Reflections on the international financial situation
Jacques de Larosière writes that markets are blind to Trump's policy shocks that are fragmenting the monetary ‘system’
The world economy has recently been hit by two successive shocks. The first was the Covid-19 pandemic in 2020–22. Now, there’s the policy shock of the Trump administration unleashed in 2025. Let’s analyse this latest shock.
It’s an intellectual shock: the Trump administration advocates customs protectionism, whereas economic thought and politics since the mid-19th century had advanced along the path of progress by opening borders. By reverting to the tariffs of 1900 (a level of around 6% on
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