US President Donald Trump’s economic agenda poses a significant threat to global stability. His policies, rooted in free-market fundamentalism, aim to dismantle international trade agreements and introduce tariffs. However, this approach echoes historical Republican leaders like Ronald Reagan and Barry Goldwater, who sought to reduce government intervention in the economy.
Trump’s mercantilist approach prioritizes self-interest over cooperation with other nations. This stance is reflected in his plans to abolish income tax and impose harsher regulations on companies that don’t meet minimum tax standards. The US tax laws have far-reaching global implications, benefiting non-resident shareholders worldwide.
As a result of four decades of financial integration, the US’s economic choices now have significant effects on other countries. The ‘race to the bottom’ in business taxes and climate policy is accelerating, with devastating consequences for the planet. Trump’s reliance on tax incentives and fossil fuel extraction exacerbates income inequality and accelerates climate breakdown.
To address this challenge, Europe must rethink its international economic relations. A new approach could neutralize tax competition, inequality, and climate chaos by making companies pay taxes in the countries where they operate. This ‘interposition protectionism’ would create a virtuous cycle, encouraging countries to set higher standards for taxation and reducing the need for trade wars.
Europe can take action without relying on uniform policies across all member states. A single country could make market access conditional on meeting minimum tax standards, as is already done in other areas like food safety. This system offers a viable alternative to the failing free-trade paradigm and presents Europe’s best chance of ushering in a new era of international cooperation – one that can stop the destructive forces of nationalism before they sweep everything away.
Source: https://www.theguardian.com/commentisfree/2025/jan/20/trump-threatens-a-global-trade-war-europe-must-unleash-a-radical-alternative