ANYONE with a pension linked to the stock market will be entering 2019 feeling somewhat chastened after the worst December since 2002. US shares have been down nearly 20 per cent.

These “corrections”, as economists like to call such them, often act as storm warnings for recessions ahead, and everyone’s trying to predict when the next one will break. You may not have recovered from the last economic recession – most of us haven’t since earnings have been stagnant – but the truth is that the next one is overdue.

Recessions come in roughly 10-year cycles – 1990, 2000, 2008 – and are linked to natural fluctuations in the business cycle. But they are usually triggered by specific events. In 2000, it was the bust when thousands of dodgy internet ventures went under. In 2008 it was banks behaving badly by marketing collateralised debt obligations and other toxic financial derivatives. That required £1.1 trillion in bailout money, loaned by us taxpayers, to prevent a collapse of the global financial system.

However, you can’t step in the same river twice, and we can be sure the next recession won’t be like the last. This time it looks more likely to be governments behaving badly, since the banks have been reined in a little since the funny money noughties. There is nothing like a trade war to precipitate a recession, and the mother of all trade wars has broken out between the world’s two biggest economies: the United States and China.

The tendency is to blame Donald Trump alone for this mutually assured destruction of trade, but China has been behaving badly too. Its average tariffs are much higher than America’s, and it has been engaging in well-documented industrial espionage and intellectual property violations, as well as maintaining an undervalued currency for many years. China is a communist dictatorship and doesn’t play by Western market rules.

However, China’s defenders say that if the US chooses to open factories in China to make its computers and mobile phones, exploiting cheap labour, it can hardly expect the host country not to benefit from technology transfers. China was one of the most impoverished on the planet only three decades ago. It is only now trying to build a consumer society, through increased wages and a more diversified economy, which should be good for world trade.

But Mr Trump has clocked that China is likely to overtake the US in the not too distant future and in his strong-arm fashion is trying to alter the terms of trade while America still has muscle. Hence his slapping 10 per cent tariffs on $200 billion of Chinese imports last year. China immediately retaliated in kind by slapping tariffs on US goods, like Harley Davidson motorcycles and beer.

It makes much more sense to deal with these issues through international forums like the World Trade Organisation. But Mr Trump isn’t into sensible solutions and is now threatening to place 25 per cent tariffs on a further £200bn, and then $500bn of Chinese goods in 2019. This could destabilise the entire global economy. The China economy is slowing fast, just as most of the rest of the industrialised countries have also entered a downturn.

There’s been signs of a Christmas thaw in relations between Mr Trump and President Xi Jinping, but the trade war may only be beginning. And of course the Potus has also been targeting the EU, placing 25 per cent tariffs on steel imports from Europe. (How Brexit Britain could be expected to suddenly enter this global melee, and extract concessionary trade deals from all these warring giants, is one of the more bizarre Eurosceptic fantasies).

The European Union is already experiencing the effects of the global trade war, and growth in the bloc is expected to falter further in 2019, even before Brexit is taken into account. There are other pressures. Brussels has been in a stand-off with Spain over its expansionist budget, and President Macron has not yet settled accounts with the gilet jaunes, who are expected to renew their nationwide demonstrations in the New Year. The rise of populism in Europe has no direct impact on trade and investment, but Emmanuel Macron’s Winter of Discontent could upset one of the largest Eurozone economies just as Germany too is feeling the freeze in its export industries.

Which brings us to Brexit, where a lot of German car exports are at stake if there is serious trade disruption in March, when the UK is scheduled to leave the EU. Forget Project Fear, the effects of Brexit have already been evident in the slowdown in inward investment to Britain and the non-recovery of growth. The UK economy is caught in the doldrums of low wages and low productivity. Structural changes in the digital economy have caused havoc on the high streets – as the collapse of HMV reminded us before Christmas.

The utter chaos of the British Government, and loose talk of a No-Deal Brexit, makes a collapse in confidence in the UK economy a dead cert in 2019. These apparently psychological factors are important. The world’s fifth-largest economy has taken leave of its senses, is cutting ties with its biggest trading partners and is sending legions of skilled European workers scuttling back home. Countries aren’t supposed to do things like this. It is an act of economic irrationality that will reverberate across Europe and the northern hemisphere.

All these factors taken together sound very much like a SparkNotes summary of the causes of the 2019-20 economic recession. There’s just too much stuff going on for it not to have profound economic consequences. Both the big UK parties are fundamentally split, lacking in effective leadership, and without any sense of where the country is going. Social media has turned the public sphere crazy, with Twitter wars infecting politics and destroying rational debate. Of course, an economic recession isn’t inevitable and we shouldn’t talk ourselves into one. But it will take great care and a lot of cool heads to prevent 2019 being the year that everything went wrong at once.