Forum newsletter: Trumponomics as the new leitmotif? / A popular climate policy / Re-live Berlin Summit 2025

Dear friends and colleagues, 

What is Donald Trump doing in terms of economic policy right now? From announcing tariffs on imports to then cutting taxes on a huge scale on those who have already been benefiting the most economically for years. It is just crazy arbitrariness or, in the end, the beginning of a new paradigm that a number of populists and authoritarians are about to implement across the globe? Perhaps neither.

The fact that Elon Musk now goes on to found his own party speaks against a reasonably coherent new guiding principle – clearly because the level of protectionism that is attractive to some Trump voters is more of a horror for an entrepreneur who wants to sell cars worldwide. Turns out, ‘America’ alone is not ‘great’ enough as a market. Conversely, it is also questionable whether lowering taxes on the very rich can be maintained as a new leitmotif – after a few decades in which the idea of trickle-down has simply not worked. Due to a lack of broad-based appeal, this could only be maintained in an authoritarian manner.

If there is anything that gives Trump’s actions logic or at least something like a common theme, it is the constant attempt to appear as the one in control of things, even if only on the surface – whether by holding up posters with tariffs on individual countries (or all of them); or by cutting taxes as in the Big Beautiful Bill. The problem is that both are good for appearances, but in the end do not make the majority of Americans better off – on the contrary.

If anything, what Trump is doing is therefore more an expression of the fact that there is (still) no convincing, attractive alternative to the failed market-liberal paradigm of recent decades – a policy that could help those in power as a new leitmotif to really solve the major challenges of our time and win people over: whether against climate change, inequality or globalisation crises. None of these problems will be solved by Trump’s policies, on the contrary.

There are few challenges where the lack of convincing concepts is more apparent than in climate policy, which for a long time and especially in Europe has relied on the guiding principle of simply making harmful things more expensive. Eric Lonergan explains why this doesn’t work in a short interview we conducted with him at the Berlin Summit. Together with Isabella Wedl, Eric presented the first draft of a paper at the Summit, co-authored with Michael Grubb, in which they explain why carbon pricing often doesn’t work – because it requires major investments in infrastructure to bring about change; or because it doesn’t help much to make the old more expensive if people can’t afford the new and have no affordable and practicable alternative. Keyword: electric cars.

The question then is what a more attractive climate policy should look like. According to the three, governments would have to focus much more systematically on creating the aforementioned conditions first – before the principle of carbon pricing applies. Depending on the sector, this could be at an earlier or later stage. In other words, a mix of measures is needed that focuses much more on people’s reality and psychology – and is less technocratic.

In recent years, Trump and others have benefited from the fact that, in the absence of a functioning leitmotif, the call for easy answers has intensified. The probability is quite high that the ‘wannabe strongmen’ will eventually disenchant themselves. The only equally high risk is that their lack of success will ultimately fail to resolve people’s discontent – and that only new populists will emerge who will then found the America Party like Musk. In the UK, the Brexiteers have been disenchanted – but the far right is now gaining new support.

*

You can read more about the climate session at the Berlin Summit in the summary and in interviews with  Eric Lonergan, Catherine Wolfram and Sebastian Dullien – here.

In interviews at the Summit, James K. Galbraith, Jo Swinson and Maja Göpel describe what a new economic paradigm could look like – more interviews here.

All other sessions can be found in the big overview – here.

Enough material for the summer – although it’s also good to think about something completely different. The next Forum newsletter will be published in mid-August.

Have a nice week,

Thomas Fricke and the Forum Team

This text is from our bi-weekly newsletter series. To subscribe, click here.