Next year will be tumultuous for the global economy. The United States is in shape to expand by 3 percent to 4 percent, while wages and stocks should grow nicely. But there are a number of roadblocks that could slow us down or even send the economy into the ditch in the months ahead.

Divided Congress

House Democrats will try to destroy President Trump Donald John TrumpSteele Dossier sub-source was subject of FBI counterintelligence probe Pelosi slams Trump executive order on pre-existing conditions: It 'isn't worth the paper it's signed on' Trump 'no longer angry' at Romney because of Supreme Court stance MORE through endless investigations, the political version of death by a thousand cuts. His tax returns will be leaked. His older sons will be continuously harassed. Democrats will overplay their hand, only helping Trump in 2020. The danger for the economy is that some in the White House will tempted to appease these tormentors by offering a big infrastructure bill, because we know Democrats love to spend, and combining it with a tax boost on corporations and high income individuals that will hamstring growth.

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Such a maneuver would ultimately fail because a number of Senate Republicans would certainly wage a filibuster. But the possibility of a tax boost, however remote, would dampen investment. Fortunately, Senate Republicans still have the majority. This means confirmation of more sensible federal judges and no real slowdown in deregulation, a key stimulus for the economy that has not garnered enough appreciation.

In the past, split powers in Washington have often benefited the economy. The Republican takeover of Congress in 1994 led to actions such as passing welfare reform, deep sixing a European style takeover of health care, and enacting tax cuts that fueled the great boom of that decade and enabled Bill Clinton William (Bill) Jefferson ClintonAnxious Democrats amp up pressure for vote on COVID-19 aid Barr's Russia investigator has put some focus on Clinton Foundation: report Epstein podcast host says he affiliated with elites from 'both sides of the aisle' MORE to win reelection in 1996. The same thing happened with Harry Truman when a Republican House and Senate passed positive tax and regulatory laws over a veto that gave the president an election winning economy in 1948. But this time divided government will hurt.

Trade Policy

This is the big overhang for the economy. A tariff is basically a sales tax, so a 25 percent tariff on auto imports is equivalent to a 25 percent sales tax. Imposing tariffs hurts countries that export to the United States, but we are hurt here at home as well, both by higher costs and retaliatory taxes.

There are two major issues. Will the new NAFTA be approved by Congress by year end? If not, House Democrats will insist on changes that could kill the deal. If President Trump then unilaterally revokes the existing NAFTA, a major legal confrontation will erupt with Congress. The other alternative would be ending up with the existing NAFTA. In either case, however, uncertainty over the details will curb investment and trade because parties will not know what the rules will look like over the long term.

This uncertainty looms even larger in the other substantive issue of the fight with China. If there is no resolution in coming months, a damaging trade war will ensue, as we have only had skirmishes. This will disrupt sophisticated supply chains, raise prices for American consumers and companies, reduce capital spending, and damage the creation of new businesses, the growth of which has soared under President Trump.

There are more effective ways of tackling Chinese trade abuses, such as imposing killer sanctions against offending companies, industries, and banks. My prediction is that 2019 will see a big bargain with Beijing, the headline being China agreeing to import several hundreds billions of dollars worth of American natural gas over the next decade. But if trade issues are not resolved, the economy and stocks will be hit hard.

Federal Reserve

President Trump has been pilloried for his relentless criticism of Federal Reserve Chairman Jerome Powell over the decisions to raise interest rates. How dare he interfere with the independence of the central bank!

There is actually plenty of precedent for his actions. Harry Truman waged a brutal war with the Federal Reserve in the early 1950s. Lyndon Johnson relentlessly pressured the central bank to pursue an easy money policy. Richard Nixon behind the scenes successfully did the same with Arthur Burns, thereby aiding his reelection in 1972. The first Bush presidency made known its unhappiness with what the Federal Reserve was doing.

President Trump has made his mark with his broadsides, as interest rates will go up next month, but the central bank will be much more cautious than planned in 2019. In this case, Federal Reserve is not guilty of hurting stocks. It signaled the interest rate boosts this year well in advance, and the moves were factored into the market months ago. The decade long suppression of interest rates and excessive regulation hurt the economy by making it more difficult for small businesses to get adequate credit.

The peril for Powell will materialize if the economy does boom next year and the Federal Reserve falls prey yet again to the fallacy that prosperity causes inflation. The phrase to watch out for is an “overheating” economy. The economy is not a machine but rather the activities of individuals. People do not feel like they are overheating if their incomes improve.

Global Affairs

On the global front, the United Kingdom botching Brexit, the European Union mishandling Italy, France and Germany falling into political turmoil, or countries like Mexico, Indonesia, South Africa and others manhandling their currencies could prompt mistaken reactions by others and result in a first class crisis. That is what happened in 1997 when the currency woes in Thailand set off troubles that smashed a number of other Asian countries.

The United States is resilient and our economy is stronger than it has been in years, but President Trump should certainly keep these issues in mind.

Steve Forbes is the chairman and editor in chief of Forbes Media.