Dominik A. Leusder is an economist and writer based in London.
The world’s developing countries are still recovering from the commodity shock and debt crisis that followed the pandemic and Russia’s invasion of Ukraine. The disruption of global trade caused by Trump’s tariffs now threatens to reignite the crisis.
What caused Donald Trump to walk back on many of his tariffs last week was not domestic pressure but a run on the market for US Treasuries led by large institutional savers. If US debt is no longer a safe asset, then American hegemony is also at risk.
The US trade war is a result of domestic elites’ refusal to accept America’s relative decline. The recent experience of Japan shows how economic decline can be managed.
Yesterday Donald Trump announced sweeping tariffs on all of America’s trading partners, with the explicit aim of “liberating” the US from unfair trade. Not only are these efforts confused, they will lock America in a cycle of stagnation and inflation.
Donald Trump has at times pitched himself as a supporter of a weaker dollar. But he is too wedded to economic interests like Wall Street and tech that benefit from a system of dollar dominance that does little good for the average American.
Donald Trump’s tariffs are part of a desperate attempt by a declining America to cling to its position as the world’s most powerful nation by using its economic heft to coerce rivals and allies.
Donald Trump has touted his planned tariffs as a way of protecting American workers. They’ll do little to reverse industrial decline but will drive up costs for the average American.
Last week, China responded to new US tariffs with a ban on exporting rare earth minerals. While both countries’ leaders engage in great power rivalry, they risk imperiling the green transition, which will rely on the trade of technology between nations.
Federal Reserve chair Jerome Powell has finally signaled the beginning of the end of high interest rates. But keeping rates higher for longer might have done unnecessary damage domestically and abroad, including to the all-important energy transition.
Donald Trump’s embrace of cryptocurrency, which is dominated by the most reactionary and stupid representatives of the tech industry, has made it a partisan issue. But it might turn out to be a misstep.
Neoliberalism is embedded in the European Union’s DNA. But for the continent’s left, there are few good alternatives.
Developing countries are undergoing an unprecedented combination of currency crises, debt, famine, and political unrest — and the US decision to raise interest rates risks adding fuel to the fire. A stable system of global economic governance is needed.
The latest Western sanctions mean “total economic and financial war on Russia,” according to a European finance minister. There’s little reason to hope this will stop Putin’s war — but it will bring a longer-term attrition that mainly hurts ordinary Russians.
Last week, the Bank of England decided to raise interest rates again in an attempt to curb rising inflation. The move will likely increase household debt and unemployment, worsening people’s living conditions.
Angela Merkel’s 16-year German chancellorship has finally come to an end. Though she presented herself as the sensible and stabilizing force in Europe, her tenure was characterized by economic neglect, obstruction, and brutal austerity.
Whatever its shortcomings, Thomas Piketty’s latest book, Capital and Ideology, is a serious attempt to map our social world without resorting to easy abstractions.