• President Trump aims to reduce government waste, with focus needed on SEC whistleblower programs.
• SEC's whistleblower system has become a "whistleblower-industrial complex" flooded with frivolous tips.
• Critics argue payouts favor well-connected lawyers and former regulators, not legitimate whistleblowers.
• Ohio auditor debunked claims by high-profile whistleblower Ted Siedle, highlighting system flaws.
• Programs face constitutional concerns and calls for reform, similar to Rule 11 sanctions in civil courts.

• Catalonia's Rodalies rail service has faced constant issues, including delays, breakdowns, strikes, and an internal investigation into alleged sabotage, dominating headlines for weeks.
• A report from 3CAT revealed that during March 2025, there was at least one incident daily, February had issues on all but four days, and January averaged daily disruptions with only eight problem-free days.
• Collectively in Q1 2025, only 12 days saw no disruptions out of 91 total, with 75 days experiencing incidents tied to malfunctions, strikes, or cancellations – an 85% incident rate.
• A parliamentary session unanimously reprimanded Sílvia Paneque, the Catalan territory minister, though she cited ongoing improvements despite acknowledging the challenges: "It won't be easy or fast."
• Graphics illustrating monthly incidents display escalating problems throughout early 2025, with February being the least problematic month at 88% disrupted days.

Rodalies service has been the focus of attention in Catalonia for weeks. Delays, breakdowns, hundreds of incidents, strikes, and lately an internal investigation into suspected sabotage have plagued the Catalan rail network, which now appears headline material daily due to one issue or another.

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  If you're a Madrid native visiting Catalonia never say this, you could court trouble

• ... (similar translations for other related items)...

In fact, a 3CAT report shows that in March 2025, there was at least one incident daily. February 2025 saw disruptions on every day except the 16th, 18th, 20th, and 23rd. January 2025 had 8 days without issues.

In total, during the first three months of 2025, only 12 days ended without disruptions while 85% of the days (75 total) faced incidents including failures, construction delays, strikes, or cancellations.

Last week's thematic parliamentary session led to the censure of Silvia Paneque, Catalonia's territory minister, who defended current improvements but admitted: "It won't be easy or fast."

• President Trump signed an executive order ending collective bargaining for most federal government unions, targeting agencies with national security roles.
• Federal union employees earn significantly higher pay and benefits compared to private-sector workers, averaging $100,000–$140,000 annually.
• The order aims to eliminate "official time," where taxpayers fund union activities, costing over $150 million yearly.
• Unions like AFGE oppose Trump's policies despite many members supporting him, as leadership heavily favors Democrats.
• The order's legality may face challenges, but it seeks to reduce union obstruction in the federal workforce.

• The article discusses a scandal involving new sentencing guidelines that would require judges to "normally" consider pre-sentence reports (PSRs) for ethnic minority offenders, potentially giving them an advantage in avoiding prison.
• Shabana Mahmood, the Justice Secretary, opposed the guidelines, calling them unfair, and proposed emergency legislation to block their implementation.
• The Sentencing Council defended the guidelines, claiming they were meant to ensure judges had sufficient information, not to impose leniency based on race—though the effect would still be discriminatory.
• The article highlights broader concerns about ideological activism in the justice system, including efforts by the Bar Standards Board to enforce diversity mandates on barristers.
• Data on ethnic representation in the legal profession is contested, with critics arguing that claims of systemic racism are exaggerated or misleading.

It might not induce quite the same moral nausea as the Pakistani rape gangs cover-up, but the ongoing sentencing guidelines scandal is another hard-hitting episode in a promising new series in which public disgust is suddenly and belatedly directed towards racist policies in the justice system.

This latest upset concerns pre-sentence reports and shines a light on how the system has been captured by political activism. “PSRs” are reports about a defendant written by probation officers for the assistance of the judge in a particular case. Probation officers advocate for probation. If there is any chance that a defendant might avoid prison, his lawyer will want a PSR: it’s just that little bit harder for a judge to bang someone up if he has a document in front of him arguing for a non-custodial sentence such as a Community Order, written by an expert and filled as they always are with very scientific-looking sociological analysis in support of that recommendation.

No PSR is needed, though, if a judge thinks it “unnecessary” — which generally means: if the defendant will definitely be sent to prison. Otherwise, a report must be obtained. The new guidelines, which were due to come into force this week but were temporarily suspended following a last-minute legal intervention by Robert Jenrick and are soon to be made unlawful and of no effect by Shabana Mahmood’s emergency legislation, add to the “unnecessary” exemption: “A PSR will normally be considered necessary,” the proposed instruction goes, “if the offender [is] from an ethnic minority…”

In edge cases, then, this new line will nudge judges into ordering a PSR when they otherwise wouldn’t. Then, armed with a report recommending a Community Order, the non-white offender has a significantly higher chance of avoiding custody. Of course, not all PSRs recommend non-custodial sentences. But most do. So, on average, a PSR helps you avoid prison.

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The unreported anarchy of British courts

By Gavin Haynes

When Shabana Mahmood, the Lord Chancellor and Secretary of State for Justice, complained that “access to [a PSR] should not be determined by an offender’s ethnicity”, the Chair of the Sentencing Council, Lord Justice William Davis, replied at length. The closest he came to dealing head-on with the fundamental unfairness in the effect of the new guideline — that non-white offenders would on average enjoy a race-based advantage — was something of a straw-man: “I have seen it suggested that the guideline instructs sentencers to impose a more lenient sentence on those from ethnic minorities than white offenders. Plainly that suggestion is completely wrong.” Plainly. But that is not what Mahmood, who is now proposing emergency legislation to block the implementation, nor any sensible person, is saying: there’s no instruction to impose a more lenient sentence, but a more lenient sentence will be the overall average effect if the special encouragement to order a PSR for a non-white defendant is to be heeded.

The Chair even accepted that “if access to a pre-sentence report were to be determined by membership of […] an ethnic minority background – that would not be a proper approach”. But if race-based preferential treatment is improper if it always happens, then it is improper if it “normally” happens. It is a distinction of degree, not kind. Ethnicity might not be strictly determinative, but it is a significantly influential factor.

As to the intention behind the guidance, the Chair explained, “the purpose of the list [that includes “ethnic minority”] is to remind sentencers of the kinds of cases in which it is likely that they will require more information”. But that is not what the guidance says; that purpose is not at all clear from the relevant text. And anyway, a discriminatory effect is a discriminatory effect.

More generally, the letter notes that it wasn’t the Sentencing Council’s idea, most of the consultation responses supported it, and the Lord Chancellor had not previously complained. All true, but that absolves neither the members of the Sentencing Council, who bear responsibility for its output, nor the wider political culture in which it operates. It is particularly striking that not one of its 14 members — including academics, several very senior judges, a Chief Constable of Police, and the Director of Public Prosecutions himself — thought to call out this obvious unfairness. As the Chair emphasised in defence of the measure, the Council’s vote was unanimous. But we shouldn’t be too harsh on them: you don’t get to be a member of the Sentencing Council, nor even a Court of Appeal judge, without proving your commitment to EDI.

Above all, and regardless of whether the guidelines come into force or not, the Chair’s letter gives an illuminating snapshot of how the Blob quietly turns unpopular racial activism into force-of-law policy. In this instance, the idea had its origins in a “thematic inspection report” by HM Inspectorate of Probation. The letter does not identify the specific report, but it is probably this one, which complains that “[pre-sentence] reports did not consider the impact of structural barriers on the lives of black and mixed heritage boys or explore their experiences of discrimination”. Without first-hand knowledge of the Probation Inspectorate, its Blob factor is hard to determine, but the slides that accompany the report (sample extract: “add some unity, understanding, and respect for the future, Serve with justice, And enjoy”) indicate that it’s probably on the high side.

The next step was for the “Probation in Courts” team to “highlight what they considered to be the importance of referring to specific cohorts when reminding sentencers of the importance of requesting pre-sentence reports”. After that, the Sentencing Council considered the Equal Treatment Bench Book, relevant passages of which include a summary of findings from David Lammy’s 2017 report on BAME outcomes in the criminal justice system, such as the significant overrepresentation of black people in prison, the (not unrelated) fact that black defendants are much more likely to plead Not Guilty, and the observation that “pre-sentence reports may be particularly important for shedding light on individuals from cultural backgrounds unfamiliar to the judge”. On this basis, then, and taking into account “all the available evidence and guidance”, the Sentencing Council decided to insert the fateful lines.

Then came the consultation process, and it was noted in the consultation report that “many individual respondents, including some magistrates, did not believe there should be a cohort list at all, mostly citing reasoning around the idea that the list is biased and conflicts with equality in sentencing”. “While responses varied,” the report continued, “with strong views both for and against the list, overall, a much higher number of respondents supported retaining the list.” But the institutional consultees tend to be, per O’Sullivan’s First Law well-disposed towards “positive” discrimination — and there are powerful disincentives for individuals working in criminal justice to cry foul. It’s hardly a fair referendum.

Another ongoing battle in this area, which gives a flavour of the climate in which lawyers now operate, is the Bar Standards Board’s efforts to replace a duty not to discriminate with a duty to “act in a way that advances equality, diversity and inclusion”. The consultation closed in November last year, and is yet to report. Last year’s Chair of the Bar, Sam Townend KC, has opposed the change because it is “likely to hinder progress” and “probably unlawful”. Former Justice Minister David Wolfson KC called it “coercive, illiberal, and dangerous”. Akua Reindorf KC said that it could put barristers “under a duty to promote an ideological position with which they disagree”.

But the Director General of the BSB, Mark Neale, was unrepentant, and sought to reassure the legal journalist Joshua Rozenberg (another critic of the change) that the consultation was “very genuine”. As opposed to what, one wonders — other consultations he has presided over?

In fact, the proposed new duty is effectively already in force, because anyone applying to become a KC has to prove that they are taking “positive action to promote diversity…” Indeed, the assessed competency entitled “Diversity action and understanding” is given the same weight as written and oral advocacy combined. But no one much spoke up when that was brought in, and now — surprise, surprise — the BSB now prays it in aid. Relax! You’re already doing it actually! It can’t be that bad!

Shortly before the BSB announced their proposed change, the Bar Council Chair had suggested that the regulator leave EDI matters to the profession. But the BSB (statutorily separated from the Bar Council since 2007) is obliged to “encourage a diverse profession” under s.1 of the 2007 Act. Its chief, explaining why he would not do as the Bar Council Chair suggested, claimed that “students from minoritised backgrounds are half as likely to be successful with pupillage applications as equivalently qualified White counterparts”. However, in no meaningful sense is this true.

The data from which the claim is likely derived (he gives no citation) was analysed by the Bar Race Working Group, a body established by the Bar Council in the George Floyd summer of 2020. It consisted of 32 barristers, of whom around 80% are from an ethnic minority. They concluded, in their 2021 report, that “the data… categorically and definitely evidences, in quantitative and qualitative terms, that barristers from all ethnic minority backgrounds…  face systemic obstacles to building and progressing a sustainable and rewarding career”.

According to the BSB’s 2021 report on diversity at the bar, the percentage of non-white barristers that year was 14.7%, while the percentage of non-white working-age people in the population as whole was… also 14.7%. That does not seem very racist. As far as pupillage is concerned (that’s a barrister’s year-or-more-long apprenticeship, hard to obtain) at least 23% of pupils were found to be from ethnic minorities in 2020, which compares with 20% ethnic minorities among the juridiction’s 25-34 year-olds (roughly the age-range of pupillage applicants). That does not seem very racist either.

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Do Just Stop Oil deserve to be in prison?

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So how could Neale be claiming that ethnic minorities are half as likely to get pupillage? The answer seems to lie in the fact that ethnic minorities attend Bar school and apply for pupillage in hugely disproportionate numbers: 39% of pupillage applications in 2022 were from ethnic minority applicants (actually more like 42% if the “prefer not to say” answer is evenly distributed), whereas they only account for 21% or 22% of pupillage offers.

So, although they outstrip their proportion in the population, they are not succeeding in proportion to their rate of application. Alright, but one explanation might be the large number of foreign students on the Bar training course. The status of being “called to the Bar”, even if they do not obtain pupillage, confers professional advantage in many former commonwealth countries. If, as is likely, many of these students have non-native-level English and limited connection to this jurisdiction, it is perhaps not surprising that their success rate is lower. Whether or not this is in fact the reason, you can be sure that any such alternative explanation is given no space in any of the official reports on the matter. To say that ethnic minorities are “half as likely” to get pupillage, when their proportion among pupils is higher than their proportion among their age group in the population at large, and just leave the inference of racism there for the taking, is at best deeply misleading.

But this is how it seems to go in the justice system now. Whether it’s Lammy on racist courts, or the BSB on racist barristers, data is interpreted to fit an agenda. And the resulting bad idea, in breach of an important principle, is laundered through public consultations few sane people have the time or nerve to respond to. Then, the thick end of the wedge is driven in as small victories are parlayed into bigger ones. If only we had a barrister as Prime Minister, who valued meritocracy and the independence of the Bar and judiciary, who might be able to make all this stop.

• The Trump administration's coalition includes both MAGA populism and DOGE libertarianism, with figures like Steve Bannon and Elon Musk representing their respective factions.
• MAGA rejects neoliberal globalism, prioritizing national interests, while DOGE advocates for deregulation, economic liberty, and technological optimism.
• Despite apparent divisions, the coalition remains intact due to shared opposition to progressive authoritarianism and overlapping policy goals.
• Vice President J.D. Vance has worked to bridge the gap between MAGA and DOGE, emphasizing their compatibility in speeches on AI, free speech, and economic policy.
• The coalition is likely to endure, as both factions benefit from a common enemy and Vance's efforts to unify their visions.

As we begin approach the 100^th day of the second Trump administration, the apparent division between MAGA populism and DOGE libertarianism remains one of the major stories of this new era. The MAGA firebrand Steve Bannon and the DOGE impresario Elon Musk are the public faces of this divide. Bannon, in particular, has been vocal in his denunciations of DOGE as a fundamental betrayal of basic commitments of MAGA populism, describing Musk as “evil”, an “oligarch”, and a “parasitic illegal immigrant”.

Yet as Musk is reportedly being ushered out of the administration, there is reason to be sceptical of overheated reports of a fundamental rupture.

Points of divergence are obvious, to be sure. MAGA represents a repudiation of older neoliberal orthodoxy, the article of faith once held by the mainstream of the Republican Party and the triangulated centre-left of the Clinton-Blair and Obama years. Capturing the GOP through the gravitational force of Donald Trump, MAGA rejected the imagined globalist free-market paradise in which products and workers flowed freely in a borderless, flattened world. Dreams of a liberal international order led by US and European elites have been shattered as old allies now regard each other with deepening mistrust. Deportations, tariffs, and a focus on regional hegemony have become the centrepiece of a robustly America First reorientation.

DOGE, by contrast, appears to be a reconstitution of a longstanding libertarian agenda. While MAGA emphasises the need for a powerful government acting forcefully on behalf of its citizens, DOGE has revived Reagan-era commitments to downsize and outright eliminate vast swaths of the federal government. It promotes an agenda of deregulation and economic and individual liberty. Its commitment to a more porous economic landscape is now muted, but not forgotten.

The techno-libertarians preference for open borders (at least, for some classes of newcomers) has been silenced for the moment by the furious MAGA response to then-DOGE co-director Vivek Ramaswami’s efforts to increase the number of H1B visas for engineers from Asia. Musk’s dreams of colonising Mars likewise reflect DOGE’s deepest commitments not just to a borderless world, but a borderless humanity, as does his most recent claims on X that biological humanity is a “boot-loader” for “digital super-intelligence”.

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Yet stories about the divide, mainly from journalists in mainstream newspapers and journals, increasingly seem to be born of a lack of political acumen and an excess of wishful thinking. A yearning for a crack-up and attendant dysfunction has blinded many political observers to the more complicated reality of coalition politics. American politics invariably gives rise to political coalitions that are always to some degree internally incoherent.

However, philosophical incoherence does not equal governing inability or paralysis. The success of all political coalitions depends in equal parts on deeply shared animus against a common enemy, on the one hand, and overlapping consensus in some key areas, on the other. If those two main conditions persist, then a successful political agenda, even amid a degree of constrained internal conflict and compromise, is not only possible, but likely.

This was true during the Reagan administration — when pro-business libertarians, Cold War Hawks, and social conservatives were able to maintain a working coalition; and it was true during the two terms of Obama, when the woke “identitarians”, the old labour Left, and neoliberal technocrats were able to maintain an esprit de corps.

Like those two administrations, the Trump coalition enjoys a common enemy and an overlapping consensus. For that reason, the MAGA-DOGE coalition will persist in relative comity at least until the start of the next campaign cycle, which begins in fewer than two years. Even after that point, MAGA-DOGE will be the working coalition to which presumptive 2028 Republican candidate, Vice President J.D. Vance, will seek to appeal and ride to victory.

Indeed, there is no better figure than Vance to provide a window into the reasons why this coalition is not in the midst of fracturing. Not only has Vance studied with seriousness their respective intellectual sources, but as a matter of deeply personal biography, he understands himself as a cohesive combination of those two intellectual and political streams. In three notable speeches, Vance has already begun to lay out his vision for both his own and America’s political future, one which is notably attentive to rendering the apparent contradictory MAGA-DOGE coalition into a complementary whole.

The first speech was delivered on 11 February, 2025, at the Artificial Intelligence Action Summit in Paris. The second speech — arguably his most impactful to date — was delivered three days later at the Munich Security Conference. The third speech was delivered on 18 March at the American Dynamism Conference. All three spoke at least implicitly about the relationship of the two parts of the Trump-Vance coalition, with the latter of the two offering the most explicit effort to date to synthesise the two seeming opposites.

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The first of these speeches appeared to be the most “DOGE”-friendly, with Vance chiding Europeans especially for their eagerness to place peremptory limitations on AI developments. He lauded recent advances in AI, offering a firmly “techno-optimist ”spin characteristic of the DOGE worldview. In his encouragement of a “deregulatory flavour”, the influence of the likes of his benefactor Peter Thiel is evident, particularly in Thiel’s expressed concern for the ways that fears of apocalypse have thwarted innovation and led to an era of technological stagnation.

However, in other respects, even in his most DOGE-friendly speech to date, Vance simultaneously emphasised how AI developments stand to benefit those of a MAGA persuasion. Several times, Vance nodde to the common enemy of both DOGE and MAGA, the weakened Leviathan of woke progressive authoritarianism. Highlighting their shared animus, Vance insisted before his largely European audience that AI should “remain free of ideological bias” and be deployed in ways that avoid being co-opted as a “tool of authoritarian censorship”.

But his most MAGA-inflected point was to underscore AI’s potential to generate new jobs in a plethora of industries. Vance rejected a common fear of MAGA technophobes (such as that expressed in Tucker Carlson’s support for at least a temporary ban on driverless trucks), stating that “AI, I really believe, will facilitate and make people more productive. It is not going to replace human beings. It will never replace human beings”.

He expressed his excitement over the ways that AI development was “grounded in the real and the physical economy”, emphasising the hands-on work of doctors, manufacturers, and soldiers. To further the appeal to MAGA denizens, he emphasised current US leadership in this technological space, one that translates into benefits for American national security. Foreshadowing his other major speeches early in his term as vice president, Vance constantly emphasises how MAGA ends and DOGE ends share considerable overlap.

The widely discussed Munich Security speech again had elements intended to reflect, and appeal to, both elements of the Trump-Vance coalition. Again, the “common enemy” was identified: the oppressive regime of progressive speech and idea regulation. Vance called out European liberal elites for their promiscuous use of government power to suppress disfavoured views and even disqualify candidates and entire political parties from electoral consideration.

The “free-speech” dimension of Vance’s remarks reflected the libertarian commitments of the DOGE constituency, while the clear efforts to liberate “Make Europe Great Again” views from legal and political constraint are the necessary precursor to populist electoral success. In effect, Vance was signaling that (in this case) DOGE means are necessary for MEGA ends. Only a more libertarian approach to speech and political expression would clear a path to a comparable populist movement in Europe, one emphasising the need for secure borders, a producer economy, and greater military realism.

These themes were reiterated in a more recent speech by Vance, this time in Washington at a summit organised by Silicon Valley disruptors such as Marc Andreessen. At that event, Vance confronted head-on the dominant narrative of a divide between “techno-optimists” and the “populist Right” of the Trump coalition, declaring that he rejected the idea of an unbridgeable divide between the two as a “proud member of both tribes”. Vance echoed themes from his Paris speech, emphasising not only the desirability and even inescapability of innovation, but praising its potential to benefit workers — even citing Saint John Paul II — according to their work lives ever greater dignity.

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But in a speech before a Silicon Valley audience, Vance underscored a main MAGA point: “deindustrialisation poses risks both to our national security and to our workforce”. While acknowledging the potential loss of meaning that technological disruption of older industries poses to the industrial workforce, Vance emphasised a point intended to win over both MAGA and DOGE constituencies: globalisation’s “hunger for cheap labour” has been bad both for American workers and bad for innovation.

Strengthening the American manufacturing sector, he noted, would have the benefit of reintegrating what globalism has separated: design from manufacturing, engineers from assembly, thinkers from doers. Indeed, speaking in quasi-Marxian language of the dangers of “alienation”, Vance in fact articulated a view that could be easily shared by the most pro-union factory worker and the most libertarian technologist: work and products improve with integration.

An oft-repeated theme in Walter Isaacson’s biography of Elon Musk is how the Tesla and SpaceX boss rejected the Steve Jobs model of “designing” in Cupertino and producing in China. Instead, in every one of his manifold endeavors, Musk has sought to bring into close proximity the engineers and the fabricators, believing with considerable evidence that their separation leads to the inability of each to learn from the limitations and insights of the other. Rather than discerning a DOGE-versus-MAGA narrative, Vance stresses how the aims of each align, even as they seek to defeat a common enemy.

More clearly and consistently than anyone in this not-yet-100-day-old administration, Vance loses no opportunity to articulate the basic alignment of DOGE and MAGA. As with any coalition, there are and will continue to be tensions (as Vivek discovered). Vance may yet be proved wrong that technologies such as AI will prove beneficial not only to workers, but to humanity at large (I, for one, hope that humanity is not the “biological boot-loader for digital superintelligence”).

But Vance is not only intellectually and biographically, but politically as well, the “child” of DOGE and MAGA. Like any child, he aims to articulate the virtues and compatibility of his parents. Those who believe, or hope, that the coalition is on the verge of dysfunctional collapse may be surprised by how durable it is — and will remain under a successor administration.

• Regimes end in phases: Trump's tariffs mark a "Gorbachev moment" for globalization, similar to how communism declined over a decade.
• Tariffs will initially raise US revenue and spur industrial relocation, with long-term effects outweighing short-term economic disruptions.
• Trump's tariff strategy will likely succeed in reshoring manufacturing but risks recession if tax policies falter and budget deficits persist.
• The EU lacks effective retaliation options—its trade surplus, reliance on US goods, and internal barriers limit meaningful countermeasures.
• Europe faces a dilemma: collaborating with China risks trade wars, while resisting US tariffs weakens its economic and geopolitical stance.

When regimes end, they end in phases. Communism died over a period of 10 years, starting with the strike at the Gdansk shipyard in 1980. The fall of the Berlin Wall in 1989 was the great symbolic episode, and the 1991 coup against Mikhail Gorbachev was the final push. Yesterday was globalisation’s Gorbachev moment. Trump’s first term was Gdansk, the canary in the coal mine.

On Liberation Day, international macroeconomists were busy digging out the Project Fear models with which they spectacularly misdiagnosed the economic consequences of both Brexit and the sanctions against Russia. But, really, tariffs are better viewed in terms of longer cycles, as is the case in politics. In the very short run, they constitute a price and output shock, with some characteristics of the economic impact of Covid. The tariffs will raise substantial revenues for the US government this year and next, with industrial relocation playing a progressively more important role in the following two years.

When Tesla invested in Germany, there were two years between the announcement and the actual beginning of production. But the initial announcement was preceded by a year of evaluation and negotiations. Companies with existing plants are best placed to expand production quickly. Taking stock after three or four years is the preferable way to judge this, and the obsession with year-one effects is the reason why people are misjudging trade-related policy decisions.

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Will Trump get what he wants? In terms of reshoring manufacturing, the answer is probably yes. For the largest trading partners, such as China and Germany, this will be a massive shock because of what it implies for the sustainability of the current economic models. Contrary to predictions, there has not been a compensating dollar revaluation, which open macro models would predict as a market response to tariffs. The unwinding of the globalisation Ponzi scheme, which brought increasing capital flows into the US markets, is now clearly the bigger factor.

Politically, these tariffs will work for Trump. Foreign manufacturers are already declaring that they will step up investments in the US. The old manufacturing jobs won’t come back, but new ones will be created. There is, though, a serious risk of a US recession this year if Trump fails to get his tax policies through Congress. The Republicans may lose the midterm elections. But if the goal is to raise external revenues, reduce the budget deficit, and reshore manufacturing, those tariffs will work — so long as one remembers that they cannot do everything at the same time.

Europeans in particular should be wary of wishful thinking. There were plenty of gleeful projections of a more severe impact for the US than for Europe. In the short term, there will be a negative effect on the American economy, as the tariffs are a huge tax on US consumers. 

It’s a struggle, though, to see what the EU can do in return. The bloc ran a trade surplus of $230 billion last year and the current account surplus against the rest of the world is rising again, back towards the pre-Covid levels, when the euro area adjusted to the sovereign debt crisis by depressing consumption and investment. This is the unsustainable element of the post-Cold War international economic model, along with China’s financial repression. The EU could promise to import more US defence goods, but this would run counter to its strategy of making itself more independent from the US, which should be a more important strategic goal than tariff-avoidance. Nor can the EU simply decide to not buy more LNG from the US. In any case, even if the EU were to make such a promise, the tariffs would only be lifted afterwards.

The EU could decide to reduce its own tariffs, remove quotas, and non-tariff barriers. One example of a non-tariff barrier is the lack of a German motorway speed limit. This necessitates a disproportionately high safety standard for cars — a protectionist measure designed to protect the European car industry from imports of cars that cost half as much elsewhere. If the EU were to reduce the direct and indirect tariffs and the quotas on US agricultural products, then we could see a pathway for negotiations. But the US is not going to lift its tariffs in anticipation of future EU action. Those times are over.

What, though, if the EU were to impose a tariff on US services? This is the closest the bloc has to a bazooka — it has a services deficit with the US of roughly half the size as its goods surplus. But a tariff on services is difficult because suppliers can easily evade them, by relocating out of the EU and citizens would push back since there are often no alternatives.

In any case, one of the reasons it would be unwise to predict the economic consequences of yesterday’s decision is that so much depends on how others react. China, for example, could respond by diverting trade to the EU, and we could end up with a EU-China trade war. Ursula von der Leyen has already ominously said:  “We will also be watching closely what indirect effects these tariffs could have, because we cannot absorb global overcapacity nor will we accept dumping on our market.”

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Europe needs a battle plan

By Wolfgang Munchau

So rather than co-ordinating our retaliation against the US along with those east Asian countries most seriously hit by the tariffs, such as China, South Korea, Japan, Taiwan, and Vietnam, we will probably go away and fight our own separate trade wars, allowing America to play us off against each other.

If, though, we were to co-operate and attempt to find an alternative to the US financial architecture, security guarantees or the dollar, that would be a genuine problem for Trump. But it’s doubtful that will happen. Instead, the EU finds itself in a position where it is fighting trade wars against two of its main trading partners: retaliating against the US — which will inevitably backfire — while also trying to stem Chinese imports.

The EU tariffs on China are, of course, quite different in intention, form, and content from the US ones. But the net effect is a worsening diplomatic relationship with China, and an irreconcilable trade balance. And, so, Europe finds itself between a rock and a hard place. China, and the other countries hit hard by these tariffs, are both necessary partners in organising a response, and a threat to European industry. Unless a degree of rebalancing is accepted — losing the trade battle to win the trade war — it’s hard to see a way out.