The US should start fiscal adjustment as soon as it can if it wants to head off the risk of exploding debt related to Trump’s tax and spending plan. On 4 July 2025, President Donald Trump signed into law the One Big Beautiful Bill Act (OBBBA) . It contains tax and budgetary provisions and is projected […]
The current US administration’s willingness to weaponise trade makes clear that transatlantic economic relations have become entirely transactional. This column, taken from a CEPR book on the economic consequences of the second Trump administration, argues that Europe must respond to US tariffs, which target weakness, with economic strength: faster productivity growth, cheaper energy, a genuine […]
China’s growth model has continued to rely on expanding industrial capacity and exporting to the world, rather than on domestic consumption. This has lead to a significant increase in China’s global share of manufactured exports and has raised concerns about overcapacity (Figure 1; Xu, 2025). The imbalance arises because China’s expanding production capacity is outpacing […]
The new Trumpian tariffs are not the familiar protectionism G7 nations have applied for decades. Instead of shielding particular sectors, they wall off the entire American goods-producing economy from foreign competition. This is precisely the logic of 20th-century import substitution industrialisation – a strategy widely tried, and widely abandoned, because it raised costs, bred inefficiency, […]
The two most prominent arguments President Trump has advanced for his trade war – both during the early months of his second term, and for decades prior – are that protectionism will reduce the trade deficit and increase manufacturing employment. This column, taken from a CEPR book on the economic consequences of the second Trump […]
The new US administration has made the Federal Reserve’s monetary policymaking more complicated both because of the elevated uncertainty regarding administration policies and because of the extraordinary political pressure put on the central bank. This column describes how, thus far, the Fed has followed a cautious path for policy, waiting for more information on policy […]
Senator Elizabeth Warren has warned BNY that its reported interest in a merger with Northern Trust could violate federal banking laws, saying any potential deal between the two large custody banks raises antitrust concerns. Warren, the top Democrat on the Senate Banking Committee and a longtime big bank critic, told BNY CEO Robin Vince in a […]
The U.S. Commerce Department said on Monday it has opened national security investigations into the import of drones and related components as well as polysilicon, a key component in solar panels and semiconductors. The “Section 232” investigations, which were opened on July 1 but not publicly disclosed previously, could be used as a basis for […]
Advanced economies alone can no longer determine climate outcomes. Emerging and developing economies – home to two-thirds of current emissions and most of the world’s biodiversity – are now the decisive arena. For these countries to transition to low-carbon, nature-positive development paths rapidly and at scale, climate and nature strategies must be embedded in mutually […]
There is currently much discussion about President Trump’s tariffs, the US trade deficit, and its causes and impacts, but little in the way of economic modelling to inform the discussion. This column uses a theoretical model of international trade to demonstrate that the US trade deficit might be regarded as the consequence of rational market […]
