Mar 13, 2025, 7:34 AM ETInterview

When the levy doesn’t break: a trade-war world adjusts

Markets have shifted due to the realization that Donald Trump's protectionist agenda may not be beneficial, with the S&P 500 down approximately 9% from its mid-February peak.
The current tariff strategy differs from the first term through broader coverage and fewer exemptions, imposing a 25% levy on all steel and aluminum imports regardless of origin.
A specific deadline for new tariffs on Canada and Mexico is set for April 2, following a brief implementation and subsequent one-month deferral.
Trump's stated objective is to repatriate manufacturing and view trade deficits as "robbery," a stance that contradicts standard economic views of mutually beneficial exchange.
Investors are losing faith in the administration's ability to constrain tariff implementation, noting a lack of responsiveness to stock market declines that previously moderated Trump's behavior.
Historical data from the first term suggests tariffs will raise input costs for businesses and consumer prices without significantly boosting domestic production.
Global trade war risks are escalating, with confirmed retaliation from Canada and Europe, creating a potential spiral of increasing levies that threatens export-oriented economies.
Trump has signaled that economic disturbances are a necessary trade-off, predicting a "hard way" to success that will yield results "20 times greater."

In Germany, the Alternative for Germany (AfD) party secured over 20% of the vote in the last federal election, marking more than double the share from the previous election and the highest for a hard-right group since 1933.
Across Europe, hard-right parties now represent approximately 24% of the vote and 23% of parliamentary seats, yet hold only 14% of seats in governing parties.
Only two heads of government in Europe are currently from hard-right parties: Viktor Orban in Hungary and Giorgia Meloni in Italy.
The rise of these parties is attributed to a combination of economic insecurity caused by globalization, the financial crisis, and the Eurozone crisis.
Voters increasingly link declining social status to both economic shifts and cultural changes, particularly regarding immigration.
Mainstream politicians' attempts to adopt hard-right rhetoric on issues like immigration have proven ineffective, often reinforcing voter sentiment toward the hard right.
A "firewall" strategy is employed in many countries where mainstream parties agree not to collaborate with hard-right groups, though this is becoming harder to maintain in nations like Italy.

New research by Michael Erard challenges the myth that first words (like "mama") and deathbed statements universally reveal deep truths or hidden knowledge.
First words are often culturally constructed; for example, parents in Ivory Coast's Bang community avoid early speech to prevent grandparental death, while Papua New Guinean Taiap parents expect defiance.
In Samoa, parents listen for the word "Thai" (a shortened form of "eat shit"), expecting children to be naughty rather than compliant.
Industrialization has altered the perception of childhood, turning parents into "managers" who elicit early, complex speech to signal a child's future economic success.
Medical advances have changed death from a sudden event to a prolonged decline, resulting in final words that are often incoherent rather than profound philosophical statements.
The attrition of language at the end of life resembles a reverse of language acquisition, though this process remains less studied than early childhood development.
Erard argues that non-verbal communications such as gestures, hand squeezes, and cries hold significant meaning for the dying and their families.