In a White House Rose Garden address on April 2, 2025, Trump declared that April 2 was “Liberation Day”, describing the announcement as “one of the most important days in American history” and “our declaration of economic independence”. Trump unveiled a two-tier tariff structure applied to all countries at 10% and “reciprocal” country-specific tariffs. Seven days later, following a collapse in the price of all US assets. Including equities, the dollar, and bonds, Trump announced that country-specific tariffs, except on China, would be paused for 90 days, i.e., until July 6.
So in this issue, we are taking a broader look at what is going on, what led to this crisis and what it means for the state and future of the international political economy:
- Ann Pettifor argues that inequality is the root of the problem, combined with a lack of political leadership, posing significant financial risks to the global economy. Paul Frijters centres the problem on the power of oligarchs, while Erald Kolasi warns of the inevitable decline in the US, leading to conflict.
- Richard Vague recounts the history of US dominance and then decline and proposes a return to industrial strategy; John Komlos proposes a new mechanism to ensure balanced trade; and Christian Felber believes that we need to put ethical outcomes at the heart of trade policy rather than see it as an end itself.
Much of the commentary focuses on the conflicts in the Global North, we want ensure consideration of the implications and potential of the Global South is not sidelined: Lebohang Liepollo Pheko tells how alternatives to neoliberal consumption are being built in the Global South; María Gabriela Palacio Ludeña writes about the implications for countries, such as Ecuador, who followed the neoliberal agenda and are now exposed to the fallout from Trump; and Auska Ovando and Martha Hungwe explain why trade between Global South nations is increasing and why the forces at play should not be solely those of the market.
We also feature broader economic discussion: David McWilliams talks about his book seeking to explain money to a broader audience; Laleh Khalili explores the nature of extractive capitalism, arguing that the US will remain the primary global power centre for some time; and Michael Williams explains why surplus, not scarcity, explains our economic systems.
Last but not least, our regular columnists, Frances Coppola examines hyperinflation in Gaza and Professor Verity Bastion, celebrates Prinz Charlz’s entrepreneurial talents in an unstable world.
