.

In 2016, the UK decided to leave the European Union, sinking the British pound and slowing economic growth significantly. This increased the U.S. dollar, making American shares more expensive for foreign investors and raising the cost of exportation of goods to the UK. 

In more recent times, COVID-19 - which emerged from China - has had a far reaching impact on the U.S., and the world. With 720,000 Americans dead, a historic stock market crash with the DJIA declined twenty six percent over four consecutive days and the unemployment rate in the U.S. at 20%, the U.S. is only beginning to climb out from the impact of the pandemic. 

Apart from the negative consequences the U.S. endures from being part of a global economy there are many mutually beneficial gains from international relations. Increased international trade decreases the cost of manufacturing by allowing companies to source raw materials where they are inexpensive and in turn, companies can offer goods at a lower price to consumers. Businesses can outsource services and production to places where labor cost is lower. 

Being a part of the broader economy has improved financial markets and has brought success to many businesses across the U.S. It is no secret that globalization has produced many of the technological, cultural and economic advancements we see today.

Photo Caption: The unrest and tension from the war that inundated America for the past twenty years has a clear and extensive impact.

Photo Credit: Wikimedia Commons