ALBERT EDWARDS: The endgame for the global economy is arriving sooner than we expected

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• A trade war would bring forward the next financial crisis sooner than expected, according to Societe Generale Strategist Albert Edwards.
• For several years, Edwards has warned that "waves of deflation" would cause a 2008-style crisis.

Albert Edwards says his bearish thesis for the economy may be unfolding sooner than he expected.

The Societe Generale global strategist has long warned about the threat of deflation, driven by countries like China devaluing their currencies to make exports more attractive. The end result would be a collapse comparable to the 2008 crash, he has said.

Edwards now points to the Trump administration's trade policy as another catalyst that could hasten the next crisis. Recent tariffs the US imposed on steel and aluminum imports threaten a full-scale trade war, he noted.

"A trade war and competitive currency devaluation was always going to be the end game in our Ice Age thesis as a global deflationary bust destroyed wealth, profits, and jobs," Edwards said in a note on Thursday.

"But it looks as if it might be arriving sooner than we had anticipated."

China exports just 1.1% of its steel to the US, and so the tariffs were considered unlikely to do serious damage to Chinese businesses. What's more immediate for a trade war, Edwards said, is retaliatory action against China by the US for alleged intellectual property theft. The Nikkei Asian Review reported Wednesday that the US was set to impose tariffs on $60 billion worth of Chinese products as punishment.

The US could also turn on other trading partners as Trump continues to advance his "America first" agenda.

"Boiling away in the background are Germany's, and now too the eurozone's, outsized trade surpluses" with the US, Edwards said. He added, "expect President Trump to soon turn his protectionist fire on both Germany and the EU. That will be messy."

Societe Generale