Basque Economics Worldwide Leadership

Trump’s economic strategy, designed by Stephen Miran, seeks to reshape global trade through high tariffs, currency manipulation, and tax reform. Tariffs of up to 60% on Chinese imports aim to protect U.S. industry but risk retaliation from China and the EU, sparking a trade war. Currency devaluation could trigger a global currency war, and funding tax cuts with tariff revenues may prove unsustainable. The Mar-a-Lago Accord pressures allies to buy U.S. bonds for security, risking geopolitical backlash. If the plan fails, it could destabilize the global economy.

Donald Trump’s economic strategy, outlined by advisor Stephen Miran, aims to reshape the global trade and monetary system in favor of the U.S. The plan is based on three pillars: imposing tariffs of up to 60% on Chinese imports and 10% on others to reduce the trade deficit and pressure rivals; actively manipulating the dollar’s value to boost exports; and maintaining low corporate taxes to attract investment, funded by tariff revenues. The controversial Mar-a-Lago Accord would require allies to buy U.S. bonds in exchange for security guarantees. While the plan seeks to restore U.S. dominance, it risks triggering trade wars, financial instability, and weakened global alliances.

The article discusses how Europe's economic recovery in 2025 is being unexpectedly driven by the military industry. Increased demand for weapons and defense systems, spurred by the ongoing war in Ukraine and new trade policies from the Trump administration in the U.S., has boosted industrial activity and public spending. Despite concerns about inflation and economic instability, the reduction in interest rates and the decline of inflation since mid-2024 have created favorable conditions for growth. However, there are risks, including over-reliance on military spending, neglect of other key sectors like technology and clean energy, and the uncertainty caused by fluctuating U.S. tariffs on key trade partners like Canada and Mexico. The article highlights the need for strategic governance, international cooperation, and a balanced approach to ensure that military-driven growth translates into long-term economic stability.

The Post-Pandemic Inflationary Landscape: Trade Tensions and European Rearmament The battle against inflation that began in 2021 is entering its final phase, but the path toward price stability is far from smooth. While central bank actions have succeeded in containing inflationary pressures, the erratic trade policy of the Trump administration — with intermittent tariffs on Canada, Mexico, and China — and the ongoing military buildup in Europe are reshaping the global economic landscape. Increased defense spending in Europe, driven by geopolitical tensions stemming from the war in Ukraine, has stimulated the defense industry, creating an unexpected driver of economic growth. However, this new balance presents challenges: rising domestic demand could reignite inflation, while trade and political uncertainty could dampen growth. The challenge for monetary and political authorities in 2025 will be to strike a balance between price stability, international security, and economic prosperity. 👉 Are we prepared for this new economic scenario?

En los últimos 15 años, Europa ha atravesado una auténtica montaña rusa de crisis que han puesto a prueba sus pilares económicos y políticos. Desde la gran crisis financiera de 2008 hasta la crisis de deuda soberana, pasando por la pandemia del COVID-19 y, finalmente, la guerra en Ucrania, el continente ha sido golpeado una y otra vez, y su capacidad de resistir y adaptarse ha quedado en entredicho. Aunque todas estas crisis han dejado cicatrices, es la última —la guerra en Ucrania— la que presenta el mayor desafío para la industria europea, poniendo en serio riesgo su supervivencia.

Welcome to the 16th edition of Newsletter Basque Macroeconomics 5.0 published by Web 2.0: Basque Economics Worldwide Leadership led by Joseba Madariaga Macroeconomics & Econometrics Professor PhD in Economics In the last 15 years, Europe has faced a rollercoaster of crises that have tested its economic and political foundations. From the great financial crisis of 2008 to the sovereign debt crisis, through the COVID-19 pandemic, and finally the war in Ukraine, the continent has been repeatedly hit, putting its resilience and adaptability to the test. Although all these crises have left scars, it is the latest one—the war in Ukraine—that presents the greatest challenge for European industry, seriously threatening its survival.

Welcome to the 16th edition of Newsletter Basque Macroeconomics 5.0 published by Web 2.0: Basque Economics Worldwide Leadership led by Joseba Madariaga Macroeconomics & Econometrics Professor PhD in Economics. In a political landscape where Donald Trump and Kamala Harris represent opposing views on almost every issue, there is one surprising area of agreement: economic protectionism. This apparent convergence of ideas between two such distinct political figures reflects a deeply rooted paradox in American society, which largely supports protectionist measures. Protectionism, a policy that seeks to impose barriers on international trade to protect the domestic economy, has gained ground in the American public debate in recent years, but its real effects and current relevance are questionable. Both Trump and Harris seem to share the belief that protectionism is key to revitalizing the U.S. economy, protecting jobs, and strengthening national security. This belief has resonated with the electorate, which often perceives globalization as a threat to economic and social well-being. However, this stance overlooks the current macroeconomic context and the true causes of the United States' economic problems. Based on two recent analyses of U.S. trade policy, we will argue that protectionism is the wrong answer to a misdiagnosed problem.

Welcome to the 15th edition of Newsletter Basque Macroeconomics 5.0 published by Web 2.0: Basque Economics Worldwide Leadership led by Joseba Madariaga Macroeconomics & Econometrics Professor PhD in Economics Mario Draghi is a name that evokes moments of great significance in recent European history. In 2012, when the euro was on the brink of collapse, Draghi famously declared, “Whatever it takes” as President of the European Central Bank (ECB). That simple statement, accompanied by extraordinary monetary policy measures, succeeded in preventing the collapse of the common currency and strengthening European cohesion during a time of crisis. Today, more than a decade later, Draghi returns to the stage, this time with a new report offering a critical diagnosis of European competitiveness and proposing a series of reforms to reposition Europe on the global stage. In my reflection, after reading this report, I find that while many of the issues it addresses are already known, the value of Draghi’s work lies in his ability to bring all these elements together in a thorough and well-structured analysis. However, as we will see throughout this article, the greatest challenge is not so much identifying the problems as it is implementing solutions within a fragmented and diverse European architecture.