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ECPS Academy Summer School 2026 – Dr. Giulio Pugliese: The EU’s Policy Towards Asia Amidst Changing US–China Security and Trade Dynamics

As Europe deepens its engagement with the Indo-Pacific, the region has become far more than a distant theatre of economic opportunity—it has emerged as a central arena where geopolitical competition, technological innovation, supply-chain resilience, and strategic autonomy intersect. In this insightful lecture, Dr. Giulio Pugliese demonstrated how the Indo-Pacific evolved from a Japanese strategic narrative into a defining framework for understanding twenty-first-century international politics. Examining the growing rivalry between the United States and China, Taiwan’s geopolitical and technological significance, and the implications of Washington’s increasingly transactional alliance strategy, he argued that Europe must move beyond traditional regional perspectives and formulate a coherent Indo-Pacific policy rooted in its own interests. The lecture offered participants a nuanced understanding of how Europe’s future security and prosperity are becoming increasingly intertwined with developments across Asia.

Reported by ECPS Staff

The third day of the ECPS Academy Summer School 2026 continued its exploration of Europe’s changing geopolitical environment by shifting attention beyond the Atlantic theatre to the increasingly consequential dynamics unfolding across the Indo-Pacific. Held under the overarching theme, “Europe Between Oceans: The EU in the Age of Geoeconomics, Populism, and Strategic Competition,” the sessions examined how the European Union is recalibrating its external relations amid intensifying strategic competition between the United States and China. Following discussions on strategic autonomy, de-risking, and economic security, the sixth lecture broadened the analytical horizon by investigating Europe’s evolving engagement with Asia and the conceptual transformations that increasingly shape international politics. Against this backdrop, Dr. Giulio Pugliese, Director of the EU–Asia Project at the European University Institute and Associate Fellow at the Istituto Affari Internazionali and King’s College London, delivered a stimulating lecture entitled “The EU’s Policy Towards Asia Amidst Changing US–China Security and Trade Dynamics.” Combining insights from international relations, strategic studies, and Asian regional politics, the lecture challenged participants to rethink the Indo-Pacific not merely as a geographical designation but as a politically constructed strategic space whose emergence has profoundly influenced European foreign policy. <

The session was thoughtfully introduced by Anita Tusor, doctoral researcher at Charles University and Staff Officer at NATO’s Allied Command Transformation, who situated the discussion within one of the defining strategic dilemmas confronting contemporary Europe. She observed that the European Union increasingly finds itself navigating between its two most important economic partners—the United States and China—at a time when their rivalry is reshaping both global trade and international security. Rather than portraying the Indo-Pacific as a distant theatre of commercial interest, Tusor argued that recent geopolitical developments, particularly Russia’s full-scale invasion of Ukraine, have fundamentally altered European strategic thinking. The conflict has created direct linkages between the Euro-Atlantic and Indo-Pacific security theatres, compelling European policymakers to recognize that developments in East Asia now carry direct implications for Europe’s own security calculations. She further suggested that Europe’s growing interest in Japan’s experience of managing long-standing US–China tensions provides valuable opportunities for policy learning as Brussels seeks to navigate an increasingly polarized international environment. Her introduction effectively framed the lecture by emphasizing that Europe’s engagement with Asia is no longer peripheral but has become an integral component of its broader strategy for managing geopolitical competition. 

Reimagining the Indo-Pacific: Strategic Narratives and Europe’s Asian Turn

Dr. Giulio Pugliese.
Dr. Giulio Pugliese is Director of the EU–Asia Project at the European University Institute and Associate Fellow at the Istituto Affari Internazionali and King’s College London.

Connecting live from Taipei, Dr. Pugliese began by explaining that his primary objective was not simply to review recent European policy initiatives toward Asia but to unpack the intellectual foundations of one of the most widely used yet insufficiently examined concepts in contemporary international relations: the Indo-Pacific. While the term has rapidly entered the vocabulary of policymakers, diplomats, and scholars alike, he argued that it should not be understood as a politically neutral geographical label. Instead, it represents what strategic communication scholars describe as a strategic narrative—a carefully constructed story designed to simplify complex geopolitical realities, define particular challenges, identify preferred actors, and legitimize specific policy responses. Seen through this lens, the Indo-Pacific is not merely a map but a political project that reflects competing visions of regional order, international leadership, and global governance. Dr. Pugliese invited participants to appreciate that language itself constitutes an instrument of power, capable of shaping perceptions, legitimizing alliances, and influencing strategic behavior. 

At the heart of Dr. Pugliese’s analysis lay the argument that the Indo-Pacific concept originated not in Washington but in Tokyo. Drawing extensively upon his own research on Japanese foreign policy, he demonstrated that the contemporary understanding of the Indo-Pacific owes much to the strategic vision developed by the late Japanese Prime Minister Shinzo Abe and a relatively small circle of policymakers who sought to redefine Asia’s geopolitical architecture during the late 2000s and early 2010s. Their objective was to present an alternative regional order capable of responding to China’s expanding economic and strategic influence, particularly the growing prominence of the Belt and Road Initiative (BRI). By advancing the concept of a Free and Open Indo-Pacific (FOIP), Japan deliberately expanded the geographical imagination of Asia beyond a China-centered perspective. Rather than viewing Asia exclusively through East Asia and the Western Pacific, the Indo-Pacific connected the Pacific and Indian Oceans into a single strategic theatre stretching from East Africa to the western shores of the Americas, encompassing India, Australia, Southeast Asia, and maritime democracies across the region. In doing so, the concept challenged what Pugliese described as the increasingly Sinocentric geographical narrative embedded within Beijing’s own regional initiatives. 

Dr. Pugliese explained that each element of the FOIP formulation carried important political meaning. “Free” referred not only to democratic governance but also to the provision of alternatives to Chinese-led infrastructure financing and development initiatives. “Open” emphasized freedom of navigation, overflight, and the maintenance of open sea lanes that remain indispensable for international commerce. Collectively, the concept sought to portray the Indo-Pacific as a region characterized by openness, connectivity, transparency, and respect for international law, thereby implicitly contrasting it with perceptions of China’s expanding strategic influence. While acknowledging that such narratives inevitably simplify reality, Dr. Pugliese argued that their political effectiveness lies precisely in their capacity to mobilize coalitions of like-minded states around a shared strategic vision. The Indo-Pacific therefore functions simultaneously as a geographical concept, a diplomatic framework, and a normative narrative through which states articulate competing understandings of regional order. 

The lecture further traced the intellectual genealogy of this strategic narrative to earlier Japanese initiatives, including Abe’s conception of an “Arc of Freedom and Prosperity” and the revival of the Quadrilateral Security Dialogue (Quad) involving Japan, Australia, India, and the United States. Dr. Pugliese argued that these initiatives reflected a sustained Japanese effort to cultivate a network of maritime democracies capable of balancing China’s growing influence without necessarily resorting to overt containment. Behind these policy innovations stood a relatively small but highly influential group of Japanese officials and strategic thinkers who consistently sought to integrate economic policy, diplomacy, security cooperation, and strategic communication into a coherent foreign policy vision. Their efforts, he suggested, represented one of the most successful examples of middle-power agenda-setting in contemporary international relations, demonstrating that states need not possess overwhelming material capabilities to shape global strategic discourse. 

According to Dr. Pugliese, Japan’s most remarkable achievement was its ability to persuade the United States to adopt this conceptual framework during the first Trump administration. He described this as an exceptionally rare case in which a close ally effectively exported a foreign policy narrative to Washington rather than merely adapting to American strategic preferences. Following intensive diplomatic engagement, the United States officially embraced the Indo-Pacific concept in 2017, replacing the long-established Asia-Pacific terminology within its strategic vocabulary. The subsequent declassification of the US Strategic Framework for the Indo-Pacific further illustrated how the concept had become integrated into American grand strategy, where it served not only to strengthen partnerships among regional democracies but also to provide an overarching framework for managing strategic competition with China. Dr. Pugliese emphasized that this represented far more than a semantic adjustment; it marked the institutionalization of a new geopolitical imagination that would subsequently influence the policies of numerous allies, including those within Europe. 

Thus, Dr. Pugliese had fundamentally reframed participants’ understanding of the Indo-Pacific. Rather than accepting it as a self-evident geographical reality, he demonstrated that the concept itself constitutes an important arena of strategic competition, reflecting broader struggles over regional leadership, international legitimacy, and the future architecture of global order. This conceptual foundation established the basis for the remainder of the lecture, which would examine how the intensifying rivalry between Washington and Beijing has increasingly drawn Europe into this evolving strategic landscape, compelling the European Union to rethink both its relations with Asia and its own geopolitical identity.

Europe’s Strategic Recalibration: From the Asia-Pacific to the Indo-Pacific

Indo-Pacific
Flags of the Quad countries—Japan, Australia, the United States, and India—alongside a chess king, symbolizing strategic competition and the Quad’s evolving role in balancing China’s growing influence in the Indo-Pacific. Illustration: Sameer Chogale / Dreamstime.

Having established that the Indo-Pacific is fundamentally a strategic narrative rather than a neutral geographical designation, Dr. Pugliese proceeded to examine how this conceptual innovation gradually reshaped the foreign policies of the world’s leading powers. His central argument was that strategic narratives matter not merely because they influence political discourse but because they can fundamentally alter the way governments define interests, identify partners, and formulate grand strategy. The Indo-Pacific, he argued, evolved from a Japanese diplomatic initiative into the dominant geopolitical framework guiding American policy toward Asia before eventually being embraced—albeit in modified form—by the European Union and several of its member states. Understanding this process, he suggested, is essential to explaining why Europe increasingly views developments in East Asia as directly relevant to its own security and prosperity. 

Dr. Pugliese argued that the decisive turning point came during the first Trump administration. While previous American administrations had pursued engagement with China alongside regional balancing, President Donald Trump’s first term marked a more explicit shift toward strategic competition. Rather than viewing China’s rise as an opportunity for deeper integration into the liberal international order, Washington increasingly came to regard Beijing as a systemic rival whose growing technological, economic, and military capabilities required active counterbalancing. The trade war initiated against China, restrictions on Chinese technology firms such as Huawei, and growing concern over supply-chain vulnerabilities all reflected a broader transformation in American strategic thinking. Crucially, however, Dr. Pugliese emphasized that the conceptual vocabulary through which this shift was articulated had largely originated in Tokyo. Japan’s success in persuading Washington to officially adopt the Indo-Pacific framework represented, in his view, one of the rare instances in modern diplomacy where a middle power successfully influenced the grand strategy of the world’s leading superpower. 

Particularly significant was Dr. Pugliese’s discussion of the United States Strategic Framework for the Indo-Pacific, a document declassified at the conclusion of the first Trump administration. Unlike carefully crafted public statements, this internal strategic document revealed with unusual candour the objectives underpinning Washington’s regional policy. It openly framed China as the principal strategic competitor and explicitly identified the promotion of a “Free and Open Indo-Pacific” as a means of strengthening alliances while countering Beijing’s expanding influence. Dr. Pugliese drew participants’ attention to the informational dimension of this strategy, noting that the Indo-Pacific narrative was designed not only to organize military and diplomatic cooperation but also to compete with China’s own strategic messaging surrounding the BRI. Strategic communication, public diplomacy, and the contest over international narratives thus emerged as integral components of contemporary great-power competition. 

This observation led Dr. Pugliese to one of the lecture’s broader conceptual contributions: the growing importance of information politics within international relations. Great-power competition today extends well beyond military deployments and economic sanctions to encompass competing stories about the international order itself. He pointed to narratives portraying China’s BRI as “debt-trap diplomacy” as examples of what he termed informational contestation. Such narratives sought to shape international perceptions by presenting Chinese infrastructure investment not as development assistance but as a mechanism for creating political dependency. Whether entirely accurate or not, these narratives significantly influenced public debates across Europe, North America, and Asia, reinforcing broader geopolitical efforts to limit China’s expanding influence. The Indo-Pacific, therefore, functions not simply as a strategic framework but also as a powerful communicative device through which competing powers seek to legitimize their preferred regional order. 

Against this backdrop, Dr. Pugliese turned to the question of why Europe gradually embraced the Indo-Pacific concept despite its initial reluctance. He recalled that, during its early years, the term carried uncomfortable political connotations within many European capitals because it appeared closely associated with American efforts to contain China. For governments seeking to preserve productive economic relations with Beijing, openly endorsing a framework perceived as anti-Chinese seemed diplomatically unwise. Consequently, European policymakers initially preferred the more familiar Asia-Pacific terminology and avoided language that could be interpreted as aligning Europe too closely with Washington’s increasingly confrontational posture.

Several developments, however, fundamentally altered European calculations. According to Dr. Pugliese, one important factor was the gradual deterioration of EU–China relations driven by persistent trade imbalances, concerns over market access, investment reciprocity, technology transfer, and broader disagreements regarding human rights and political governance. These tensions had already encouraged European institutions to adopt a more cautious approach toward Beijing before the outbreak of the COVID-19 pandemic further exposed vulnerabilities associated with dependence on global supply chains concentrated in China. The pandemic reinforced concerns regarding economic resilience, strategic dependencies, and the security implications of excessive reliance on external suppliers, thereby lending greater credibility to calls for diversification and de-risking. 

The most decisive catalyst, however, was Russia’s full-scale invasion of Ukraine in February 2022. Dr. Pugliese argued that the war fundamentally transformed European perceptions of China, not primarily because Beijing directly participated in the conflict but because of its increasingly close relationship with Moscow. Although China formally maintained neutrality, European policymakers became increasingly concerned by evidence suggesting that Beijing had provided Russia with critical dual-use technologies and economic support that helped sustain its war effort. From a realist perspective, Dr. Pugliese explained, such behaviour reflected China’s strategic interest in preventing the emergence of a weakened or pro-Western Russia that might leave China strategically isolated. Yet for many Europeans, China’s unwillingness to distance itself from Moscow significantly weakened confidence in the possibility of a stable strategic partnership.  

At the same time, Dr. Pugliese cautioned against interpreting Europe’s Indo-Pacific engagement exclusively through the lens of ideological confrontation with China. Instead, he proposed a more nuanced explanation rooted in strategic bargaining within the transatlantic alliance. Following Russia’s invasion, Europe became even more dependent upon the United States for military assistance, intelligence sharing, energy supplies, and broader security guarantees. This asymmetry inevitably strengthened Washington’s leverage over European foreign policy. In return for sustained American support in Ukraine, the United States increasingly expected its European allies to align more closely with broader American strategic priorities in Asia. Support for Japan, South Korea, Taiwan, the Philippines, and other regional partners thus became part of a wider process of transatlantic strategic coordination extending well beyond the European continent itself. Europe’s growing Indo-Pacific engagement should therefore be understood not only as a response to developments in Asia but also as an indirect consequence of the changing political economy of the transatlantic alliance. 

Yet Dr. Pugliese repeatedly emphasized that European alignment with the United States also reflected Europe’s own interests. Asia’s extraordinary economic dynamism provides compelling incentives for deeper European engagement irrespective of American preferences. The Indo-Pacific contains many of the world’s fastest-growing economies, leading centers of technological innovation, and increasingly important markets for advanced manufacturing and defense industries. European firms have substantial commercial interests in expanding cooperation with countries such as Japan, South Korea, India, and Taiwan, particularly in sectors related to semiconductors, green technologies, digital infrastructure, and advanced manufacturing. Consequently, Europe’s Indo-Pacific strategy cannot be reduced to alliance politics alone; it also reflects a broader recognition that the center of gravity of the global economy continues to shift toward Asia. 

Dr. Pugliese illustrated this economic dimension by highlighting Europe’s growing interest in securing access to high-end semiconductors produced by Taiwan’s globally significant manufacturing sector. The political signaling directed toward Taipei should therefore be understood not solely as an expression of democratic solidarity but also as part of a broader strategy aimed at attracting investment, diversifying technological supply chains, and supporting Europe’s twin digital and green transitions. The Indo-Pacific thus emerges simultaneously as a security theatre, a technological ecosystem, and a vital economic space whose importance transcends traditional geopolitical categories.

By the conclusion of this section, Dr. Pugliese had demonstrated that Europe’s embrace of the Indo-Pacific reflects the convergence of multiple structural forces: intensifying US–China rivalry, deteriorating EU–China relations, Russia’s invasion of Ukraine, changing transatlantic dynamics, and the growing economic significance of Asia itself. Rather than representing a sudden strategic pivot, Europe’s Indo-Pacific policy emerged as the cumulative product of shifting geopolitical realities that increasingly blur the boundaries between European and Asian security. The lecture therefore invited participants to reconsider the European Union not as a passive observer of Indo-Pacific developments but as an increasingly active participant in the evolving strategic architecture linking the Atlantic and Pacific worlds.

Taiwan, Economic Security, and the Geopolitics of Interdependence

The flags of Taiwan, the United States, and China.
The flags of Taiwan, the United States, and China displayed on semiconductor chips, symbolizing intensifying global competition over advanced chip production, technological leadership, and strategic supply chains. Illustration: Korn Vitthayanukarun / Dreamstime.

Building upon his analysis of Europe’s gradual embrace of the Indo-Pacific framework, Dr. Pugliese devoted the third section of his lecture to what he described as one of the most consequential developments in contemporary international politics: the growing strategic centrality of Taiwan. While public debate often portrays Taiwan primarily through the lens of cross-Strait tensions or democratic solidarity, Dr. Pugliese argued that the island has acquired a far broader geopolitical significance. Taiwan today occupies the intersection of military strategy, technological competition, global supply chains, and great-power rivalry, making it one of the principal theatres through which the evolving balance of power in the Indo-Pacific is increasingly contested. For the European Union, he suggested, Taiwan represents not merely a distant regional issue but an increasingly important component of its own economic security and technological resilience. 

Dr. Pugliese encouraged participants to move beyond simplified narratives that portray cross-Strait relations as an inevitable confrontation between democracy and authoritarianism. Instead, he situated recent developments within a longer historical trajectory. The election of Taiwan’s Democratic Progressive Party (DPP) government in 2016 marked an important turning point because the new administration rejected the political understandings that had underpinned earlier efforts to stabilize relations with Beijing. From the perspective of the Chinese Communist Party, this shift fundamentally altered the trajectory of cross-Strait relations by diminishing prospects for eventual peaceful reunification under previously accepted political formulas. Beijing consequently intensified diplomatic, economic, and military pressure designed to isolate Taiwan internationally while discouraging further movement toward a distinct Taiwanese political identity. Rather than interpreting these developments solely through ideological categories, Dr. Pugliese invited participants to recognize the complex interaction of historical memory, nationalism, domestic politics, and strategic calculation that continues to shape Chinese policy. 

The deterioration of cross-Strait relations coincided with a profound transformation in American grand strategy. As the first Trump administration adopted a more confrontational approach toward China, Taiwan assumed an increasingly important position within Washington’s broader strategy of balancing Chinese power. Dr. Pugliese argued that Taiwan gradually evolved into what he repeatedly described as a strategic chess piece within the wider architecture of US–China competition. This characterization did not diminish Taiwan’s own agency or democratic achievements; rather, it reflected the reality that major powers increasingly viewed the island through the prism of broader regional military calculations. Maintaining the status quo across the Taiwan Strait became essential not only because of Taiwan itself but because of its location within the broader maritime geography of East Asia and its implications for regional power projection. 

To explain this strategic importance, Dr. Pugliese introduced participants to the concept of the First Island Chain, a geographical arc extending from northern Japan through Okinawa and Taiwan to the Philippines and onward toward Southeast Asia. Far from representing a mere cartographic feature, this chain constitutes one of the most strategically significant maritime corridors in the contemporary international system. Control over—or access through—these waters shape naval mobility, intelligence gathering, anti-submarine warfare, and the broader military balance in the Western Pacific. Dr. Pugliese illustrated how the deployment of advanced surveillance systems, missile capabilities, radar installations, and underwater sensors throughout this maritime corridor has increasingly transformed the region into a densely monitored strategic environment. In this context, Taiwan occupies a uniquely sensitive position because any alteration to the status quo would fundamentally affect the operational environment of both China and the United States, as well as their regional allies. 

This strategic logic, he explained, has profoundly reshaped alliance structures throughout East Asia. The United States has pursued what contemporary defense planners describe as integrated deterrence, strengthening operational cooperation with Japan, the Philippines, Australia, and other regional partners while enhancing interoperability, logistical coordination, and joint contingency planning. Japan, in particular, has assumed a much more prominent role within this evolving security architecture, expanding defense cooperation with Washington and adapting its own military posture to the possibility of a Taiwan contingency. The Philippines has similarly increased cooperation by providing greater access to military facilities, while Australia has deepened its participation in regional security initiatives. According to Dr. Pugliese, these developments illustrate that Taiwan has become embedded within a much broader regional deterrence strategy extending well beyond the island itself. 

Yet Dr. Pugliese was equally careful to avoid reducing Taiwan’s significance to military considerations alone. One of the lecture’s central themes was the growing fusion of security and economics in contemporary international relations. Taiwan’s extraordinary technological capabilities—particularly its globally dominant semiconductor industry—have elevated the island from a regional security concern to a cornerstone of the global digital economy. Advanced semiconductor manufacturing has become indispensable for artificial intelligence, telecommunications, defense systems, electric vehicles, and countless other technologies underpinning modern industrial production. Consequently, disruptions to Taiwan’s manufacturing ecosystem would carry profound consequences far beyond East Asia, affecting supply chains, industrial production, and technological innovation across Europe and the wider international economy.

For Europe, these developments have acquired increasing policy relevance through the emerging concept of economic security. Dr. Pugliese explained that the European Union’s efforts to diversify supply chains and reduce strategic dependencies have naturally directed attention toward Taiwan’s semiconductor industry. European governments have actively sought to attract investment from leading Taiwanese firms, recognizing that securing access to advanced chip production has become essential for the continent’s digital transformation, industrial competitiveness, and technological sovereignty. Europe’s growing diplomatic engagement with Taiwan should therefore be understood not merely as an expression of support for democratic values but also as a pragmatic effort to strengthen resilience within strategically vital industrial sectors. 

This convergence of economic and security considerations extended beyond semiconductors to encompass defense industrial cooperation more broadly. Dr. Pugliese observed that both Europe and East Asia have experienced a dramatic expansion in defense expenditure following Russia’s invasion of Ukraine and the intensification of geopolitical competition. Rising military budgets have created new opportunities for collaboration in defense technologies, weapons systems, logistics, maintenance, and industrial production. European defense manufacturers increasingly view Indo-Pacific markets as important destinations for exports, co-development projects, and long-term industrial partnerships. At the same time, such cooperation contributes to reducing production costs and strengthening Europe’s own defense industrial base. Security cooperation, therefore, increasingly reflects not only strategic necessity but also significant commercial incentives. 

Throughout this discussion, Dr. Pugliese repeatedly cautioned against simplistic explanations of Europe’s growing engagement with Taiwan and the wider Indo-Pacific. While democratic values undoubtedly play an important role in shaping European discourse, he argued that material interests remain equally significant. Taiwan matters because it is democratic, but it also matters because it occupies a pivotal position within global technology supply chains, financial markets, and maritime trade routes. Likewise, Europe’s Indo-Pacific strategy reflects concern over regional stability, but it also reflects the continent’s own industrial ambitions, technological needs, and economic future. These multiple motivations coexist rather than compete, producing a more complex picture than narratives centered exclusively upon ideology or security.

An equally important contribution of the lecture lay in Dr. Pugliese’s application of the concept of the security dilemma to contemporary US–China relations. He suggested that many of the military deployments, alliance expansions, and deterrence measures currently unfolding across East Asia are driven by reciprocal perceptions of insecurity. Measures intended by one side to preserve stability may be interpreted by the other as preparations for confrontation, thereby generating self-reinforcing cycles of strategic competition. Taiwan, in this sense, is both an object of genuine political concern and a symbol of broader geopolitical rivalry. Understanding these action–reaction dynamics, Pugliese argued, is essential for avoiding overly deterministic interpretations of current tensions while appreciating the structural pressures confronting policymakers on all sides.

By the conclusion of this section, participants were presented with a nuanced portrait of Taiwan as far more than a regional flashpoint. Instead, the island emerged as a focal point where questions of technological leadership, economic resilience, alliance politics, military deterrence, and strategic communication converge. For Europe, Taiwan increasingly embodies the wider challenges of navigating an international environment in which economics and security have become inseparable. The European Union’s growing interest in the Indo-Pacific, therefore, cannot be understood solely as an extension of transatlantic solidarity or support for democratic partners. Rather, it reflects the recognition that Europe’s own prosperity, technological competitiveness, and strategic autonomy are becoming progressively intertwined with developments unfolding thousands of kilometers beyond its traditional neighborhood.

Transactional Alliances, Strategic Autonomy, and Europe’s Indo-Pacific Future

In the concluding section of his lecture, Dr. Pugliese turned to the question that ultimately linked every preceding discussion: how should the European Union position itself in an Indo-Pacific increasingly shaped not only by intensifying US–China competition but also by profound changes within the United States itself? While much of the strategic debate over the past decade has focused on China’s growing influence, Dr. Pugliese argued that Europe’s most immediate challenge now lies in responding to the transformation of American grand strategy under Donald Trump’s second administration. The issue confronting European policymakers, he suggested, is no longer simply how to manage China’s rise but how to navigate an international environment in which the reliability, priorities, and strategic commitments of the United States have themselves become less predictable. 

Dr. Pugliese observed that the second Trump administration has introduced a noticeably more transactional approach to international alliances than its predecessors. While the broader American national security establishment—including the Department of Defense, the State Department, and the defense-industrial sector—continues to regard strategic competition with China as the defining challenge of twenty-first-century international politics, the White House has increasingly emphasized burden-sharing, domestic priorities, and the reduction of costly foreign commitments. Rather than fundamentally abandoning America’s alliances, Washington has sought to redefine them according to a logic that requires allies to assume substantially greater responsibility for their own security. In this sense, Dr. Pugliese suggested, contemporary American strategy reflects not isolationism in the traditional sense, but a recalibration of alliance management designed to reduce American costs while preserving strategic influence. 

This changing approach has had profound implications for both Europe and East Asia. Throughout the lecture, Dr. Pugliese repeatedly emphasized that Washington now expects its allies to devote considerably larger shares of national resources to defense. European governments have been encouraged to expand military expenditure well beyond previous commitments, while similar expectations have been directed toward Japan, Taiwan, Australia, and other Indo-Pacific partners. Such demands are presented not merely as financial obligations but as evidence of political resolve and strategic credibility. In practical terms, this means that allies are increasingly expected to shoulder a greater proportion of deterrence, procurement, logistics, and operational planning, thereby allowing the United States to preserve flexibility while maintaining its broader strategic posture toward China. 

Dr. Pugliese also highlighted the important economic dimension underlying these developments. Rising defense expenditure is not simply a matter of military preparedness; it has become an increasingly significant component of industrial policy on both sides of the Atlantic. The expansion of defense production stimulates investment, creates manufacturing demand, and contributes to broader efforts at industrial revitalization. Referring to developments in Germany and elsewhere in Europe, Dr. Pugliese observed that defense procurement has increasingly been linked to debates surrounding reindustrialization, technological innovation, and economic competitiveness. Former civilian manufacturing facilities are gradually being adapted to defense production, while military industries have assumed renewed importance within national economic strategies. The security agenda, therefore, cannot be separated from wider questions concerning employment, industrial policy, and technological modernization. 

The lecture nevertheless cautioned against interpreting contemporary alliance politics exclusively through the lens of burden-sharing. Dr. Pugliese argued that Washington’s approach toward China has itself become increasingly complex. Although the strategic framework established during the first Trump administration continues to shape American policy, recent developments suggest a greater willingness on the part of the White House to pursue tactical accommodation with Beijing where domestic political or economic interests require it. He pointed to the temporary stabilization of US–China relations following the escalation of tariff disputes and China’s restrictions on exports of rare earth minerals as evidence that geopolitical rivalry increasingly coexists with selective negotiation and pragmatic compromise. Great-power competition, therefore, does not unfold as a linear process of confrontation but rather through continuous cycles of competition, bargaining, and limited cooperation. 

Rare earths emerged as a particularly revealing illustration of the changing character of economic statecraft. China’s restrictions on exports of strategically important minerals exposed the extent to which advanced industrial economies remain dependent upon Chinese production in sectors essential to digital technologies, renewable energy, and defense manufacturing. Dr. Pugliese noted that these measures affected not only civilian industries but also the American defense-industrial base itself, demonstrating that economic interdependence continues to constrain even the world’s most powerful states. The resulting negotiations between Washington and Beijing therefore reflected mutual vulnerabilities rather than unilateral leverage. For Europe, this episode underscored the urgency of diversifying critical supply chains while avoiding simplistic assumptions that complete economic disengagement from China remains either feasible or desirable. 

Turning once more to Taiwan, Dr. Pugliese argued that recent American policy illustrates the increasingly transactional character of alliance politics. While Washington has continued to announce substantial arms packages and reaffirm its interest in maintaining stability across the Taiwan Strait, implementation has often proven uneven. Delays in weapons deliveries, greater pressure on Taipei regarding trade and tariff issues, and adjustments to diplomatic engagement all suggest a more flexible approach shaped by immediate political considerations, including domestic electoral calculations. Nevertheless, Dr. Pugliese cautioned against interpreting these developments as evidence of strategic disengagement. Beneath the political rhetoric of the White House, the broader American national security apparatus continues to deepen military cooperation with Japan, Australia, the Philippines, and other regional partners. Defense planning, alliance coordination, and operational integration initiated during earlier administrations have largely continued, illustrating the considerable institutional continuity that often characterizes foreign policy despite changes in political leadership. 

One of the lecture’s most insightful observations concerned the coexistence of continuity and change within American strategy. Although presidential rhetoric may fluctuate considerably, longstanding institutional commitments frequently persist beneath the surface. Military exercises continue, defense partnerships expand, and strategic planning remains oriented toward balancing China’s growing capabilities. This distinction between political leadership and institutional strategy, Dr. Pugliese argued, is essential for understanding current international developments. It also cautions against interpreting individual diplomatic episodes in isolation from the deeper structural forces that continue to shape US–China competition.

Throughout this concluding discussion, Dr. Pugliese consistently returned to the position of the European Union. Europe, he argued, increasingly finds itself compelled to pursue a delicate balancing act. On one hand, the continent shares important strategic concerns with the United States regarding China’s growing military capabilities, technological ambitions, and economic influence. On the other hand, Europe possesses significant commercial interests in maintaining productive relations with Asian economies, including China itself. Simultaneously, the unpredictability associated with American foreign policy reinforces longstanding European aspirations for greater strategic autonomy. Rather than blindly aligning with either Washington or Beijing, the European Union must therefore cultivate the capacity to pursue its own interests while preserving constructive partnerships across the Indo-Pacific.

Importantly, Dr. Pugliese rejected simplistic narratives portraying Europe as either an unquestioning follower of American strategy or an independent geopolitical pole entirely detached from transatlantic cooperation. Instead, he depicted European policymaking as a process of continuous negotiation among competing priorities: maintaining alliance solidarity, preserving economic competitiveness, protecting critical technologies, strengthening defense capabilities, and avoiding unnecessary escalation with China. The Indo-Pacific strategy adopted by the European Union reflects precisely this balancing effort. Its deliberately inclusive language seeks to strengthen engagement with democratic partners while avoiding explicit endorsement of comprehensive containment strategies. Europe, in other words, is gradually seeking to develop a distinct Indo-Pacific identity that remains compatible with transatlantic cooperation without being wholly defined by it.

As the lecture drew to a close, Dr. Pugliese emphasized that understanding Europe’s evolving role in Asia requires abandoning narrow regional perspectives. The Indo-Pacific and the Euro-Atlantic can no longer be treated as separate strategic theatres. Russia’s invasion of Ukraine, China’s growing global influence, technological competition, supply-chain vulnerabilities, and alliance politics have created an increasingly interconnected geopolitical landscape in which developments in one region inevitably reverberate across the other. Europe’s future prosperity, security, and strategic autonomy will therefore depend upon its ability to engage effectively with both theatres simultaneously.

Taken as a whole, Dr. Pugliese’s lecture provided participants with a remarkably nuanced framework for understanding the European Union’s evolving engagement with Asia. Rather than presenting the Indo-Pacific as merely the latest geopolitical slogan, he demonstrated how strategic narratives, alliance politics, economic interdependence, technological competition, and shifting global power structures have become deeply intertwined. By tracing the intellectual origins of the Indo-Pacific concept, examining the evolution of US–China rivalry, analyzing Taiwan’s strategic significance, and exploring the implications of America’s increasingly transactional alliance policy, the lecture illuminated the profound transformation currently underway in international politics. Most importantly, it underscored that Europe’s future “between oceans” will not be determined solely by the choices of Washington or Beijing but by its own ability to formulate a coherent, strategically autonomous, and globally engaged vision capable of navigating an increasingly contested international order.

The iconic euro (€) sculpture.

ECPS Academy Summer School 2026 – Assoc. Prof. Reuben Wong: Strategic Autonomy, De-risking, and EU Economic Security Tools

The European Union’s pursuit of strategic autonomy has emerged as one of the defining geopolitical debates of the twenty-first century, reflecting the growing convergence of security, economics, technology, and global power competition. In this intellectually stimulating lecture, Associate Professor Reuben Wong examined how Europe’s search for greater strategic independence has been reshaped by an increasingly volatile international environment marked by intensifying US–China rivalry, Russia’s revisionism, and rapid technological transformation. Challenging conventional assumptions about Europe’s transatlantic relationship and its approach toward China, he argued that strategic autonomy requires not only stronger defense and economic security instruments but also a fundamental reassessment of Europe’s place within an emerging multipolar order. The lecture offered participants a provocative and nuanced framework for understanding the future of European geopolitics.

Reported by ECPS Staff

The third day of the ECPS Academy Summer School 2026 marked a decisive transition from examining the political economy of international trade toward confronting the broader geopolitical forces reshaping Europe’s external relations. Convened under the overarching theme, “Europe Between Oceans: The EU in the Age of Geoeconomics, Populism, and Strategic Competition,” the programme explored how the European Union is increasingly compelled to navigate an international environment characterized not only by intensifying strategic rivalry between the United States and China but also by the erosion of long-standing assumptions about globalization, security, and the liberal international order. Against this backdrop, Associate Professor Reuben Wong of the National University of Singapore delivered a thought-provoking lecture entitled “Strategic Autonomy, De-risking, and EU Economic Security Tools,” inviting participants to reconsider Europe’s geopolitical position through an analytical lens that combined European integration studies with the strategic realities of contemporary international politics.

From the outset, Assoc. Prof. Wong made clear that his objective was not merely to catalogue the European Union’s emerging economic security instruments or explain the technical dimensions of de-risking. Rather, he sought to interrogate the underlying assumptions shaping European strategic thinking at a moment when the continent finds itself simultaneously confronting geopolitical uncertainty, technological transformation, and shifting distributions of global power. Drawing upon his long-standing scholarship on European foreign policy, as well as his experience observing both European and Asian strategic debates, Assoc. Prof. Wong encouraged participants to move beyond familiar policy slogans and instead examine the deeper questions surrounding Europe’s identity, capabilities, and long-term strategic interests.

One of the lecture’s distinguishing features was the perspective from which it was delivered. Speaking from Singapore—a country whose foreign policy has long depended upon balancing relations among competing major powers—Assoc. Prof. Wong approached debates over European strategic autonomy with a degree of analytical distance rarely encountered within discussions dominated by either Brussels or Washington. Rather than treating Europe’s geopolitical dilemmas as uniquely European, he situated them within a broader transformation of the international system, where established powers increasingly confront rising competitors, traditional alliances are being reassessed, and economic interdependence has itself become a source of strategic vulnerability. This external vantage point enriched the discussion by encouraging participants to question assumptions that often remain implicit within European policy circles.

Assoc. Prof. Wong also began by highlighting the conceptual ambiguity surrounding two of the most frequently invoked expressions in contemporary European policy discourse: strategic autonomy and de-risking. Although both terms have become central to debates on European foreign and economic policy, they often carry different meanings depending upon the context in which they are employed. Assoc. Prof. Wong observed that discussions of de-risking almost invariably evoke Europe’s increasingly complex relationship with China. The concept reflects growing concerns regarding excessive dependence on Chinese supply chains, critical raw materials, strategic technologies, intellectual property protection, and infrastructure deemed essential to European economic resilience. De-risking, therefore, does not necessarily imply economic decoupling from China but rather seeks to reduce strategic vulnerabilities while preserving mutually beneficial commercial relations.

By contrast, Assoc. Prof. Wong suggested that strategic autonomy has historically been associated less with China than with Europe’s relationship with the United States. At its core lies the question of whether the European Union possesses the political, military, and institutional capacity to pursue its own foreign policy independently of American strategic preferences. While the expression has acquired renewed prominence following Russia’s invasion of Ukraine and amid renewed uncertainty surrounding American global leadership, Assoc. Prof. Wong reminded participants that the debate itself stretches back to the end of the Cold War. Since the early 1990s, European leaders have repeatedly grappled with the challenge of transforming the Union from an economic giant into a credible geopolitical actor capable of defending both its interests and its values.

Rather than presenting these concepts as separate policy debates, Assoc. Prof. Wong argued that they should be understood as interconnected responses to a rapidly changing international environment. Strategic autonomy addresses Europe’s dependence on external security guarantees, while de-risking reflects growing awareness of economic dependencies that may equally constrain political decision-making. Together, they illustrate the European Union’s broader search for resilience in a world where geopolitical competition increasingly extends beyond military affairs to encompass trade, technology, investment, industrial policy, and digital infrastructure.

Throughout this opening section of the lecture, Assoc. Prof. Wong established the intellectual framework that would guide the remainder of his presentation: understanding Europe’s future requires examining not only the policies it adopts, but also the assumptions it holds about power, alliances, and the changing architecture of the international system. By placing strategic autonomy and economic security within this wider geopolitical context, he invited participants to reconsider whether Europe’s existing conceptual frameworks remain adequate for navigating an era defined by intensifying great-power competition and accelerating technological transformation.

The Long Search for Strategic Autonomy: From European Aspirations to Geopolitical Reality

Associate Professor Reuben Wong.
Associate Professor Reuben Wong is Deputy Head of the Political Science Department at the National University of Singapore.

Having established the conceptual foundations of strategic autonomy and de-risking, Assoc. Prof. Wong proceeded to examine the historical evolution of Europe’s quest for greater geopolitical independence. Rather than portraying strategic autonomy as a recent response to heightened tensions with China or the return of Donald Trump to the White House, he situated it within a much longer trajectory of European integration that has unfolded since the end of the Cold War. His historical reconstruction demonstrated that contemporary debates over European defense, foreign policy, and economic security are best understood not as abrupt policy innovations but as the latest chapter in a decades-long effort to reconcile Europe’s political ambitions with its enduring strategic dependencies.

At the center of Assoc. Prof. Wong’s discussion stood a deceptively simple definition of strategic autonomy: the ability of a state—or, in the European Union’s unique case, a union of sovereign states—to pursue its preferred foreign policy and defend its interests without excessive dependence on external powers. Although straightforward in formulation, Assoc. Prof. Wong argued that this definition immediately exposes one of the European Union’s most enduring dilemmas. Unlike conventional nation-states, the EU has long aspired to exercise geopolitical influence while lacking many of the instruments traditionally associated with great-power status, particularly unified military capabilities and a fully integrated foreign policy apparatus. Consequently, strategic autonomy has remained as much an aspiration as an accomplished reality.

This ambition has shaped European foreign policy thinking since the early 1990s, when the collapse of the bipolar international order appeared to create new opportunities for Europe to emerge as an independent strategic actor. The establishment of the Common Foreign and Security Policy (CFSP) represented one of the most ambitious manifestations of this aspiration. By seeking to coordinate foreign policy among member states, the EU hoped to complement its growing economic integration with greater diplomatic coherence and international influence. Yet, as Assoc. Prof. Wong reminded participants, translating institutional innovation into effective geopolitical action proved considerably more difficult than its architects had anticipated.

To illustrate this challenge, Assoc. Prof. Wong revisited one of the defining moments in post-Cold War European diplomacy: the violent disintegration of Yugoslavia. At the outset of the crisis, European leaders famously declared that the conflict represented “the hour of Europe,” signaling their confidence that the continent possessed both the responsibility and the capability to resolve security crises in its own neighborhood. Events quickly exposed the limitations of that ambition. As the conflicts escalated into prolonged warfare, ethnic cleansing, and genocide, European diplomatic initiatives failed to prevent violence, while decisive military intervention ultimately depended upon the United States and NATO. For Assoc. Prof. Wong, the Yugoslav wars became an enduring reminder that Europe’s geopolitical aspirations remained constrained by its continued reliance on American military power.

This lesson profoundly shaped subsequent debates over European defense integration. Assoc. Prof. Wong devoted particular attention to the 1998 Saint-Malo Declaration, jointly issued by British Prime Minister Tony Blair and French President Jacques Chirac, which called for the European Union to develop autonomous military capabilities capable of responding to regional crises. Although frequently celebrated as a milestone in the evolution of European security policy, Assoc. Prof. Wong argued that the declaration also revealed fundamental differences regarding the meaning of strategic autonomy itself.

France, he explained, traditionally viewed strategic autonomy through the lens of genuine strategic independence. Rooted in Gaullist thinking and reinforced by decades of skepticism toward excessive reliance on Washington, successive French governments argued that Europe should possess independent military capabilities, autonomous command structures, and the political freedom to undertake operations without depending upon NATO. Strategic autonomy, from this perspective, required Europe to become a fully-fledged geopolitical actor capable of acting on its own behalf.

Britain’s interpretation differed significantly. While London supported stronger European defense cooperation, it remained firmly committed to preserving NATO as the cornerstone of European security. British policymakers generally understood strategic autonomy not as an alternative to the Atlantic Alliance but as a complementary mechanism that would enable European states to contribute more effectively to collective defense without duplicating NATO structures. As Assoc. Prof. Wong noted, this more Atlanticist understanding was shared by many other European governments, particularly those in Northern and Central Europe, which regarded American security guarantees as indispensable to continental stability.

These competing interpretations, Assoc. Prof. Wong argued, help explain why European defense integration has repeatedly advanced in incremental rather than transformative ways. Although successive crises—including the Arab Spring, Russia’s intervention in Georgia, the annexation of Crimea, and ultimately Russia’s full-scale invasion of Ukraine—have reinforced calls for greater European strategic capacity, member states have continued to differ over the extent to which strategic autonomy should supplement or gradually replace dependence on the United States.

Drawing upon his own experience as a diplomat and scholar observing European capitals, Assoc. Prof. Wong enriched this historical analysis with comparative reflections on how different countries interpreted the post-Cold War strategic environment. He recalled that policymakers in Paris were already contemplating a future in which American reliability could no longer be taken for granted, prompting early efforts to strengthen European defense capabilities. By contrast, officials in London, Bonn, and many other European capitals struggled to imagine a European security architecture detached from American leadership. These contrasting strategic cultures, he suggested, continue to shape debates over European defense to this day.

The return of Donald Trump to the White House has injected renewed urgency into these long-standing discussions. While strategic autonomy had often been treated as an ambitious long-term objective, changing transatlantic dynamics have increasingly transformed it into what many European leaders now perceive as an immediate strategic necessity. Yet Assoc. Prof. Wong cautioned against viewing contemporary developments solely through the lens of personalities or electoral cycles. The deeper issue, he argued, concerns whether Europe has sufficiently adapted to a changing international system in which alliances can no longer be assumed to be permanent or unconditional.

In one of the lecture’s most intellectually provocative moments, Assoc. Prof. Wong introduced a distinctly realist interpretation of contemporary international politics. Reflecting upon the evolution of European strategic thinking, he suggested that the European Union had spent much of the post-Cold War era operating under liberal assumptions regarding the durability of democratic solidarity and the permanence of the rules-based international order. Those assumptions, he argued, increasingly require reconsideration. States, including democratic allies, ultimately pursue their own interests, and alliances endure only so long as they continue to serve mutually beneficial strategic purposes. From this perspective, expecting the United States to indefinitely shoulder the burden of European security irrespective of its own changing priorities may represent less a realistic strategic assessment than an increasingly untenable political assumption.

By tracing the historical evolution of strategic autonomy through successive geopolitical crises, Assoc. Prof. Wong demonstrated that Europe’s present predicament is neither accidental nor entirely new. Rather, contemporary debates reflect the culmination of unresolved tensions that have accompanied European integration for more than three decades. The challenge facing the European Union today, therefore, is not simply to devise new policy instruments, but to determine whether it is finally prepared to align its strategic ambitions with the capabilities required to sustain genuine geopolitical autonomy.

Between Washington and Beijing: Reassessing Europe’s Strategic Environment

Photo: Dreamstime.

Having traced the historical evolution of strategic autonomy, Assoc. Prof. Wong shifted the discussion toward the rapidly changing international environment within which the European Union must now pursue that ambition. Rather than treating Europe’s security dilemmas as the product of a single crisis, he situated them within a broader transformation of global politics marked by shifting power balances, intensifying great-power competition, and the gradual erosion of assumptions that had underpinned the post-Cold War international order. Throughout this section of the lecture, Assoc. Prof. Wong argued that Europe’s strategic predicament cannot be understood solely through its relations with either Washington or Beijing; instead, it emerges from the increasingly complex triangular relationship among the European Union, the United States, and China.

Assoc. Prof. Wong began by observing that Europe finds itself confronting an unprecedented convergence of external pressures. Relations with Russia have deteriorated dramatically following Moscow’s invasion of Ukraine, fundamentally altering Europe’s security landscape. At the same time, the return of Donald Trump to the American presidency has reopened longstanding questions regarding the reliability of the transatlantic alliance, while relations with China have become increasingly complicated by disputes over trade imbalances, technological competition, industrial policy, human rights, and concerns over Beijing’s growing strategic partnership with Russia. Rather than confronting a single geopolitical rival, Europe now faces the far more demanding challenge of managing simultaneous tensions with multiple major powers whose interests increasingly intersect.

The lecture devoted particular attention to the implications of changing transatlantic relations. Assoc. Prof. Wong argued that the debate over European strategic autonomy has acquired renewed urgency not simply because of Russia’s military aggression but because uncertainty regarding American strategic commitments has become significantly more pronounced. Referring to the early months of Trump’s second presidency, he recalled disputes over tariffs, trade policy, and even Washington’s controversial rhetoric regarding Greenland. These developments, he suggested, reinforced concerns among European policymakers that the United States was becoming an increasingly unpredictable partner whose strategic priorities might diverge from those of its European allies.

Yet Assoc. Prof. Wong was careful to emphasize that such developments should not be interpreted merely as the consequence of one administration or one political leader. Instead, he invited participants to consider whether Europe has been too slow to recognize broader structural changes in international politics. Drawing upon a realist understanding of international relations, he argued that great powers do not maintain costly alliances indefinitely out of sentiment or historical loyalty alone. Rather, alliances endure because they continue to serve concrete strategic and material interests. From this perspective, the expectation that the United States will remain permanently committed to underwriting European security regardless of shifting geopolitical priorities may no longer represent a sustainable assumption.

This argument marked one of the lecture’s most provocative departures from conventional European policy discourse. Assoc. Prof. Wong suggested that, for much of the post-Cold War period, European strategic thinking had been shaped by liberal assumptions concerning democratic solidarity, institutional cooperation, and the durability of the rules-based international order. While these assumptions contributed significantly to European integration itself, he argued that they have become increasingly difficult to reconcile with contemporary geopolitical realities. The resurgence of great-power rivalry, growing economic nationalism, and renewed emphasis on national interest all point toward a more competitive international environment in which states, including democratic allies, increasingly prioritize their own strategic calculations.

It was within this broader realist framework that Assoc. Prof. Wong introduced what was arguably the lecture’s most controversial proposition. Contrary to prevailing narratives within many European political circles, he suggested that the United States, rather than China, has increasingly become the principal source of strategic uncertainty confronting Europe. Several years earlier, such an assessment might have appeared implausible. Yet Assoc. Prof. Wong argued that recent developments require a reassessment of long-held assumptions about the respective roles of Washington and Beijing within the international system.

To support this contention, Assoc. Prof. Wong contrasted the behavior of the two powers in relation to the international rules-based order. While acknowledging the numerous disagreements that continue to characterize relations between Europe and China, he nevertheless argued that Beijing has, in several important respects, sought to operate within existing international institutions and norms established after the Second World War. By contrast, he suggested that recent American policies have increasingly challenged many of the very principles that Washington itself had historically championed, including support for multilateral institutions, international trade regimes, and predictable alliance commitments. In Assoc. Prof. Wong’s assessment, the paradox of the current international order lies in the fact that the principal architect of the post-war liberal system now appears increasingly willing to revise or abandon elements of that system, while China often presents itself as a defender of institutional stability and economic globalization.

This interpretation naturally challenged participants to reconsider familiar geopolitical narratives. Assoc. Prof. Wong acknowledged that many European policymakers continue to view China primarily through the lenses of strategic competition, human rights concerns, and systemic rivalry. Nevertheless, he encouraged his audience to distinguish between legitimate concerns regarding China’s growing influence and broader assumptions that automatically portray Beijing as the principal disruptor of the international order. Historical experience, institutional inertia, and deeply embedded transatlantic political cultures, he suggested, have made it difficult for many Europeans to recognize the extent to which the geopolitical landscape has evolved.

At the same time, Assoc. Prof. Wong cautioned against reducing international politics to a simplistic binary competition between Washington and Beijing. Instead, he argued that Europe’s strategic interests require a far more nuanced understanding of both powers. China should neither be romanticized nor automatically treated as an adversary whose rise inevitably threatens European prosperity. Equally, the United States should not be assumed to remain an unchanging guarantor of European security simply because of decades of successful transatlantic cooperation. Strategic autonomy, therefore, demands that Europe develop the analytical capacity to evaluate both relationships on the basis of its own interests rather than inherited geopolitical assumptions.

The lecture also situated China’s rise within the longer trajectory of global power redistribution. Assoc. Prof. Wong argued that China should no longer be understood merely as an emerging power but rather as a fully-fledged superpower whose influence increasingly shapes international politics, global markets, technological innovation, and diplomatic agendas. Referring to recent high-level interactions between Washington and Beijing, he suggested that historians may ultimately identify the latest summit between the two governments as a symbolic moment in which the United States implicitly acknowledged China as a strategic peer. The absence of unequivocal American dominance in these negotiations reflected, in his view, a broader transition toward a more multipolar international system.

Within such a system, Europe can no longer rely upon geopolitical habits formed during the Cold War or the immediate post-Cold War decades. Instead, Assoc. Prof. Wong argued that the European Union must cultivate a more independent strategic identity grounded in realistic assessments of its own capabilities, interests, and external environment. This requires moving beyond reflexive alignments with either superpower while simultaneously preserving constructive relations with both. For Europe, the challenge is not to choose between Washington and Beijing, but to develop sufficient strategic confidence to cooperate, compete, and disagree with each according to its own long-term interests.

By the conclusion of this section, Assoc. Prof. Wong had fundamentally reframed the strategic autonomy debate. Rather than presenting it as a defensive response to external threats alone, he portrayed it as a process of intellectual and political maturation through which the European Union must redefine its place within an increasingly fragmented international order. Strategic autonomy, in this sense, is less about distancing Europe from particular partners than about equipping it with the capacity to navigate a world in which geopolitical certainty has become the exception rather than the rule.

Normative Power, Market Power, and Europe’s Technological Challenge

Photo: Maryna Kushnarova / Dreamstime.

Having examined Europe’s shifting geopolitical environment, Assoc. Prof. Wong turned to one of the lecture’s central analytical questions: whether the European Union still possesses the capacity to shape the international order through its traditional strengths. Rather than focusing exclusively on military capabilities or diplomatic influence, Assoc. Prof. Wong explored Europe’s changing position as a producer of international norms, regulatory standards, and market rules. In doing so, he revisited two of the most influential concepts in European Union scholarship—Normative Power Europeand Market Power Europe—before questioning whether the material foundations that once sustained these forms of influence remain sufficiently robust in an era of accelerating technological competition and shifting global economic power.

Assoc. Prof. Wong began by discussing the influential work of political scientist Ian Manners, whose concept of Normative Power Europe has long occupied a central place in debates on the European Union’s international role. Manners argued that the EU’s distinctive influence derives not primarily from military power but from its capacity to define what constitutes legitimate behavior in international politics. Through the promotion of democracy, human rights, rule of law, multilateralism, environmental protection, and good governance, the Union has sought to exercise influence by shaping norms rather than imposing coercion. This vision has become deeply embedded within both academic literature and European policymaking, reinforcing the idea that the EU represents a unique kind of international actor whose strength lies in persuasion rather than force.

While acknowledging the significance of this intellectual tradition, Assoc. Prof. Wong encouraged participants to distinguish between aspiration and empirical reality. The European Union undoubtedly seeks to project normative influence, he argued, but successful norm entrepreneurship requires willing audiences capable of accepting and internalizing those standards. In practice, the EU has proven most effective when engaging countries that aspire to join the Union or maintain exceptionally close institutional and economic ties with it. The accession process itself illustrates the remarkable power of European conditionality, whereby candidate states undertake extensive political, legal, and economic reforms in exchange for eventual membership. Beyond this sphere of attraction, however, Europe’s capacity to shape political norms becomes considerably more limited.

To illustrate this point, Assoc. Prof. Wong referred to states that possess sufficient political autonomy, demographic weight, or strategic leverage to resist European pressure. Russia represented the clearest example of a country unwilling to organize its domestic or foreign policy according to European expectations. Yet Assoc. Prof. Wong also cited Turkey, Iran, and other significant regional powers that, despite maintaining important economic relationships with the EU, have repeatedly demonstrated their willingness to reject European normative preferences when these conflict with domestic political priorities or broader strategic interests. Such examples, he argued, reveal that normative influence ultimately depends upon underlying distributions of political and economic power rather than normative appeal alone.

If Europe’s ability to export political values has become increasingly constrained, Assoc. Prof. Wong suggested that its more enduring source of influence has historically resided elsewhere. Here he introduced Chad Damro’s concept of Market Power Europe, which shifts attention from political ideals to economic scale. Unlike normative power, which rests upon persuasion and legitimacy, market power derives from the size, wealth, and regulatory sophistication of the European single market. As one of the world’s largest integrated economic areas, the EU has long possessed the ability to establish product standards, environmental regulations, competition rules, labor protections, and consumer safety requirements that multinational corporations frequently adopt worldwide. Access to the European market has thus encouraged firms and governments alike to conform to European regulatory frameworks, extending the Union’s influence well beyond its territorial borders.

For Assoc. Prof. Wong, however, even this formidable source of influence can no longer be taken for granted. Market power ultimately depends upon economic dynamism, technological leadership, and sustained commercial relevance. Here he painted a considerably more cautious picture of Europe’s future. While the European Union remains one of the world’s largest economies, its relative share of global trade has steadily declined over recent decades as emerging economies—particularly China and increasingly India—have assumed a larger role in global production, investment, and innovation. Whereas Europe once accounted for roughly a quarter of world trade, its share has gradually diminished, reflecting broader structural changes in the global economy.

This decline carries consequences extending well beyond trade statistics. Assoc. Prof. Wong argued that countries which dominate emerging industries also acquire disproportionate influence over the standards governing those industries. Historically, Europe’s industrial strength enabled it to shape international regulations across numerous sectors, from manufacturing and pharmaceuticals to environmental protection and consumer rights. Yet leadership in future technologies increasingly belongs elsewhere. As innovation shifts toward artificial intelligence, advanced semiconductors, electric vehicles, renewable energy systems, and digital infrastructure, regulatory influence will increasingly follow technological leadership rather than historical institutional prestige.

Artificial intelligence emerged as perhaps the most illustrative example of this transformation. Assoc. Prof. Wong observed that Europe possesses world-class universities, research institutions, and highly skilled scientific communities. Nevertheless, these strengths have not translated into globally dominant AI platforms capable of competing directly with American and Chinese technological giants. While companies such as OpenAI, Google, Anthropic, DeepSeek, Alibaba, Tencent, and Baidu increasingly shape the global AI ecosystem, Europe has yet to produce comparable commercial champions operating at similar scale. Consequently, Assoc. Prof. Wong argued, Europe risks finding itself in the position of regulating technologies whose fundamental architecture, commercial logic, and technical standards are being established elsewhere.

The discussion then broadened to encompass the wider technological transformation underway in China. Assoc. Prof. Wong challenged participants to reconsider widespread perceptions that continue to portray China primarily as a manufacturing economy dependent upon copying foreign technologies. Drawing upon personal experiences from his recent visits, he described a society that has rapidly become one of the world’s foremost laboratories of technological innovation. Cashless payment systems, integrated digital platforms, sophisticated logistics networks, and autonomous delivery technologies illustrated the extent to which China has advanced in areas where many developed economies still rely upon older infrastructures. These examples were not presented merely as anecdotes but as evidence of China’s growing capacity to shape future technological ecosystems.

Particularly striking was Assoc. Prof. Wong’s discussion of China’s digital economy. Recounting his surprise when physical cash and even international credit cards proved largely unusable during his visits, he highlighted how mobile payment platforms such as Alipay and WeChat Pay have fundamentally transformed everyday economic life. Likewise, China’s extensive deployment of automated logistics—including robotic delivery services in hotels and urban environments—served to illustrate the speed with which technological innovation has been integrated into ordinary commercial practice. Such developments, he argued, underscore the increasingly significant gap separating technological adoption in parts of Asia from prevailing assumptions still common in Europe.

These observations naturally fed into Assoc. Prof. Wong’s broader concern regarding Europe’s future competitiveness. If technological innovation increasingly determines not only economic prosperity but also the capacity to establish international standards, Europe faces a narrowing window within which it can preserve meaningful regulatory influence. Regulatory excellence alone cannot indefinitely compensate for declining industrial leadership. Without stronger innovation ecosystems and greater participation in frontier technologies, Europe’s capacity to shape global governance may gradually erode despite its sophisticated legal and institutional frameworks.

The lecture also encouraged participants to place China’s contemporary rise within a broader historical context. Assoc. Prof. Wong reminded his audience that Chinese strategic thinking continues to be profoundly shaped by the historical memory of the so-called Century of Humiliation, during which successive unequal treaties, foreign occupations, and imperial interventions severely constrained Chinese sovereignty. Although China escaped formal colonization in the manner experienced by many Asian and African societies, Assoc. Prof. Wong argued that nineteenth-century European and Japanese interventions nonetheless left enduring historical scars. The visible architectural legacies of foreign concessions in cities such as Shanghai continue to serve as reminders of a period during which external powers exercised extraordinary influence over Chinese territory and governance.

By invoking this historical perspective, Assoc. Prof. Wong sought neither to justify nor to excuse contemporary Chinese policies. Rather, he encouraged participants to appreciate how historical memory informs present-day strategic behavior. European concerns regarding China’s growing global influence are undoubtedly significant, he acknowledged, yet Chinese policymakers likewise interpret international politics through a historical narrative centered upon sovereignty, national rejuvenation, and the determination never again to experience external subordination. Understanding these competing historical narratives, Assoc. Prof. Wong suggested, constitutes an essential prerequisite for developing more sophisticated European engagement with China.

From De-risking to Strategic Partnership: Reimagining Europe’s Economic Security

Stacks of euro coins placed before the flag of the European Union.
Stacks of euro coins placed before the flag of the European Union, symbolizing the euro currency and European economic integration. Photo: Marian Vejcik / Dreamstime.

In the concluding section of his lecture, Assoc. Prof. Wong shifted from diagnosing Europe’s strategic predicament to exploring the policy choices available to the European Union as it seeks to strengthen its economic resilience in an increasingly contested geopolitical environment. Returning to the second concept introduced at the beginning of the session—de-risking—he examined how the EU’s emerging economic security agenda fits within the broader pursuit of strategic autonomy. Rather than viewing economic security solely through the lens of defensive measures against perceived external threats, Assoc. Prof. Wong argued that Europe’s long-term success will depend upon combining resilience with openness, regulation with innovation, and strategic caution with international cooperation.

Although he acknowledged that discussions surrounding de-risking are frequently associated with reducing Europe’s dependence on China, Assoc. Prof. Wong cautioned against equating de-risking with comprehensive economic decoupling. Such an approach, he implied, would neither be economically sustainable nor strategically desirable. Instead, he presented de-risking as an effort to identify and mitigate vulnerabilities in areas where excessive dependence on external suppliers could undermine Europe’s political autonomy or economic stability. Critical raw materials, advanced semiconductors, digital infrastructure, strategic technologies, and resilient supply chains have all become central components of this emerging economic security agenda. Yet, Assoc. Prof. Wong argued, the effectiveness of these policies ultimately depends upon whether they enhance Europe’s own competitiveness rather than merely restrict external actors.

The discussion naturally turned to the policy instruments increasingly available to the European Union. While Assoc. Prof. Wong did not provide an exhaustive catalogue of individual legislative measures, he emphasized that Europe has gradually assembled a more sophisticated economic security toolbox capable of responding to external coercion and strategic pressure. These instruments include mechanisms to scrutinize foreign investment, strengthen supply-chain resilience, regulate emerging technologies, protect critical infrastructure, and respond collectively to economic coercion by third countries. Such measures, he suggested, represent an important evolution in European policymaking, reflecting the growing recognition that economic interdependence can generate strategic vulnerabilities as well as mutual benefits.

A particularly revealing illustration of this evolving approach emerged from Assoc. Prof. Wong’s discussion of the tensions that followed the return of Donald Trump to the White House. Referring to disputes surrounding Greenland and the renewed threat of punitive tariffs against European partners, Assoc. Prof. Wong observed that these developments produced an unusually unified response from several EU member states. He highlighted the symbolic decision by a number of European governments to express support for Denmark following Washington’s increasingly assertive rhetoric regarding Greenland. Although these gestures carried limited immediate military significance, they nevertheless reflected an important political signal: European solidarity could no longer be assumed to operate only against external competitors traditionally perceived as strategic rivals. For perhaps the first time in NATO’s history, Assoc. Prof. Wong noted, several European governments found themselves collectively signaling resistance to political pressure originating from the United States itself.

This episode, he argued, underscored the growing relevance of Europe’s economic security instruments. Faced with the prospect of American tariffs and economic coercion, the European Union demonstrated its willingness to contemplate robust countermeasures capable of imposing significant economic costs in return. Assoc. Prof. Wong referred to the Union’s capacity to deploy powerful retaliatory trade instruments, observing that although such measures would inevitably entail substantial economic consequences for both sides, they nevertheless constitute an increasingly important source of European strategic leverage. Economic statecraft, in other words, has become an indispensable complement to traditional diplomacy within the EU’s broader pursuit of strategic autonomy.

Yet Assoc. Prof. Wong was equally careful to stress that Europe’s future cannot be secured through defensive instruments alone. Protection, regulation, and retaliatory capabilities may reduce vulnerability, but they cannot substitute for technological dynamism or sustained economic competitiveness. It was at this point that he introduced what emerged as one of the lecture’s most forward-looking themes: digital sovereignty. Rather than understanding digital sovereignty as an attempt to isolate Europe from global technological ecosystems, Assoc. Prof. Wong presented it as the capacity to shape the governance of technologies that increasingly underpin modern economies. Artificial intelligence, digital platforms, data governance, and algorithmic regulation have all become critical arenas in which geopolitical competition increasingly unfolds.

For Assoc. Prof. Wong, Europe continues to possess a valuable—albeit narrowing—opportunity to influence the regulatory architecture governing these emerging technologies. Although European firms have not produced global AI champions comparable to those found in the United States or China, the Union still retains considerable regulatory authority through the size and attractiveness of its internal market. By establishing clear standards concerning transparency, accountability, privacy, competition, and digital governance, Europe may continue to shape aspects of global technological development even where it no longer leads in technological innovation itself. However, Assoc. Prof. Wong repeatedly emphasized that this window of opportunity is unlikely to remain open indefinitely if Europe’s technological capabilities continue to lag behind those of its principal competitors.

This concern naturally led to one of the lecture’s most distinctive policy recommendations. Rather than seeking to insulate European markets from external technological leaders, Assoc. Prof. Wong advocated a more pragmatic strategy centered on selective international cooperation. In particular, he argued that Europe should deepen engagement with technologically advanced partners across Asia, including China, Japan, South Korea, and other innovation-driven economies. Such partnerships, he suggested, would enable Europe to participate more actively in emerging technological ecosystems while simultaneously strengthening its own competitiveness.

In advancing this argument, Assoc. Prof. Wong challenged approaches that rely primarily upon restrictive regulation or defensive protectionism. Attempting to legislate foreign technologies out of European markets, he argued, risks isolating Europe from the very innovations that are reshaping the global economy. Instead, Europe should seek opportunities for collaboration with market leaders, recognizing that technological leadership increasingly depends upon interconnected networks of research, investment, industrial production, and commercial cooperation rather than purely national capabilities.

To illustrate this point, Assoc. Prof. Wong referred to developments within the global electric vehicle industry. He observed that successful firms increasingly pursue partnerships across national boundaries rather than relying exclusively upon domestic production or political protection. As an example, he pointed to the willingness of companies such as Tesla to cooperate with leading Chinese electric vehicle manufacturers, demonstrating that commercial realities often encourage collaboration even amid broader geopolitical competition. Europe, he suggested, should draw lessons from such developments. Instead of viewing technological interdependence solely as a source of vulnerability, policymakers should also recognize its potential to accelerate innovation and strengthen long-term competitiveness.

Underlying this recommendation was Assoc. Prof. Wong’s broader conviction that Europe must cultivate a more confident understanding of its own strategic interests. Throughout the lecture, he consistently argued against framing international politics in rigid ideological or binary terms. Europe need not choose between unconditional alignment with Washington and comprehensive confrontation with Beijing. Nor should strategic autonomy be interpreted as strategic isolation. Rather, genuine autonomy requires the capacity to cooperate, compete, and disagree with multiple partners according to Europe’s own evolving interests and priorities.

As the lecture drew to a close, Assoc. Prof. Wong returned to the central theme that had connected each stage of his analysis: the European Union’s search for strategic autonomy in an era of profound geopolitical transformation. He suggested that this search cannot be reduced to military capability alone, nor can it be achieved solely through economic regulation or institutional reform. Strategic autonomy ultimately demands a broader intellectual shift in how Europe understands power itself. In a world where technological leadership, supply chains, innovation ecosystems, and digital infrastructure increasingly determine geopolitical influence, economic security has become inseparable from foreign policy and strategic decision-making.

The lecture concluded on a cautiously optimistic note. While Assoc. Prof. Wong openly acknowledged Europe’s relative decline in several domains—including demographic growth, technological innovation, and global market share—he rejected narratives of inevitable European marginalization. The Union continues to possess significant assets: one of the world’s largest integrated markets, highly developed regulatory institutions, advanced research capacities, and an enduring commitment to multilateral cooperation. Whether these strengths can be translated into sustained geopolitical influence, however, will depend upon Europe’s willingness to adapt to an international environment that increasingly rewards flexibility, innovation, and strategic pragmatism rather than reliance upon inherited assumptions.

Taken as a whole, Assoc. Prof. Wong’s lecture offered far more than an assessment of the European Union’s emerging economic security policies. It presented a comprehensive reflection on Europe’s place within a rapidly evolving international order, urging participants to reconsider established geopolitical narratives and to approach strategic autonomy not as a slogan but as an ongoing process of political, economic, and intellectual adaptation. By combining insights from European integration studies, international relations theory, and an Asian perspective on global power shifts, the lecture challenged participants to think beyond conventional dichotomies and to appreciate the complexity of Europe’s strategic choices in what is becoming an increasingly multipolar and geoeconomically contested world.

Conclusion

Associate Professor Reuben Wong’s lecture offered a sophisticated and timely examination of one of the European Union’s most pressing strategic dilemmas: how to preserve political autonomy, economic resilience, and regulatory influence amid an increasingly fragmented international order. Moving beyond conventional policy debates, he challenged participants to reconsider Europe’s assumptions about alliances, power, and globalization through a realist yet forward-looking analytical framework. 

By juxtaposing strategic autonomy with de-risking, normative influence with market power, and geopolitical competition with technological transformation, Assoc. Prof. Wong demonstrated that Europe’s future will depend not only on strengthening its economic security instruments but also on redefining its strategic identity in a rapidly evolving multipolar world. Perhaps the lecture’s greatest contribution lay in its distinctly Asian perspective, which encouraged participants to look beyond transatlantic paradigms and appreciate the profound shifts taking place in global power distribution. 

Ultimately, the session reinforced the Summer School’s central message that Europe’s future between the Atlantic and the Indo-Pacific will be determined not by choosing between competing great powers, but by developing the confidence, capabilities, and strategic vision necessary to engage an increasingly interconnected and contested world on its own terms.

Image: Paulus Rusyanto / Dreamstime.

ECPS Academy Summer School 2026 – Prof. Alasdair Young: Populism Trumped Transatlantic Trade Cooperation

Can the transatlantic trading order survive the rise of populism? In his lecture at the ECPS Academy Summer School 2026, “Europe Between Oceans: The EU in the Age of Geoeconomics, Populism, and Strategic Competition,” Professor Alasdair Young argues that Donald Trump’s second presidency marks a fundamental break with more than seventy years of EU–US trade cooperation. Moderated by Dr. Jessica Lawrence, the session explores how populist narratives, protectionism, geopolitical rivalry, and legal innovation are transforming the politics of international trade. Combining historical perspective with international political economy and trade law, Professor Young demonstrates that the future of transatlantic relations will depend not only on commercial negotiations but also on reconciling economic openness with democratic legitimacy, strategic autonomy, and global stability.

Reported by ECPS Staff

The transformation of transatlantic trade relations has become one of the defining features of the contemporary international political economy. For more than seven decades, the economic partnership between the European Union and the United States served as one of the principal pillars of the liberal international order, underpinning global trade liberalization, multilateral governance, and unprecedented levels of economic integration. Although the relationship periodically experienced disputes over agricultural regulation, industrial subsidies, market access, and monetary policy, these conflicts were generally managed within a shared commitment to rules-based cooperation and institutional compromise. Today, however, intensifying geopolitical rivalry, the resurgence of economic nationalism, the growing politicization of trade, and the rise of populist politics have fundamentally altered the assumptions that long sustained transatlantic economic cooperation. Understanding this transformation therefore requires moving beyond conventional analyses of tariffs and trade balances to examine the deeper political, institutional, and ideological forces reshaping the global trading system.

These questions lay at the heart of the ECPS Academy Summer School 2026, held under the theme “Europe Between Oceans: The EU in the Age of Geoeconomics, Populism, and Strategic Competition.” Bringing together leading scholars and participants from around the world, the programme explored how geopolitical competition, strategic autonomy, democratic polarization, and technological rivalry are redefining Europe’s external relations and the future of global governance. Within this broader intellectual framework, Professor Alasdair Young, Neal Family Chair at the Sam Nunn School of International Affairs at the Georgia Institute of Technology, delivered a historically grounded and theoretically sophisticated lecture entitled “Populism Trumped Transatlantic Trade Cooperation.” Drawing upon decades of research on European Union trade policy and international political economy, Professor Young argued that the second Trump administration represents not simply another period of transatlantic commercial tension but a fundamental break with the cooperative logic that has characterized EU–US trade relations since the creation of the post-war trading order. By situating recent tariff disputes within the longer evolution of the General Agreement on Tariffs and Trade (GATT), the World Trade Organization (WTO), and the broader history of transatlantic economic integration, he demonstrated that contemporary protectionism reflects a deeper transformation in the politics of international trade itself.

The session was expertly moderated by Dr. Jessica Lawrence, Senior Lecturer at the University of Essex School of Law, whose scholarship on international economic law, World Trade Organization governance, European Union internal market regulation, and the intersection of trade with broader public policy objectives provided an ideal intellectual point of departure for the discussion. Her introductory remarks effectively framed the lecture by emphasizing that recent developments—from the so-called “Liberation Day” tariffs and regulatory disputes to growing tensions over sustainability standards, digital governance, and industrial policy—should be understood not as isolated trade disagreements but as manifestations of broader geopolitical and institutional change. By encouraging participants to consider whether transatlantic trust has been fundamentally weakened, whether the WTO can continue to anchor the global trading system, and whether regional arrangements may increasingly displace multilateral governance, Dr. Lawrence situated Professor Young’s lecture squarely within the Summer School’s overarching exploration of geoeconomics, populism, and strategic competition.

Combining historical analysis, international political economy, trade law, and comparative politics, Professor Young challenged participants to rethink the relationship between populism and international commerce. He argued that Donald Trump’s protectionist agenda cannot be adequately explained through conventional accounts centered on sectoral interests or geopolitical competition alone. Instead, it reflects a distinctive populist conception of trade in which imports, trade deficits, and international economic interdependence are interpreted as evidence of exploitation by foreign actors enabled by domestic political elites. Equally significant was his analysis of the European Union’s response, which demonstrated that Europe’s acceptance of an asymmetrical trade agreement reflected not diplomatic weakness, but the complex strategic constraints imposed by wider security considerations, including NATO and the war in Ukraine. Offering a rich synthesis of historical perspective and contemporary policy analysis, the lecture provided participants with a compelling analytical framework for understanding how populism, protectionism, legal innovation, and geopolitical rivalry are collectively reshaping one of the world’s most consequential economic partnerships and, with it, the future of the liberal international economic order.

The Transatlantic Economy: A Relationship Built on Deep Integration Rather Than Simple Trade

Professor Alasdair Young.
Professor Alasdair Young is Neal Family Chair at the Sam Nunn School of International Affairs at the Georgia Institute of Technology.

Professor Young began his lecture by challenging one of the most common misconceptions surrounding EU–US economic relations: that the relationship can be adequately understood through bilateral trade balances alone. Public debate, particularly under Donald Trump’s second administration, has become heavily dominated by discussions of merchandise trade deficits, tariff levels, and market access. While these indicators undoubtedly matter politically, Professor Young argued that they provide only a partial—and often misleading—picture of the transatlantic economy. To appreciate the significance of recent policy changes, it is first necessary to understand the extraordinary depth and complexity of economic integration that has developed across the Atlantic since the end of the Second World War. 

Presenting a series of comparative economic indicators, Professor Young demonstrated that the transatlantic economy remains unparalleled in both scale and intensity. Together, the European Union and the United States account for roughly one-third of global gross domestic product and a similar proportion of world imports, while also representing approximately one-quarter of global exports. Yet these aggregate trade figures reveal only part of the relationship. The defining characteristic of transatlantic economic integration, he argued, is not merchandise trade but investment. Cross-Atlantic foreign direct investment (FDI) constitutes the largest bilateral investment relationship anywhere in the world, creating dense networks of production, ownership, finance, research, and innovation that extend far beyond conventional trade statistics. 

Professor Young therefore encouraged participants to reconceptualize the Atlantic economy as an integrated production system rather than merely a trading relationship. American companies operating within Europe generate enormous sales through their European subsidiaries, while European firms maintain similarly extensive operations throughout the United States. Consequently, many goods and services exchanged across the Atlantic are produced within multinational corporate structures whose operations transcend national boundaries. This level of economic interdependence means that political decisions affecting trade frequently influence investment, employment, production networks, and technological cooperation simultaneously.

Beyond the Trade Deficit: Understanding the Real Structure of EU–US Economic Relations

One of Professor Young’s central analytical interventions concerned the political misuse of bilateral trade statistics. Throughout Donald Trump’s political career, trade deficits—particularly deficits in manufactured goods—have occupied a central place in his criticism of international trade. According to Professor Young, however, this emphasis ignores essential dimensions of the transatlantic economy.

The Trump administration’s narrative focuses almost exclusively on the American merchandise trade deficit with the European Union. Yet Professor Young demonstrated that this perspective neglects two equally important realities. First, the United States enjoys a substantial trade surplus in services, reflecting American comparative advantages in finance, technology, digital services, consulting, education, and intellectual property. Second, and even more importantly, American multinational corporations generate significantly higher commercial sales through their European affiliates than European firms achieve through comparable operations in the United States. When investment-related economic activity is incorporated alongside conventional trade flows, the transatlantic relationship appears considerably more balanced than merchandise trade statistics alone would suggest. 

This distinction carries significant political implications. Populist narratives frequently portray trade as a zero-sum competition in which one country necessarily benefits at another’s expense. Professor Young argued that the transatlantic economy instead illustrates the opposite principle: sustained investment integration creates mutual dependence and shared prosperity that cannot be captured through simple import-export calculations. Policies designed exclusively to reduce merchandise trade deficits therefore risk disrupting broader economic relationships that generate substantial benefits for both partners.

Equally significant was Professor Young’s observation that more than half of all transatlantic trade in goods occurs within multinational corporations themselves. Parent companies and subsidiaries routinely exchange components, intermediate goods, technologies, and specialized services across national borders as part of integrated production processes. Even transactions occurring formally between separate firms frequently take place within long-established supply chains characterized by stable contractual relationships rather than anonymous market exchanges. Consequently, imports often function not as substitutes for domestic production but as indispensable complements to it. Restricting such trade through tariffs may therefore increase production costs for domestic firms rather than protecting them from foreign competition.

From Cooperation to Conflict: The Historical Evolution of Transatlantic Trade Relations

Having established the exceptional nature of the transatlantic economy, Professor Young turned to its historical evolution, emphasizing that economic interdependence has historically been accompanied by extensive institutional cooperation. While disagreements have periodically emerged, they rarely displaced the broader commitment to multilateral governance that characterized EU–US relations for most of the post-war era. Understanding today’s tensions therefore requires distinguishing between recurring commercial disputes and the more fundamental transformation currently underway. 

The earliest major disruption occurred during the Nixon Shock of 1971, when President Richard Nixon suspended the convertibility of the US dollar into gold, effectively bringing the Bretton Woods monetary system to an end. Simultaneously, the administration imposed a temporary ten-percent surcharge on imports as leverage to encourage trading partners to revalue their currencies. Professor Young emphasized that although these measures represented a dramatic departure from previous American policy, they remained explicitly temporary. Once negotiations concluded successfully through the Smithsonian Agreement, the additional tariffs were promptly removed. The episode therefore illustrates an important historical pattern: earlier trade conflicts sought to resolve specific macroeconomic problems without fundamentally challenging the legitimacy of multilateral cooperation itself. 

A second period of tension emerged during the 1980s, when the United States increasingly adopted what became known as “aggressive unilateralism.” Rather than relying exclusively upon multilateral negotiations, successive American administrations identified what they regarded as unfair foreign trade barriers and threatened unilateral retaliation to secure market access. While controversial, these policies nevertheless remained focused on particular commercial disputes rather than rejecting the broader institutional framework governing international trade.

Institutionalizing Trade Disputes: The WTO Era

The World Trade Organization (WTO) headquarters in Geneva, Switzerland—the only international organization responsible for setting and overseeing the rules governing trade between countries. Photo: Hector Christiaen.

Professor Young argued that the establishment of the World Trade Organization (WTO) in 1995 fundamentally transformed the management of transatlantic trade tensions. Under the WTO’s institutional framework, disputes increasingly became subject to formal legal procedures rather than unilateral political bargaining. This institutionalization helped contain conflicts while preserving the broader cooperative relationship between the European Union and the United States. 

Several disputes discussed during the lecture illustrate this pattern. Long-running disagreements over hormone-treated beef and genetically modified organisms (GMOs) reflected American objections to European regulatory standards that restricted access for US agricultural exports. Although politically contentious, these cases remained confined to specific sectors and were ultimately addressed through established WTO dispute-settlement procedures.

Similarly, the prolonged conflict between Boeing and Airbus over alleged government subsidies generated years of litigation without fundamentally destabilizing transatlantic economic cooperation. Each side accused the other of unfairly supporting its domestic aircraft manufacturer, yet both accepted the legitimacy of resolving the dispute through multilateral legal mechanisms rather than abandoning the institutional framework altogether.

Professor Young also recalled the American safeguard tariffs on steel imports introduced during the early 2000s, which prompted measured European retaliation. Once again, despite political tensions, the dispute remained limited in scope and duration. Such episodes demonstrated the resilience of transatlantic cooperation precisely because both parties continued to recognize the authority of common international rules.

Cooperation as the Defining Characteristic of the Atlantic Partnership

Against this historical background, Professor Young advanced one of the lecture’s central arguments: although individual disputes frequently attracted media attention, they represented exceptions rather than the defining characteristic of EU–US trade relations. Throughout the post-war period, cooperation overwhelmingly outweighed conflict. He illustrated this point by tracing the joint leadership exercised by Europe and the United States in constructing the post-war trading system itself. The General Agreement on Tariffs and Trade (GATT) emerged largely from Anglo-American cooperation, while the subsequent creation of the World Trade Organization likewise depended heavily upon sustained collaboration between Washington and Brussels. Rather than competing institutional visions, Europe and the United States shared a common commitment to progressively liberalizing international trade through mutually agreed multilateral rules. 

Even beyond formal multilateral negotiations, successive initiatives sought to deepen bilateral cooperation. Following the end of the Cold War, the New Transatlantic Agenda and related initiatives attempted to strengthen regulatory coordination and reduce unnecessary barriers to commerce. Although many of these efforts achieved only modest practical success, they reflected an enduring political commitment to managing differences cooperatively.

Professor Young highlighted data privacy as one of the most notable examples of successful regulatory accommodation. European data-protection legislation imposed strict conditions governing transfers of personal information outside the European Union, while American national security legislation following the September 11 attacks required extensive intelligence access to private data. Rather than allowing these competing legal frameworks to disrupt broader economic relations, both sides repeatedly negotiated compromise arrangements that sought to reconcile European privacy protections with American security requirements. Although challenged before European courts on several occasions, these agreements demonstrated a continuing willingness to preserve cooperation even under difficult legal circumstances.

The Promise and Failure of TTIP

Professor Young concluded this historical overview by examining the Transatlantic Trade and Investment Partnership (TTIP) negotiations, which represented the most ambitious attempt to deepen transatlantic economic integration in recent decades. Contrary to many public perceptions, TTIP did not seek sweeping regulatory harmonization. Instead, negotiations focused primarily on eliminating remaining industrial tariffs, liberalizing selected service sectors, improving public procurement access, and reducing unnecessary regulatory duplication through mutual recognition where appropriate. 

Nevertheless, TTIP ultimately failed—not because of Donald Trump’s election alone but because political resistance had already emerged on both sides of the Atlantic. Within Europe, widespread public protests reflected fears that the agreement might weaken environmental, consumer, and food safety standards. In the United States, meanwhile, domestic regulatory agencies proved reluctant to accept European standards as functionally equivalent, while individual states resisted commitments concerning public procurement. Professor Young therefore emphasized that TTIP was already experiencing significant political difficulties before Trump’s first administration formally abandoned the negotiations.

Yet, despite TTIP’s failure, Professor Young argued that its broader significance lies elsewhere. Even unsuccessful negotiations reflected a continuing commitment to expanding transatlantic cooperation through negotiated institutional mechanisms. It is precisely this cooperative tradition, rather than any individual agreement, that distinguishes the historical transatlantic relationship from the confrontational and unilateral approach that has emerged under Donald Trump’s second presidency.

The Second Trump Administration: A Fundamental Departure from Post-War Trade Policy

Donald Trump.
Donald Trump’s first presidential campaign rally at the Phoenix Convention Center, where thousands gathered to hear him speak as protesters demonstrated outside. Photo: Danny Raustadt.

Having situated contemporary developments within the broader historical evolution of transatlantic economic cooperation, Professor Young turned to the central argument of his lecture: the trade policy pursued during Donald Trump’s second presidency represents not merely another episode of protectionism but a profound departure from the principles that have guided American trade policy since the Second World War. While previous disputes had largely concerned specific sectors, regulatory disagreements, or temporary macroeconomic adjustments, the current administration has challenged the very logic of post-war trade liberalization. According to Professor Young, this transformation cannot be adequately explained through traditional political economy models emphasizing industrial lobbying, sectoral interests, or changes in the structure of the American economy. Instead, it reflects the distinctive political worldview of Donald Trump himself and the growing influence of populist narratives within American trade politics. 

To illustrate this shift, Professor Young presented evidence showing the dramatic increase in American tariff levels during 2025. Although subsequent negotiations and exemptions moderated some of the initially announced tariff rates, the broader trend remained unmistakable. For the first time in decades, the United States had reversed the long historical trajectory toward progressively lower trade barriers that had characterized American policy since before the Second World War. Importantly, Professor Young emphasized that this reversal occurred without any comparable structural transformation within the American economy itself. There had been no sudden collapse of industrial competitiveness, no dramatic surge in demands for protection from domestic manufacturers, nor any major economic shock capable of explaining such a radical policy change through conventional economic reasoning. The explanation therefore lay elsewhere—in politics rather than economics.

Populism and Trump’s Understanding of International Trade

Professor Young argued that understanding Trump’s trade policy requires appreciating how he conceptualizes international commerce. Unlike earlier administrations, which typically focused on removing specific foreign trade barriers or expanding export opportunities for American firms, Trump’s approach is characterized by a far broader skepticism toward trade itself. Throughout his political career, extending back to the 1980s, Trump has consistently portrayed international trade as inherently disadvantageous to the United States. His concern is directed less toward individual regulatory disputes than toward imports generally, particularly manufactured imports that contribute to the American merchandise trade deficit. 

Professor Young described this perspective as fundamentally populist. Within Trump’s narrative, trade deficits are not the product of complex patterns of comparative advantage, global production networks, or consumer preferences. Rather, they are presented as evidence that foreign governments—assisted by corrupt domestic political elites—have systematically exploited ordinary American workers. This interpretation transforms international trade from a mutually beneficial economic exchange into a moral struggle between “the people” and a coalition of foreign competitors and domestic elites.

The lecture explored several possible explanations for Trump’s enduring commitment to protectionism. Professor Young noted that Trump’s hostility toward trade predates his entry into electoral politics by several decades, suggesting that it reflects deeply held personal convictions rather than short-term political calculation. He referred to the work of political scientist Diana Mutz, whose concept of the “drawbridge-up worldview” offers one possible interpretation. According to this perspective, individuals who perceive the outside world primarily as a source of threat are naturally inclined to oppose immigration, globalization, and international trade alike. Such a worldview provides a coherent psychological foundation for Trump’s consistent preference for tariffs and economic nationalism. 

Professor Young also discussed alternative scholarly interpretations. Some analysts, including Stacie Goddard and Abraham Newman, have argued that Trump’s trade policy reflects a form of neo-royalism, whereby tariffs serve principally to enhance presidential discretion by allowing the executive selectively to reward allies and punish opponents. While acknowledging that tariff authority undoubtedly strengthens presidential power, Professor Young questioned whether neo-royalism adequately explains Trump’s motivations. In his assessment, Trump’s long-standing commitment to tariffs predates the acquisition of executive authority itself. The concentration of political power resulting from tariff policy is therefore better understood as a consequence rather than the original objective of his protectionist agenda.

Geopolitics or Protectionism? Reassessing Trump’s Tariff Strategy

Another important theme addressed during the lecture concerned the relationship between trade policy and geopolitics. Many contemporary observers interpret Trump’s tariffs primarily as instruments of strategic coercion designed to advance broader foreign-policy objectives. Professor Young challenged this interpretation by distinguishing between exceptional geopolitical cases and the administration’s broader trade strategy.

He acknowledged that tariffs had occasionally been employed to exert diplomatic pressure—for example, threatening Colombia over the acceptance of deported migrants or Brazil concerning judicial proceedings involving former President Jair Bolsonaro. Yet these cases remained relatively limited and, in several instances, the threatened tariffs were either quickly withdrawn or never implemented. Similarly, despite political disagreements with European governments over issues such as Greenland, defence cooperation, or support for Ukraine, the administration generally refrained from imposing the sweeping punitive tariffs that many observers anticipated. 

For Professor Young, these examples demonstrate that geopolitics alone cannot explain the administration’s overall trade policy. Rather than using tariffs primarily as instruments of foreign policy, Trump continues to view them principally as solutions to what he perceives as structural problems within international trade itself. His administration’s protectionism is therefore rooted fundamentally in a populist understanding of economic exchange rather than in a coherent geopolitical grand strategy.

The Legal Architecture of Trump’s Trade Policy

A particularly illuminating aspect of Professor Young’s lecture concerned the legal mechanisms through which the second Trump administration implemented its trade agenda. Rather than seeking comprehensive new trade legislation from Congress, the administration relied extensively upon creative reinterpretations of pre-existing statutory authorities. This strategy reflected both political calculation and institutional constraint. As Professor Young observed, the absence of congressional legislation suggests that the administration lacked sufficient political support to enact its protectionist programme through ordinary legislative channels. Instead, it expanded presidential authority by drawing upon emergency powers and older trade statutes originally intended for very different circumstances. 

The most significant of these measures were the Liberation Day tariffs, introduced under the International Emergency Economic Powers Act (IEEPA). Initially imposing a twenty-percent tariff on European Union imports before temporarily reducing the rate to facilitate negotiations, the administration subsequently threatened to increase duties further if satisfactory agreements were not reached. Simultaneously, tariffs under Section 232 of the Trade Expansion Act were justified on national security grounds, extending earlier measures on steel and aluminium while adding automobiles, pharmaceuticals, and potentially aircraft and semiconductors to the list of targeted sectors.

Professor Young carefully distinguished between these various legal instruments. Section 232 investigations required formal administrative procedures and national security justifications, whereas Section 301 of the Trade Act addressed unfair foreign trade practices. Meanwhile, Section 122 provided temporary authority to respond to balance-of-payments crises. The administration’s increasing reliance upon multiple overlapping statutory provisions reflected its determination to preserve tariff authority even as judicial challenges intensified.

A particularly significant development occurred when the United States Supreme Court ruled that the administration had exceeded its authority under the IEEPA by imposing sweeping tariffs unrelated to genuine national emergencies. Professor Young explained that this decision forced the administration to reconstruct its trade policy through slower and more procedurally constrained legal mechanisms. Without IEEPA authority, the president could no longer credibly threaten immediate tariffs at will. Instead, future protectionist measures increasingly depended upon formal investigations under Sections 232 and 301, reducing executive flexibility while preserving significant scope for continued intervention.

Europe’s Response: Why the European Union Accepted an Unequal Agreement

European Commission headquarters with waving EU flags in Brussels. Photo: Viorel Dudau.

Professor Young then turned to one of the lecture’s most consequential questions: why did the European Union ultimately accept a trade agreement widely perceived as asymmetrical? At first glance, Europe’s willingness to tolerate higher tariffs while making extensive concessions on investment, liquefied natural gas purchases, defense procurement, and market access appeared surprising. Yet Professor Young argued that the agreement can only be understood within the broader geopolitical environment confronting European policymakers. 

The decisive factor, he suggested, was American escalation dominance. European leaders recognized that retaliatory tariffs might provoke not merely commercial countermeasures but broader strategic consequences affecting NATO, military support for Ukraine, and wider transatlantic security cooperation. Under such conditions, trade negotiations became inseparable from security considerations. Unlike China, which responded to American tariffs through symmetrical retaliation, the European Union confronted a much more complex strategic calculus in which commercial interests could not be isolated from defense and foreign policy.

Domestic economic considerations further reinforced this cautious approach. European governments also understood that tariffs impose significant costs upon importing countries themselves. Unlike President Trump, who consistently maintained that foreign exporters bear the burden of tariffs, European policymakers accepted the mainstream economic consensus that tariffs raise costs for domestic consumers and producers. Consequently, there was insufficient political support among member states for an escalatory strategy that risked both economic harm and geopolitical instability.

Professor Young emphasized that the resulting agreement should therefore not be interpreted simply as diplomatic weakness. Rather, it reflected a constrained strategic choice shaped by the intersection of trade policy, security dependence, domestic political calculations, and broader geopolitical uncertainty. The episode vividly illustrates how the second Trump administration has fundamentally altered the relationship between economics and security within the transatlantic partnership, making future trade negotiations inseparable from wider questions concerning the political future of the Atlantic alliance itself.

The Future of Transatlantic Trade: Between Strategic Adjustment and Structural Transformation

In the concluding section of his lecture, Professor Young shifted from diagnosing the contemporary crisis in transatlantic trade relations to assessing its longer-term implications for the liberal international economic order. While acknowledging that Trump’s second presidency has fundamentally disrupted established patterns of cooperation, he cautioned participants against interpreting current developments either as the complete collapse of globalization or as a temporary political aberration that will inevitably disappear with a future change of administration. Instead, he argued that the transatlantic trading relationship is entering a period of structural adaptation in which both the United States and the European Union are reassessing longstanding assumptions concerning openness, interdependence, and economic security. The precise trajectory of this transformation remains uncertain, yet its implications are likely to extend well beyond the current political cycle. 

Professor Young emphasized that contemporary trade conflicts cannot be understood simply through the language of winners and losers. Much of the public debate surrounding tariffs assumes that protectionist measures primarily harm foreign exporters while benefiting domestic industries. Throughout the lecture, however, he repeatedly challenged this assumption by drawing upon well-established principles of international economics. Tariffs are collected by the importing country and are generally borne—at least in substantial part—by domestic consumers, firms, and downstream producers through higher prices and increased production costs. While particular industries may receive temporary protection from foreign competition, the broader economy typically experiences reduced efficiency, increased inflationary pressures, and declining competitiveness.

This distinction is particularly important because it exposes the tension between economic analysis and populist political narratives. Professor Young observed that President Trump consistently presents tariffs as payments made by foreign governments, a characterization that enjoys considerable political resonance despite contradicting mainstream economic understanding. Such narratives simplify complex international production networks into easily understandable stories of national victimhood and economic exploitation, thereby reinforcing broader populist appeals centered upon sovereignty, fairness, and national renewal. The persistence of these narratives demonstrates that trade policy increasingly functions as a symbolic political instrument as much as an economic policy tool.

Is the World Entering an Era of Peak Protectionism?

Professor Young invited participants to consider whether the extraordinary escalation of tariff measures witnessed during 2025 might ultimately represent the high-water mark of contemporary protectionism rather than the beginning of an indefinite upward trajectory. He avoided making deterministic predictions but suggested several reasons for cautious optimism.

One important constraint derives from the institutional environment itself. Judicial scrutiny has already limited some aspects of presidential tariff authority, most notably through court decisions questioning the administration’s expansive interpretation of emergency powers under the IEEPA. Future administrations may therefore encounter greater legal obstacles should they attempt similarly broad exercises of executive trade authority. Moreover, reliance upon alternative statutory mechanisms such as Sections 232 and 301 requires more extensive investigations, administrative procedures, and opportunities for legal challenge, thereby reducing the flexibility that initially characterized Trump’s trade strategy. 

Economic realities may also impose practical limits upon sustained protectionism. As tariffs increasingly affect production costs, inflation, investment decisions, and consumer prices, domestic political support may weaken among sectors previously expected to benefit. Large multinational corporations operating integrated transatlantic supply chains face particularly complex adjustment costs, while export-oriented industries risk retaliatory measures from trading partners. These economic constraints do not eliminate the political appeal of protectionism but complicate its long-term sustainability.

Professor Young nevertheless cautioned against assuming that any future American administration will simply restore the pre-2016 status quo. Concerns regarding industrial resilience, supply-chain security, technological competition, and strategic dependence now extend across much of the American political spectrum. Although future governments may adopt less confrontational methods, greater emphasis upon industrial policy and economic security is likely to remain an enduring feature of American trade policy. Consequently, Europe must prepare for a transatlantic relationship in which strategic economic considerations occupy a far more prominent position than they did during the era of liberal globalization.

The WTO and the Resilience of Multilateral Governance

The lecture concluded with an assessment of the WTO and the broader future of multilateral trade governance. Professor Young acknowledged that the WTO currently confronts one of the most serious crises in its history. The paralysis of the Appellate Body, the increasing use of unilateral trade measures, and growing geopolitical rivalry have significantly weakened the institution’s capacity to enforce common rules. Yet he resisted suggestions that the multilateral trading system has become irrelevant.

Instead, Professor Young argued that the WTO continues to provide the essential legal and institutional framework within which the overwhelming majority of international trade still occurs. Even governments that increasingly resort to unilateral measures frequently justify their actions through existing WTO provisions or seek to preserve the broader institutional architecture. This paradox illustrates both the organization’s current weaknesses and its continuing importance. States may increasingly contest particular rules, yet relatively few advocate abandoning the multilateral trading system altogether. 

The relationship between the United States, the European Union, and China will be especially significant in determining the future evolution of the WTO. Professor Young suggested that effective reform will require accommodating new patterns of state intervention, industrial policy, technological competition, and strategic rivalry while preserving the core principles of predictability, reciprocity, and rules-based cooperation that have historically distinguished the multilateral trading system. Achieving such reforms will undoubtedly prove difficult, but abandoning institutional cooperation altogether would likely generate even greater instability.

Concluding Reflections

Professor Alasdair Young’s lecture offered participants a historically informed, theoretically sophisticated, and policy-relevant examination of one of the defining transformations currently affecting the international political economy. By tracing the evolution of EU–US trade relations from the immediate post-war period to Donald Trump’s second presidency, he demonstrated that contemporary tensions cannot be understood merely as another episode within a familiar cycle of transatlantic disagreement. Rather, they represent a more profound reorientation of American trade policy, one rooted in populist politics, growing skepticism toward globalization, and the increasing fusion of economic and security considerations.

A particularly significant contribution of the lecture was its insistence upon historical perspective. Throughout more than seventy years of transatlantic cooperation, disputes over agriculture, aircraft subsidies, steel, regulatory standards, and exchange-rate policy repeatedly emerged without fundamentally undermining the broader institutional relationship. By situating today’s conflicts within this longer historical trajectory, Professor Young showed precisely why the current moment differs. The second Trump administration has challenged not merely individual policies but many of the assumptions that previously sustained the transatlantic economic partnership itself.

Equally valuable was his nuanced interpretation of the European Union’s response. Rather than portraying European restraint as diplomatic weakness, Professor Young demonstrated that policymakers confronted a far more complex strategic environment in which trade negotiations were inseparable from wider concerns regarding NATO, Ukraine, and transatlantic security. His analysis illustrated how contemporary geoeconomics increasingly blurs the boundaries separating commercial policy, foreign affairs, and national defense.

Perhaps the lecture’s most enduring insight concerned the interaction between populism and international trade. Protectionism, Professor Young argued, derives much of its political power not from economic evidence but from compelling narratives of national decline, external exploitation, and sovereign recovery. These narratives increasingly shape democratic politics on both sides of the Atlantic, ensuring that trade policy will remain deeply politicized regardless of future changes in leadership.

For participants in the ECPS Academy Summer School 2026, the lecture provided far more than an overview of current tariff disputes. It offered a comprehensive analytical framework for understanding how populism, legal innovation, geopolitical rivalry, and institutional change are collectively reshaping one of the world’s most important economic relationships. By integrating historical scholarship, international political economy, trade law, and contemporary policy analysis, Professor Young demonstrated that the future of transatlantic trade will ultimately depend not only upon commercial negotiations but also upon the broader capacity of liberal democracies to reconcile economic openness with political legitimacy, strategic resilience, and an increasingly contested international order.

Photo: Dreamstime.

ECPS Academy Summer School 2026 – Prof. Erik Jones: The Political Economy of EU–US Trade Relations

What happens when the political foundations of the transatlantic partnership begin to erode? In his lecture at the ECPS Academy Summer School 2026, “Europe Between Oceans: The EU in the Age of Geoeconomics, Populism, and Strategic Competition,” Professor Erik Jones argues that Europe is entering a “post-Atlantic” era in which the assumptions that sustained EU–US cooperation since the Second World War are being fundamentally reconfigured. Moderated by Professor Elaine Fahey, the session examines how globalization, democratic polarization, populism, and geopolitical rivalry are reshaping transatlantic trade relations, European strategic autonomy, and the liberal international order. Combining historical perspective with political economy, the lecture offers a compelling framework for understanding Europe’s changing role in an increasingly fragmented world.

Reported by ECPS Staff

The rapid transformation of the transatlantic relationship has become one of the defining developments of the contemporary international political economy. For much of the post-war period, the partnership between Europe and the United States rested upon a remarkably durable combination of shared democratic values, expanding economic integration, multilateral cooperation, and common strategic interests. While periodic disagreements over security, trade, and foreign policy repeatedly tested the alliance, they rarely challenged its underlying political foundations. Today, however, intensifying geopolitical rivalry, democratic polarization, the uneven consequences of globalization, and the resurgence of populism have fundamentally altered the assumptions that long sustained the Atlantic order. As questions of economic security, industrial policy, strategic autonomy, and democratic resilience increasingly intersect, understanding the future of EU–US relations requires moving beyond traditional analyses of trade disputes or diplomatic disagreements to examine the deeper structural transformations reshaping both societies and the international system.

These questions stood at the center of the ECPS Academy Summer School 2026, held under the title “Europe Between Oceans: The EU in the Age of Geoeconomics, Populism, and Strategic Competition.” Bringing together leading scholars and participants from across the world, the programme explored how geopolitical competition, economic fragmentation, democratic backsliding, and the changing architecture of globalization are redefining Europe’s place in an increasingly contested international order. Within this broader intellectual framework, Professor Erik Jones delivered a thought-provoking lecture, “The Political Economy of EU–US Trade Relations,” in which he challenged conventional understandings of the contemporary transatlantic partnership. Rather than interpreting recent tensions as merely another cyclical crisis in EU–US relations, Professor Jones argued that Europe is entering what he described as a “post-Atlantic”era, in which many of the political, economic, and strategic assumptions underpinning the post-war transatlantic relationship are being fundamentally reconfigured. Combining historical analysis, international political economy, European integration studies, and comparative politics, he demonstrated that the current rupture extends far beyond disagreements over tariffs, NATO burden-sharing, or trade negotiations, reflecting instead a deeper erosion of domestic political solidarity, institutional trust, and the liberal consensus that historically sustained transatlantic cooperation.

The session was expertly moderated by Professor Elaine Fahey, Professor of EU Law at City Law School, City St George’s, University of London, whose distinguished scholarship on European Union external relations, international economic governance, cybersecurity, and transatlantic legal cooperation provided an ideal intellectual setting for the discussion. Her own research, situated at the intersection of European law and global governance, closely complements many of the themes explored throughout Professor Jones’s lecture, particularly the evolving legal and institutional architecture of EU–US relations. 

Opening the session, Professor Fahey warmly welcomed participants and underscored Professor Jones’s long-standing contributions to the study of European politics, international political economy, and transatlantic relations. She highlighted his extensive body of scholarship, noting that his work has profoundly shaped contemporary understanding of European integration, economic governance, and the changing dynamics of the Atlantic partnership. Describing his research portfolio as both extensive and intellectually influential, she emphasized that his lecture would offer participants a valuable opportunity to engage with one of the foremost scholars examining Europe’s evolving international position. Her moderation helped situate the discussion within the broader challenges confronting Europe as it navigates an era of geoeconomic rivalry, democratic uncertainty, and strategic realignment.

Drawing on decades of research into European integration, globalization, and international political economy, Professor Jones argued that the future of transatlantic relations will depend less on repairing individual policy disagreements than on rebuilding the domestic political foundations that have historically enabled international cooperation. His lecture offered participants not only a penetrating reinterpretation of EU–US trade relations but also a broader analytical framework for understanding how globalization, democracy, strategic autonomy, and geopolitical competition collectively reshaping Europe’s role in the twenty-first-century international order are.

The Myth of the “Permanent Crisis”: Reinterpreting the Transatlantic Relationship

 

Erik Jones is Professor of European Studies and International Political Economy, Director of the Robert Schuman Centre for Advanced Studies at the European University Institute and Non-resident Scholar at Carnegie Europe.

Professor Jones began his lecture by challenging one of the most deeply embedded assumptions in the study of transatlantic relations: the notion that contemporary tensions between Europe and the United States represent merely another cyclical crisis that, like many before it, will eventually pass. Drawing upon more than two decades of scholarship on European political economy and transatlantic relations, he argued that while crises have repeatedly punctuated the Atlantic partnership since the end of the Second World War, the current rupture differs fundamentally in both its origins and implications. Previous periods of discord occurred within a shared strategic, ideological, and institutional framework that ultimately enabled reconciliation. Today, however, it is precisely those underlying foundations that are being called into question. Consequently, Europe is not simply experiencing another episode of diplomatic disagreement with Washington but entering what Professor Jones described as a “post-Atlantic Europe,” a fundamentally different geopolitical and economic environment requiring a profound reassessment of Europe’s strategic assumptions. 

To illustrate this argument, Professor Jones reflected upon his own scholarly trajectory, recalling that throughout his academic career he had repeatedly written about crises in transatlantic relations. Whether during the presidency of George W. Bush, the economic tensions of the Obama years, or the debates preceding Russia’s full-scale invasion of Ukraine, earlier analyses had consistently been met with reassuring responses from more senior scholars who regarded such crises as temporary disturbances rather than existential challenges. Each previous period of tension, they argued, eventually gave way to renewed cooperation because the Atlantic alliance rested upon enduring political commitments that transcended short-term policy disagreements. Professor Jones acknowledged the historical validity of this interpretation while simultaneously arguing that it no longer adequately explains contemporary developments. The historical pattern of recurring crisis followed by reconciliation, he suggested, has now been fundamentally disrupted. 

Historical Crises and the Resilience of Atlantic Cooperation

To demonstrate why the present moment represents a qualitative rather than merely quantitative change, Professor Jones guided participants through several defining episodes in the history of post-war transatlantic relations. His purpose was not simply to catalogue historical disagreements but to show that previous crises unfolded against a backdrop of shared political purpose that consistently enabled institutional recovery.

The first example was the Suez Crisis of the 1950s, when Britain and France launched military operations against Egypt without American support. Rather than standing alongside its closest European allies, the United States openly opposed their intervention, producing one of the earliest and most serious political ruptures within the Atlantic alliance. At precisely the same time, the Soviet Union’s successful launch of Sputnik dramatically transformed strategic calculations by demonstrating its growing missile capabilities, thereby raising profound doubts concerning the credibility of American nuclear protection for Europe. These simultaneous developments generated widespread uncertainty regarding the future of NATO and the reliability of the United States as Europe’s principal security guarantor. Yet despite these tensions, the alliance endured because both sides remained committed to the broader objective of defending liberal democracy against Soviet communism. 

Professor Jones enriched this historical discussion by referring to contemporary cultural representations of Cold War anxieties, including the films Fail Safe and Dr. Strangelove. Far from being mere cinematic references, these works illustrated the profound uncertainties surrounding nuclear deterrence, strategic credibility, and American leadership that characterized the period. They also demonstrated that European concerns regarding the reliability of the United States are by no means unprecedented. Indeed, fears of abandonment have accompanied the Atlantic alliance since its earliest years.

The lecture then turned to the 1960s and 1970s, another period frequently described as a crisis of transatlantic relations. The Vietnam War generated inflationary pressures throughout the international economy, while President Richard Nixon’s unilateral suspension of the dollar’s convertibility into gold effectively dismantled the Bretton Woods monetary system without prior consultation with America’s European allies. These decisions profoundly unsettled European governments, who viewed them as evidence of Washington’s willingness to prioritize domestic interests over alliance coordination. Nevertheless, cooperation ultimately resumed because disagreements remained confined to specific policy issues rather than challenging the fundamental legitimacy of the Atlantic partnership itself. 

Reagan, Yugoslavia, Iraq, and the Persistence of Strategic Solidarity

Ronald Reagan
Former US President Ronald Reagan. Photo: Joe Sohm / Dreamstime.

Professor Jones proceeded chronologically through later episodes of transatlantic tension, further reinforcing his argument that historical crises consistently differed from the present rupture. During the 1980s, President Ronald Reagan’s assertive rhetoric toward the Soviet Union and debates concerning the deployment of nuclear weapons generated considerable anxiety among European governments. Simultaneously, divergent macroeconomic policies produced additional economic friction between Europe and the United States. Ironically, however, these disagreements also encouraged deeper European integration, particularly through the Single European Act and the ambitious project of completing the European Single Market by 1992. In this sense, earlier transatlantic tensions often stimulated European cooperation rather than undermining it. 

The 1990s brought another difficult period as violence engulfed the former Yugoslavia. Europeans increasingly perceived the United States as reluctant to assume leadership in resolving conflicts on their own continent. Although the Balkan wars exposed important weaknesses within European foreign and security policy, they did not fundamentally weaken transatlantic solidarity. Instead, subsequent cooperation during the Kosovo intervention reaffirmed NATO’s central role in European security.

Similarly, the Iraq War under President George W. Bush produced perhaps the most visible political divisions within the Atlantic alliance since the Suez Crisis. Major European governments openly opposed the American-led invasion, while disagreements concerning international law, multilateralism, and preventive war generated intense diplomatic conflict. Yet, as Professor Jones observed, these disagreements remained disputes among partners who continued to share fundamental commitments to liberal democracy, NATO, and the broader institutional architecture established after 1945. The first Trump administration likewise represented a period of significant tension, yet many Europeans interpreted it as a temporary deviation that would eventually be corrected through subsequent electoral change. President Joe Biden’s election appeared to reinforce precisely this expectation by restoring more conventional forms of diplomatic engagement. 

The historical lesson emerging from these examples was clear. Each previous crisis, however serious, ultimately remained manageable because Europeans and Americans continued to accept common assumptions concerning democratic values, European integration, multilateral cooperation, and collective security. Those shared assumptions acted as institutional anchors that limited political conflict and enabled eventual reconciliation.

Why This Time Is Different: The Domestic Roots of Transatlantic Rupture

Having demonstrated the resilience of earlier crises, Professor Jones introduced the central analytical proposition of his lecture: the current deterioration of transatlantic relations differs because it originates not primarily in foreign policy disagreements but in profound transformations occurring within domestic political systems on both sides of the Atlantic.

According to Professor Jones, globalization undoubtedly generated remarkable economic achievements. Hundreds of millions of people were lifted out of poverty, international trade expanded dramatically, and global prosperity increased to an unprecedented degree. As an economist, he acknowledged having enthusiastically defended these developments for many years. Yet experience has demonstrated that globalization also produced consequences insufficiently anticipated by its strongest advocates. While aggregate prosperity increased, the distribution of economic gains became increasingly unequal, generating social fragmentation, political dissatisfaction, and declining confidence in democratic institutions. 

Professor Jones emphasized that the central challenge lies not in globalization itself but in its uneven domestic consequences. Economic liberalization transformed labor markets, altered patterns of industrial production, weakened local communities, and intensified socioeconomic inequalities. These developments gradually undermined domestic political solidarity, creating fertile conditions for populist movements across both Europe and the United States. Publications that Professor Jones discussed during the lecture—including his work on democracy without solidarity, European populism, and political disintegration—represent sustained attempts to understand precisely these domestic transformations.

This perspective marked an important departure from conventional analyses of transatlantic relations. Rather than portraying populism as an external shock disrupting otherwise stable institutions, Professor Jones argued that domestic political fragmentation has become the principal driver of international instability. Governments increasingly struggle to sustain international commitments because they face electorates that no longer perceive globalization, multilateral cooperation, or European integration as serving their interests. Consequently, the crisis of the Atlantic partnership reflects the erosion of domestic political consensus rather than merely disagreements between national leaders.

TTIP and the Failure of Domestic Political Consensus

Perhaps the clearest illustration of this broader transformation was Professor Jones’s discussion of the Transatlantic Trade and Investment Partnership (TTIP). Originally conceived during the Obama administration as an ambitious effort to deepen economic integration between the European Union and the United States, TTIP appeared, from an economic perspective, to represent an exceptionally promising initiative. High-level expert groups identified numerous opportunities for reducing unnecessary regulatory barriers, improving investment conditions, and creating employment through enhanced transatlantic cooperation. Economists widely regarded the agreement as “low-hanging fruit” capable of generating mutual gains with relatively limited political cost. 

Yet precisely the opposite occurred. Rather than receiving broad public support, TTIP provoked widespread political resistance on both sides of the Atlantic. Large demonstrations took place throughout Europe, particularly in Germany, while substantial opposition also emerged within the United States. Professor Jones emphasized that this reaction profoundly surprised policymakers and scholars alike. The agreement’s failure revealed that domestic political divisions had become so deep that even initiatives promising mutual economic benefit could no longer command democratic legitimacy.

For Professor Jones, TTIP’s collapse represented a critical turning point. It demonstrated that repairing transatlantic relations could no longer be achieved solely through diplomatic negotiation or economic cooperation. Unless domestic political cohesion could first be restored, international agreements would continue to encounter growing public resistance. Instead of healing these domestic divisions, however, subsequent political developments—including the rise of increasingly assertive populist movements and Donald Trump’s return to office—would deepen them further, thereby transforming domestic fragmentation into an enduring crisis of the Atlantic partnership itself.

Trump’s Second Presidency and the Emergence of a “Post-Atlantic Europe”

Donald Trump.
Donald Trump’s first presidential campaign rally at the Phoenix Convention Center, where thousands gathered to hear him speak as protesters demonstrated outside. Photo: Danny Raustadt.

Having established that the current transatlantic crisis originates in deepening domestic political fragmentation rather than temporary diplomatic disagreement, Professor Jones turned to the question that lies at the heart of his lecture: why does Donald Trump’s second presidency represent a fundamentally different moment in the history of EU–US relations? While cautioning against attributing all contemporary tensions exclusively to Trump himself, Professor Jones argued that the current administration has exposed—and significantly accelerated—structural transformations that had already begun reshaping the Atlantic partnership. Trump’s return to office, he suggested, should be understood less as the cause of the crisis than as its most visible manifestation, reflecting profound changes within American politics that have altered Washington’s understanding of Europe and the wider liberal international order.

Unlike previous episodes of transatlantic disagreement, which generally revolved around particular policy disputes, the present rupture challenges the normative foundations upon which post-war cooperation was built. Professor Jones argued that three developments occurring during the early months of Trump’s second administration illustrate the magnitude of this transformation. Individually, each appears to concern a discrete policy issue; collectively, however, they signal a fundamental redefinition of the political, institutional, and strategic assumptions that have governed the Atlantic alliance for more than seventy years.

Three Signals of Strategic Rupture

The first illustration concerned the speech delivered by Vice President J. D. Vance at the Munich Security Conference in early 2025. Rather than focusing primarily on Russia, China, or conventional security threats, Vance criticized European governments for marginalizing the German far-right party Alternative für Deutschland (AfD) and argued that the greatest threat to European democracy stemmed from restrictions on political speech rather than from extremist political movements themselves. Professor Jones emphasized that Europeans interpreted these remarks very differently from their American authors. From Washington’s perspective, the speech reflected concerns about freedom of expression. From Europe’s perspective, however, it appeared to repudiate decades of shared commitment to defending liberal democracy against anti-democratic political forces.

The second example concerned President Trump’s repeated assertion that the European Union had been created to exploit—or, in his own blunt formulation, to “screw”—the United States. Professor Jones argued that such statements represent much more than rhetorical provocation. They directly challenge one of the central pillars of post-war American foreign policy: sustained support for European integration. Since the Marshall Plan, successive American administrations—Republican and Democratic alike—had consistently viewed European integration as essential for securing peace, prosperity, and democratic stability on the continent. To portray the European Union as fundamentally hostile to American interests therefore represents a striking reversal of decades of bipartisan strategic thinking.

The third illustration came from remarks delivered by Secretary of Defense Pete Hegseth, who suggested that European governments should assume primary responsibility for their own conventional defense while the United States concentrated increasingly upon nuclear deterrence and strategic competition elsewhere. Although debates over NATO burden-sharing are hardly new, Professor Jones argued that this formulation implied something much more significant: the gradual disengagement of the United States from the conventional military commitments that have underpinned European security since the beginning of the Cold War. Together, these three developments questioned the legitimacy of liberal democracy, the value of European integration, and the credibility of American security guarantees—the three institutional foundations of the post-war Atlantic order.

Liberal Democracy as the Original Foundation of the Atlantic Partnership

Professor Jones next explored the historical origins of these three pillars, beginning with liberal democracy itself. One of the lecture’s most thought-provoking contributions was its insistence that the transatlantic relationship was never merely an alliance of convenience organized around military cooperation or economic exchange. Rather, from its inception, it represented a normative project centered upon the defense and consolidation of liberal democratic values. The Atlantic partnership emerged not simply to contain Soviet military power but to safeguard democratic political systems against both communist and fascist alternatives.

Professor Jones reminded participants that this commitment often required active American involvement in European domestic politics. During the immediate post-war decades, Washington consistently encouraged European governments to exclude explicitly anti-democratic political movements from executive power, regardless of their electoral strength. Communist parties in countries such as Italy and France were regarded not simply as ordinary political competitors but as potential threats to the democratic order itself. Consequently, successive American administrations openly intervened—politically, diplomatically, and sometimes covertly—to preserve liberal democratic institutions across Western Europe.

To illustrate this point, Professor Jones discussed the example of Richard Gardner, the United States ambassador to Italy during the late 1970s, who openly described preventing the Italian Communist Party from entering government as one of his principal diplomatic achievements. From today’s perspective, such intervention may appear extraordinary. Yet it reflected the prevailing understanding that the transatlantic alliance rested upon shared commitments to a particular model of constitutional democracy, one that required defending democratic institutions against forces regarded as fundamentally hostile to liberal constitutionalism.

Against this historical background, Vice President Vance’s Munich speech acquired a significance extending well beyond debates concerning freedom of expression. By criticizing European efforts to isolate parties widely regarded as extremist, the speech appeared to repudiate one of the central political principles upon which transatlantic cooperation had historically been built. Europeans interpreted this not merely as disagreement over electoral competition but as evidence that the United States itself was reconsidering its long-standing commitment to defending liberal democracy as a foundational value of the Atlantic community.

European Integration and the Political Economy of Atlantic Cooperation

Professor Jones then turned to the second pillar of the Atlantic relationship: European integration. Here again, he challenged simplistic interpretations that portray integration as an exclusively European project. Instead, he demonstrated that American support proved indispensable throughout its historical development.

Following the Second World War, the United States sought to stabilize Europe by encouraging forms of economic cooperation capable of reducing interstate conflict while preserving democratic self-government. Although early American proposals for extensive economic planning attracted only limited enthusiasm, European leaders gradually developed alternative institutional arrangements beginning with the European Coal and Steel Community, later expanding through the European Economic Community and ultimately the European Union. Throughout each stage of this process, successive American administrations consistently treated European integration as a strategic asset rather than an economic threat.

Professor Jones emphasized that American support extended beyond diplomatic rhetoric. Washington negotiated directly with European institutions, particularly the European Commission, recognizing them as legitimate representatives of a progressively integrated European economy. Far from disadvantaging the United States, integration generated enormous economic opportunities. American firms accumulated roughly $19 trillion in investments across Europe, while European investment in the United States reached approximately $9 trillion, creating one of the most deeply integrated economic relationships in world history. Such figures underscore Professor Jones’s central point: European integration has long benefited both sides of the Atlantic.

Against this historical record, President Trump’s characterization of the European Union as an organization designed to exploit the United States appeared fundamentally inconsistent with the historical evolution of transatlantic political economy. Rather than reflecting objective economic realities, such claims illustrate how contemporary populist narratives increasingly reinterpret long-established institutions through the lens of nationalist political grievance.

NATO, Deterrence, and the Transformation of European Security

NATO
NATO headquarters and monument in Brussels, Belgium, the political and administrative center of the North Atlantic Alliance. Photo: Dreamstime.

The lecture’s third major theme addressed the evolution of European security architecture. Professor Jones reminded participants that NATO was never simply a military alliance; it represented a carefully constructed institutional framework designed simultaneously to reassure European states, constrain renewed German militarism, and deter Soviet expansion. American military commitments formed the indispensable foundation of this arrangement.

Particularly important was Professor Jones’s explanation of the evolution of nuclear deterrence strategy. During the early Cold War, the United States relied heavily upon the doctrine of massive retaliation, threatening overwhelming nuclear response to any Soviet aggression. As strategic realities evolved, however, NATO gradually adopted the doctrine of flexible response, later conceptualized as extended deterrence. Under this framework, deterrence depended not merely upon nuclear weapons but upon credible American participation at every stage of military escalation—from conventional forces through tactical nuclear capabilities to strategic deterrence.

Professor Jones argued that recent suggestions that Europe should assume primary responsibility for conventional defense while the United States concentrated largely upon nuclear capabilities fundamentally undermine this strategic logic. If American conventional forces withdraw from Europe, the credibility of subsequent stages of deterrence becomes increasingly uncertain. European governments therefore interpret such proposals not simply as burden-sharing adjustments but as indications that the United States may no longer regard European security as an essential strategic priority.

From Domestic Disintegration to International Fragmentation

Throughout this section of the lecture, Professor Jones consistently returned to the relationship between domestic political change and international institutional transformation. The weakening of liberal democratic consensus within the United States has simultaneously altered American attitudes toward European integration, multilateral cooperation, and collective security. International fragmentation thus mirrors domestic political disintegration.

The cumulative consequence, Professor Jones argued, is the gradual emergence of a “post-Atlantic Europe.” This does not imply the complete disappearance of transatlantic cooperation or the collapse of NATO. Rather, it suggests that Europe can no longer assume the permanence of institutional arrangements that once appeared almost immutable. As shared democratic values weaken, domestic political divisions deepen, and American strategic priorities evolve, European governments increasingly recognize the necessity of developing greater strategic autonomy across trade, industrial policy, defense, and technological innovation.

Accordingly, the current transformation extends well beyond temporary diplomatic disagreement. It represents the beginning of a new political economy in which Europe must increasingly redefine its international role under conditions of diminished American leadership and growing geopolitical uncertainty. The challenge confronting European policymakers is therefore not simply how to repair relations with Washington but how to adapt the European project itself to an international order that no longer guarantees the stability upon which post-war integration was originally constructed.

Globalization’s Unintended Consequences: From Economic Integration to Political Disintegration

In the concluding section of his lecture, Professor Erik Jones shifted from historical diagnosis to broader structural explanation, asking why the transatlantic partnership has become increasingly vulnerable despite decades of unprecedented economic integration. His answer challenged one of the central assumptions underpinning the liberal international order: that expanding globalization would naturally reinforce both prosperity and political stability. While acknowledging that globalization generated extraordinary economic gains and contributed to lifting hundreds of millions of people out of poverty, Professor Jones argued that its domestic political consequences proved far more disruptive than policymakers and economists had anticipated. The crisis confronting the Atlantic partnership, therefore, cannot be understood without examining the social and political transformations produced by globalization itself.

Reflecting on his own intellectual evolution, Professor Jones candidly acknowledged that, like many economists of his generation, he had long defended free trade as an almost unequivocal public good. The promise of globalization rested on a persuasive logic: greater openness would increase efficiency, expand markets, stimulate innovation, and ultimately improve living standards across societies. In aggregate terms, this prediction proved remarkably accurate. Yet aggregate success concealed profound distributive consequences that gradually undermined domestic political cohesion. The benefits of globalization, while substantial, were distributed unevenly across regions, industries, firms, and social groups. As inequalities widened and local communities experienced industrial decline, economic insecurity increasingly translated into political dissatisfaction.

Crucially, Professor Jones argued that these developments should not be interpreted merely as the inevitable “losers” of globalization resisting economic change. Instead, they reflected structural distortions within the organization of global production itself. Global trade increasingly became concentrated around highly integrated logistics networks, dominant shipping companies, large-scale retailers, and sophisticated infrastructure managers capable of exercising considerable market power. While globalization appeared to promote open competition, in practice it often strengthened large multinational corporations at the expense of smaller firms embedded within local economies.

One of the lecture’s most illuminating illustrations concerned the transformation of retail competition in the United States. Large corporations such as Walmart could exploit global supply chains on terms unavailable to smaller businesses. Their purchasing power enabled them to obtain lower prices, preferential shipping arrangements, and economies of scale that local retailers simply could not match. Consequently, globalization altered competitive conditions not only internationally but also within domestic markets, contributing to the decline of independent businesses and weakening local economic ecosystems. Similar processes unfolded across Europe, where increasing market concentration reinforced regional inequalities and accelerated socioeconomic polarization.

Professor Jones therefore invited participants to reconsider globalization not simply as an international phenomenon but as a force fundamentally reshaping domestic political economy. The erosion of local economic resilience gradually weakened social solidarity, increased distrust toward governing institutions, and created fertile political opportunities for populist entrepreneurs promising to restore national control over markets, borders, and economic policy. In this sense, domestic political fragmentation became an unintended consequence of the very international economic integration that the transatlantic partnership had so successfully promoted.

Europe’s Strategic Response: From Atlantic Integration to European-Centered Geoeconomics

Photo: Dreamstime

If globalization weakened the domestic foundations of Atlantic cooperation, Professor Jones argued, Europe’s contemporary policy response reflects a growing recognition that previous assumptions concerning international economic openness can no longer be taken for granted. European policymakers increasingly accept that they cannot simply wait for future American administrations to restore earlier patterns of transatlantic cooperation. Instead, they have begun constructing a more autonomous economic and strategic framework capable of protecting European interests irrespective of political developments in Washington.

Importantly, Professor Jones emphasized that this transformation did not begin with Donald Trump’s second presidency alone. Several initiatives emerged during the later years of the first Trump administration and expanded significantly following Russia’s invasion of Ukraine. Recent American political developments have accelerated rather than initiated Europe’s broader strategic reorientation. The essential objective is not to abandon the Atlantic partnership but to reduce Europe’s structural dependence upon external political decisions over which Europeans exercise little influence.

This shift is particularly visible in the field of industrial policy and public procurement. Professor Jones highlighted the emergence of local content requirements within European defense procurement; whereby publicly funded contracts increasingly favor production located within Europe itself. Initially confined to defense industries, this principle subsequently expanded through policy initiatives such as the Draghi Report on European Competitiveness and later legislative proposals including the Industrial Accelerator Act. Together, these developments illustrate the emergence of a distinctly European approach to geoeconomic governance in which industrial resilience, supply-chain security, and technological sovereignty increasingly complement traditional commitments to market openness.

The significance of these reforms extends well beyond procurement rules. Local content requirements encourage firms operating within Europe—including subsidiaries of American multinational corporations—to source components, technologies, and services increasingly from European suppliers. Likewise, European firms operating in North America will become progressively integrated into North American production networks. As a result, transatlantic corporations may remain formally multinational while becoming economically embedded within increasingly separate regional production systems.

Professor Jones argued that this gradual regionalization of global value chains represents one of the most important structural transformations currently reshaping the international political economy. Rather than a complete reversal of globalization, it signals the emergence of a more fragmented form of globalization organized around competing regional economic blocs. Europe, North America, and China increasingly seek to secure critical technologies, strengthen domestic industrial capacity, and reduce strategic dependence upon external actors. The consequence is not economic autarky but a more compartmentalized global economy in which geopolitical considerations increasingly shape commercial relationships.

A Fragmenting International Order

Professor Jones further suggested that these developments should not be interpreted as unique to Europe. Similar tendencies are already visible across other major economies, particularly China, which has likewise introduced increasingly restrictive policies governing foreign investment, technology transfer, and participation within strategically significant sectors. Across the global economy, governments are placing greater emphasis upon resilience, redundancy, and strategic control rather than efficiency alone.

This transformation represents a profound departure from the assumptions that guided globalization during the final decades of the twentieth century. For much of that period, policymakers regarded expanding interdependence as both economically desirable and politically stabilizing. Contemporary governments, by contrast, increasingly perceive excessive dependence itself as a strategic vulnerability. Economic openness therefore becomes conditional rather than universal, shaped by concerns regarding national security, technological competition, and geopolitical rivalry.

Professor Jones described this evolving landscape as one in which the West itself is becoming rewired. The United States and Europe will undoubtedly remain close economic partners, yet the institutional mechanisms through which they cooperate are likely to differ substantially from those characterizing the post-war Atlantic order. Firms operating on opposite sides of the Atlantic may increasingly participate in separate regulatory frameworks, production systems, technological ecosystems, and industrial strategies despite maintaining shared ownership structures. The Atlantic partnership thus survives, but in a significantly altered institutional form.

Conclusion

Professor Erik Jones delivered an intellectually ambitious and historically grounded examination of one of the defining transformations confronting Europe in the twenty-first century. Rather than interpreting current tensions between Europe and the United States as another temporary diplomatic dispute, he argued persuasively that the Atlantic partnership is entering a qualitatively new phase shaped by domestic political fragmentation, declining social solidarity, and the geopolitical restructuring of the global economy. His concept of a “post-Atlantic Europe” offers an important analytical framework for understanding why contemporary challenges extend beyond disagreements over tariffs, defense spending, or trade negotiations to encompass the very political foundations of transatlantic cooperation.

One of the lecture’s greatest strengths lay in its ability to integrate historical perspective with contemporary political analysis. By tracing successive crises from the Suez intervention and the collapse of Bretton Woods through the Cold War, the Iraq War, and the Trump presidencies, Professor Jones demonstrated that previous periods of tension unfolded within an enduring consensus concerning liberal democracy, European integration, and collective security. The current moment differs precisely because these shared assumptions are themselves increasingly contested. This insight represents a significant contribution to contemporary debates concerning European integration, transatlantic relations, and international political economy.

Equally compelling was Professor Jones’s explanation of how domestic political developments reshape international institutions. Rather than portraying globalization solely as a story of expanding prosperity, he highlighted its unintended distributive consequences, demonstrating how widening inequalities, concentrated market power, and declining local economic resilience gradually undermined democratic solidarity. Populism, in this account, emerges not simply as a reaction against international cooperation but as a political response to structural transformations embedded within globalization itself.

The lecture also provided participants with an important conceptual framework for interpreting Europe’s evolving pursuit of strategic autonomy. European industrial policy, procurement reform, technological resilience, and regional supply-chain development are not isolated policy innovations but components of a broader effort to adapt to an international environment characterized by geopolitical competition and declining certainty regarding American leadership. Europe is increasingly seeking to preserve openness while simultaneously strengthening its capacity to act independently when necessary.

Perhaps the lecture’s most enduring message was that the future of Europe will depend less upon restoring an earlier version of the Atlantic partnership than upon successfully navigating a profoundly altered international landscape. The transatlantic relationship is unlikely to disappear; however, it will increasingly operate within a fragmented global economy marked by competing centers of production, differentiated regulatory systems, and more regionally organized value chains. Understanding this transition, Professor Jones argued, is essential for scholars and policymakers alike.

For participants in the ECPS Academy Summer School 2026, Professor Jones’s lecture provided far more than an analysis of EU–US trade relations. It offered a sophisticated reinterpretation of the evolving relationship between globalization, democracy, European integration, and geopolitical order. Combining historical depth, theoretical sophistication, and contemporary relevance, the lecture challenged participants to rethink some of the most enduring assumptions of post-war international politics while providing a compelling analytical lens through which to understand Europe’s changing place in an increasingly fragmented world.

Illustration of the global economic impact of US tariff policies. Photo: Matthew Fowler / Dreamstime.

ECPS Academy Summer School 2026 – Prof. Kent Jones: Populism, Legitimacy, and the Politicization of Trade

As international trade becomes increasingly entangled with geopolitical rivalry, democratic legitimacy, and populist politics, understanding the future of the rules-based trading order has never been more urgent. In his lecture at the ECPS Academy Summer School 2026, “Europe Between Oceans: The EU in the Age of Geoeconomics, Populism, and Strategic Competition,” Professor Kent Jones examines how the resurgence of populism—particularly under Donald Trump’s second presidency—is reshaping the World Trade Organization (WTO) and challenging the legitimacy of multilateral trade governance. Moderated by Dr. Neo Sithole, the session combines international economics, institutional theory, and political economy to explore why the future of global trade depends not only on markets and tariffs but also on trust, shared norms, and the political foundations of international cooperation.

Reported by ECPS Staff

The accelerating politicization of international trade has emerged as one of the defining features of the contemporary global political economy. Once regarded primarily as a technocratic domain governed by multilateral rules, reciprocal market access, and the pursuit of economic efficiency, international trade has increasingly become an arena where questions of national sovereignty, democratic legitimacy, geopolitical rivalry, and populist mobilization converge. Rising protectionism, strategic competition among major powers, disruptions to global supply chains, and the growing tendency of governments to weaponize economic interdependence have fundamentally challenged the assumptions underpinning the post-war liberal trading order. Understanding contemporary trade politics therefore requires moving beyond conventional economic analysis to examine its broader political, institutional, and ideological foundations.

These themes were at the heart of the ECPS Academy Summer School 2026, held under the title “Europe Between Oceans: The EU in the Age of Geoeconomics, Populism, and Strategic Competition.” Bringing together leading scholars and participants from across the globe, the programme explored how geoeconomic rivalry, democratic backsliding, populism, and the erosion of the liberal international order are reshaping both European integration and global governance. Within this broader intellectual framework, Professor Kent Jones‘s lecture, “Populism, Legitimacy, and the Politicization of Trade,” offered a timely and theoretically rich examination of the profound political transformation currently affecting international trade governance. 

The session was thoughtfully moderated by Dr. Neo Sithole, Non-resident Research Fellow at the ECPS Foreign Policy Research Group, whose introduction effectively situated Professor Jones’s lecture within the broader objectives of the Summer School. By highlighting Professor Jones’s distinguished scholarship on international trade, globalization, and the political economy of multilateral institutions, Dr. Sithole prepared participants to engage with the lecture’s central themes while emphasizing the growing importance of examining trade through the interconnected lenses of populism, democratic legitimacy, and international governance. 

Drawing on international economics, political economy, institutional theory, and constructivism, Professor Jones argued that the contemporary crisis confronting the World Trade Organization (WTO) extends far beyond disputes over tariffs or market access. Instead, it reflects the gradual erosion of the shared political commitment that has historically sustained the rules-based trading system. By connecting the resurgence of populism to the weakening of institutional legitimacy and the fragmentation of multilateral cooperation, the lecture provided participants with a sophisticated analytical framework for understanding one of the most consequential transformations in the contemporary international political economy. 

Populism, Trade, and the Erosion of Multilateral Legitimacy

Dr. Kent Jones, Professor Emeritus of International Economics at Babson College and author of Populism and Trade: The Challenge to the Global Trading System.

Professor Kent Jones opened his lecture by situating contemporary trade politics within the extraordinary transformation brought about by Donald Trump’s second presidency. While acknowledging that many of the structural challenges confronting the World Trade Organization (WTO) predated the current administration, he argued that the return of Donald Trump to the White House has accelerated and deepened a crisis that had been developing gradually for more than two decades. The principal concern, he suggested, is no longer simply the rise of protectionism or the proliferation of tariffs. Rather, the international trading system is confronting a far more profound challenge: the weakening of the political legitimacy upon which multilateral economic governance ultimately depends.

Professor Jones emphasized that discussions of contemporary trade policy often focus narrowly on economic indicators—tariff rates, trade balances, market access, or industrial competitiveness. While these variables remain important, they fail to capture the political transformation now underway. Trade policy has increasingly become an instrument of domestic political mobilization, ideological conflict, and electoral strategy. Consequently, understanding today’s international economic order requires moving beyond conventional economic analysis toward a broader examination of political narratives, institutional trust, and the changing relationship between domestic politics and global governance.

This shift, Professor Jones argued, is perhaps most clearly illustrated by the evolution of American trade policy under Donald Trump. Whereas previous administrations generally accepted the WTO as the principal institutional framework through which trade disputes should be managed, Trump’s second administration increasingly treated international trade rules as obstacles to national political objectives rather than mutually beneficial commitments. In doing so, trade policy became deeply intertwined with broader populist narratives concerning sovereignty, national decline, foreign competition, and elite betrayal.

Trump II and the Politicization of Trade Policy

A central theme of Professor Jones’s lecture was that Donald Trump’s second administration represents what he described as an “advanced stage” of populist trade policy. While Trump’s first presidency had already challenged important elements of the post-war trading order, the second administration has pursued a considerably more systematic effort to redefine both the legal and political foundations of American trade policy.

Professor Jones observed that Trump’s political strategy closely mirrors classical theories of populism. Like many populist leaders, Trump constructs politics around a moral division between a virtuous and victimized people on one side and corrupt domestic and international elites on the other. International trade occupies a central place within this narrative because it provides a highly visible explanation for economic grievances experienced by many citizens. Trade deficits, factory closures, industrial decline, and employment insecurity are presented not as the product of complex structural transformations but as the direct consequence of betrayal by political elites and exploitation by foreign governments.

According to Professor Jones, this political framing fundamentally alters the purpose of trade policy. Rather than serving as an instrument for promoting mutual economic gains through cooperation, tariffs become highly visible political symbols demonstrating governmental willingness to defend national interests against external threats. Their economic effectiveness becomes secondary to their political value as expressions of sovereignty and national strength.

Trump’s well-known enthusiasm for tariffs therefore reflects more than a preference for protectionism. Professor Jones argued that tariffs have become one of the administration’s principal instruments of political bargaining. By abandoning uniform tariff schedules and introducing country-specific measures, the administration sought to maximize American leverage in bilateral negotiations while simultaneously demonstrating decisive political leadership to domestic audiences. The resulting approach departs significantly from the multilateral principles that have governed international trade since the establishment of the General Agreement on Tariffs and Trade (GATT) in 1947.

Redefining National Security in International Trade

One of the lecture’s most significant analytical contributions concerned Professor Jones’s discussion of how the Trump administration has reinterpreted the concept of national security within international trade law. Traditionally, Article XXI of the GATT has been understood as a narrowly defined exception permitting governments to restrict trade under exceptional circumstances involving genuine security emergencies, wartime conditions, or other extraordinary threats to national survival.

Professor Jones argued that the Trump administration fundamentally expanded this interpretation by redefining economic concerns—including employment levels in strategic industries such as steel—as matters of national security. This considerably broader understanding enabled the administration to justify protectionist measures under legal provisions originally intended for exceptional geopolitical circumstances rather than routine economic policy.

Such reinterpretations carry consequences extending well beyond the immediate disputes surrounding particular tariff measures. If national security becomes an elastic concept encompassing virtually any domestic economic concern, the distinction between exceptional emergency measures and ordinary commercial policy effectively disappears. Professor Jones suggested that this development threatens one of the central normative foundations of the multilateral trading system by making international commitments increasingly contingent upon unilateral political interpretation.

Liberation Day Tariffs and the Challenge to WTO Rules

3D illustration: Lightspring.

Professor Jones devoted considerable attention to the so-called “Liberation Day” tariffs introduced during Trump’s second administration, presenting them as perhaps the clearest illustration of the growing politicization of international trade. These measures were implemented under emergency executive authority through the International Emergency Economic Powers Act (IEEPA), enabling the administration to bypass many of the institutional constraints traditionally associated with American trade policy. The significance of these tariffs, Professor Jones argued, lies not merely in their economic effects but in the legal and institutional precedents they establish. By unilaterally departing from previously negotiated tariff schedules, the administration effectively challenged one of the WTO’s most fundamental operating principles: that tariff commitments constitute binding international obligations rather than temporary political preferences.

Equally important was the administration’s decision to impose different tariff levels on different countries. Professor Jones explained that this directly conflicted with the WTO’s Most-Favoured-Nation (MFN) principle, which requires members to extend equivalent tariff treatment to all trading partners except under carefully defined exceptions. The move from universal rules toward individualized bilateral bargaining represented, in his assessment, a profound shift away from multilateral governance toward a more explicitly power-based conception of international economic relations.

From Trump’s perspective, this approach significantly increased American bargaining leverage by allowing the United States to negotiate separately with each trading partner. However, Professor Jones noted that such bilateralism comes at the expense of predictability, legal certainty, and institutional trust—the very qualities the WTO was originally designed to provide. The transition from collectively negotiated rules to discretionary bilateral bargaining fundamentally alters both the operation and the legitimacy of the international trading system.

Populist Narratives and Economic Misrepresentation

Professor Jones further explored the relationship between populist communication strategies and trade policy by examining the administration’s repeated claims regarding tariffs themselves. Throughout the political debate, President Trump consistently argued that tariffs would be paid by foreign exporters rather than American consumers. From an economic perspective, Professor Jones noted, this assertion contradicts established principles of international trade economics, according to which tariffs are collected from importers and are frequently passed on, at least partially, to domestic consumers through higher prices.

Yet the persistence of this narrative illustrates an important feature of populist politics. The political effectiveness of such claims depends less upon their economic accuracy than upon their symbolic resonance. By portraying tariffs as costs imposed upon foreign competitors rather than domestic citizens, the administration reinforced broader narratives depicting international trade as a contest between national winners and losers rather than a system of reciprocal economic exchange.

Similarly, Professor Jones highlighted Trump’s frequent depiction of foreign countries as having “ripped off” the United States through unfair trade practices. This language transformed complex structural phenomena—such as persistent trade deficits, changing comparative advantages, and global supply-chain integration—into morally charged political narratives centered upon victimization and betrayal. Such rhetoric strengthens populist appeals by simplifying complicated economic relationships into emotionally accessible stories involving identifiable heroes and villains.

Throughout this discussion, Professor Jones repeatedly emphasized that these narratives are not merely rhetorical devices but active components of contemporary trade policy itself. The politicization of international commerce has therefore altered not only the substance of economic governance but also the language through which trade is understood, debated, and legitimized within democratic politics. As trade becomes increasingly embedded within broader conflicts over national identity, sovereignty, and political authority, the future of the multilateral trading system will depend as much upon rebuilding political legitimacy as upon negotiating new commercial agreements.

Constructivism and the Institutional Foundations of the World Trade Organization

Moving beyond the immediate controversies surrounding Donald Trump’s tariff policies, Professor Jones devoted the second half of his lecture to a broader theoretical question: why do international trade institutions command obedience in the first place? Rather than explaining the World Trade Organization (WTO) solely through the lens of economics or power politics, he adopted a constructivist institutional perspective, arguing that the effectiveness of international organizations ultimately depends upon shared beliefs, common expectations, and the willingness of states voluntarily to comply with collectively accepted rules. This analytical shift allowed participants to view the current crisis of the multilateral trading system not merely as a policy dispute but as a deeper crisis of institutional legitimacy.

Drawing upon the constructivist work of the philosopher John Searle, Professor Jones presented the WTO as a social institution built upon what he termed collective intentionality—the shared understanding among states that mutually accepted rules generate benefits greater than unilateral action. In this interpretation, institutions are not sustained primarily through coercion or legal enforcement but through the widespread belief that cooperation serves the long-term interests of all participants. Compliance therefore derives not simply from fear of sanctions but from confidence in the legitimacy and predictability of the institutional framework itself.

This perspective represented an important departure from purely realist interpretations of international trade. While material power undoubtedly shapes negotiations, Professor Jones argued that the durability of the post-war trading system depended equally upon a collective commitment to rules-based cooperation. States accepted temporary constraints upon unilateral action because they expected reciprocal benefits through expanded market access, reduced uncertainty, and lower transaction costs. The WTO, therefore, should be understood as an institutional embodiment of mutually shared expectations rather than merely a legal framework governing tariffs and commercial exchanges.

Collective Intentionality, Embedded Liberalism, and Pooled Sovereignty

Professor Jones further explained that collective intentionality within the WTO was historically reinforced by the broader political philosophy of embedded liberalism, originally articulated by John Ruggie. According to this post-war compromise, governments accepted greater openness in international trade while simultaneously preserving sufficient domestic policy autonomy to protect their societies against the disruptive consequences of globalization. Trade liberalization was never intended to eliminate national sovereignty; rather, it sought to reconcile international openness with domestic political stability.

This balance between openness and domestic autonomy formed one of the lecture’s recurring themes. Professor Jones emphasized that membership in the WTO does not require governments to abandon sovereignty altogether. Instead, participation involves what he described as a form of pooled sovereignty, whereby states voluntarily coordinate aspects of their trade policies in exchange for reciprocal access to foreign markets. Rather than surrendering authority, governments collectively exercise it through commonly negotiated rules. 

Such arrangements reduce uncertainty for economic actors by establishing predictable commercial environments. Exporters gain confidence that market access will not suddenly disappear, investors can make long-term decisions under stable regulatory conditions, and governments themselves avoid costly cycles of retaliatory protectionism. These institutional benefits explain why the multilateral trading system contributed not only to expanding international commerce but also to broader post-war economic stability.

Professor Jones argued, however, that the contemporary resurgence of populism places this delicate balance under considerable strain. As political leaders increasingly portray international institutions as constraints upon national sovereignty rather than expressions of shared governance, the very concept of pooled sovereignty becomes politically contested. Consequently, the legitimacy of multilateral institutions weakens even before their formal legal structures begin to deteriorate.

Institutional Output: Negotiation, Dispute Settlement, and Rule-Based Governance

Professor Jones then examined the principal functions through which the WTO translates collective intentionality into practical governance. He identified three core institutional outputs: multilateral trade negotiations, rule-making, and dispute settlement. Together, these mechanisms transform abstract commitments to cooperation into concrete institutional practices that regulate international commerce. 

Trade negotiations constitute the organization’s legislative function, enabling member states collectively to update commercial rules in response to changing economic conditions. The rulebook itself provides predictability by defining acceptable policy behaviour, thereby reducing uncertainty for both governments and private economic actors. Finally, the dispute settlement system offers an institutional mechanism for resolving disagreements peacefully rather than through unilateral retaliation or escalating trade wars.

Professor Jones emphasized that these three functions are mutually reinforcing. Negotiations produce rules, rules guide behaviour, and dispute settlement preserves confidence that agreed commitments will be respected. When any one component begins to weaken, the legitimacy of the entire institutional framework is gradually undermined.

From this perspective, contemporary challenges confronting the WTO cannot be understood merely as isolated legal disagreements. Instead, they represent cumulative pressures affecting every stage of institutional governance—from negotiating new agreements to maintaining existing commitments and enforcing compliance. Populist politics accelerates this process by encouraging governments to prioritize immediate domestic political gains over longer-term institutional stability.

The Historical Evolution from GATT to the WTO

The World Trade Organization (WTO) headquarters in Geneva, Switzerland—the only international organization responsible for setting and overseeing the rules governing trade between countries. Photo: Hector Christiaen.

Having established the conceptual foundations of institutional legitimacy, Professor Jones turned to the historical evolution of the multilateral trading system itself. He reminded participants that the GATT emerged directly from the catastrophic experience of the interwar period, particularly the destructive protectionism associated with the Great Depression and the Smoot–Hawley tariffs. The architects of the post-war order sought to prevent future economic nationalism by embedding international trade within a stable rules-based institutional framework.

During the GATT era, international trade governance remained relatively modest in institutional design. Negotiations primarily focused upon reducing tariffs, while dispute settlement relied heavily upon diplomatic consultation rather than judicial enforcement. Professor Jones recalled his own experience studying in Geneva during the late 1970s, describing a diplomatic culture in which negotiators frequently knew one another personally and approached disagreements through consensus-building rather than legal confrontation. This atmosphere of professional trust contributed significantly to the resilience of the early trading system.

Despite numerous commercial disputes—including disagreements between the United States and the European Community over agriculture and industrial subsidies—the GATT succeeded in preventing conflicts from escalating into full-scale trade wars. Professor Jones argued that this diplomatic ethos constituted one of the institution’s most underappreciated achievements. Even when negotiations proved difficult, participants generally remained committed to preserving the broader legitimacy of the system itself.

The establishment of the WTO in 1995 represented both a continuation and an expansion of this institutional project. The new organization extended multilateral governance beyond tariffs to encompass services, intellectual property rights, agriculture, and numerous regulatory issues. It also introduced a significantly stronger dispute settlement mechanism featuring judicial panels and an Appellate Body capable of issuing binding legal decisions. While these reforms reflected growing confidence in rules-based governance, Professor Jones suggested that they also introduced new political complexities that would later contribute to institutional tensions.

Why the WTO Entered Crisis Before Trump

Importantly, Professor Jones cautioned against attributing the WTO’s current difficulties exclusively to Donald Trump. Although Trump’s trade policies undoubtedly accelerated institutional erosion, many of the organization’s structural challenges had emerged much earlier. The expansion of membership from twenty-three founding participants under GATT to 166 members within the WTO fundamentally transformed the dynamics of multilateral negotiation.

The increasing diversity of economic interests among developed and developing countries made consensus considerably more difficult to achieve. Negotiations became more complex as new issues—including agriculture, services, intellectual property, environmental regulation, and investment—were incorporated into the multilateral agenda. The WTO’s consensus decision-making procedures, originally designed to preserve sovereign equality among members, increasingly slowed negotiations to the point of institutional paralysis.

Professor Jones identified the collapse of the Doha Development Round as the clearest illustration of these structural limitations. Launched in 2001 with ambitious objectives, the negotiations ultimately failed to generate comprehensive agreements because the growing diversity of member interests rendered consensus extraordinarily difficult. While limited sectoral agreements were eventually concluded, the broader legislative function of the WTO largely stalled.

China’s accession to the WTO introduced additional challenges. Professor Jones noted that China’s distinctive model of state capitalism did not fit comfortably within institutional rules originally designed for predominantly market-oriented economies. Debates surrounding industrial subsidies, state-owned enterprises, technology transfer, and intellectual property increasingly exposed limitations within the existing rulebook. These tensions further complicated efforts to maintain broad political consensus regarding the legitimacy of multilateral trade governance.

Populism as an Institutional Disruptor

Against this historical background, Professor Jones argued that populism should be understood not merely as another political actor participating within the WTO framework but as a force capable of disrupting the institutional logic upon which multilateral cooperation depends. By framing international institutions as manifestations of elite control, populist leaders encourage citizens to question the legitimacy of rules themselves rather than merely particular policy outcomes.

The result is a gradual transformation of international economic governance from a rules-based order emphasizing reciprocity, predictability, and mutual gains toward a more transactional system driven by unilateral bargaining, political symbolism, and national advantage. Professor Jones warned that such a transformation carries implications extending well beyond trade policy. If states increasingly abandon voluntarily accepted rules whenever domestic political incentives change, the foundations of institutional cooperation become progressively more fragile.

Accordingly, the crisis confronting the WTO reflects not only disagreements over tariffs or institutional reform but also a broader contest concerning the future of multilateral governance itself. Whether international institutions can continue to command legitimacy in an age of rising populism remains one of the defining political questions confronting the contemporary international order.

Reimagining the Future of the Multilateral Trading System

In the concluding section of his lecture, Professor Jones turned from diagnosis to prescription, inviting participants to consider how the international trading system might recover its legitimacy in an era increasingly characterized by geopolitical rivalry, economic nationalism, and populist politics. While acknowledging the severity of the challenges confronting the WTO, he resisted deterministic narratives predicting the inevitable collapse of multilateral trade governance. Instead, he argued that the future of the WTO depends on whether governments can reconstruct the political foundations of international cooperation while adapting institutional arrangements to the realities of a transformed global economy.

Professor Jones stressed that despite the unprecedented disruption generated by the United States under Trump’s second administration, the broader multilateral trading system has demonstrated greater resilience than is often assumed. Although Washington has increasingly challenged the organization’s rules, the overwhelming majority of WTO members have continued to conduct their trade relations according to established multilateral principles. In other words, while the United States has become the principal source of institutional disruption, most other countries have deliberately chosen continuity over confrontation, signalling their continued belief in the value of a predictable, rules-based trading order.

This distinction is crucial because it suggests that the WTO’s crisis is not simply one of legal enforcement but of political leadership. The institution itself continues to provide an internationally recognized framework for commercial relations, yet its effectiveness depends heavily upon the willingness of its largest and most influential members to demonstrate commitment to its principles. As Professor Jones repeatedly emphasized throughout the lecture, institutions derive authority not merely from legal texts but from the behaviour of those expected to uphold them.

American Leadership and the Crisis of International Authority

Silhouette of US President Donald Trump attending a conference. Photo: Dreamstime.

Professor Jones devoted particular attention to the changing role of the United States within the post-war international economic order. Historically, the United States had been the principal architect, sponsor, and guarantor of the liberal trading system, championing both the GATT and later the WTO as essential pillars of international economic stability. This leadership role reflected not only American economic power but also a broader strategic commitment to multilateral cooperation after the Second World War.

The contemporary situation, however, represents a striking historical reversal. Rather than defending the institutions it helped create, the United States has increasingly questioned their legitimacy and sought to reshape them according to unilateral political priorities. Professor Jones noted that this transformation has profound symbolic consequences. When the system’s founding sponsor openly challenges its own institutional architecture, confidence among other participants inevitably weakens, even when they remain committed to preserving the rules themselves.

Yet Professor Jones stopped short of concluding that American disengagement must necessarily become permanent. Political leadership changes, electoral outcomes evolve, and institutional preferences may shift over time. Consequently, he suggested that the possibility of renewed American engagement with multilateral trade governance should not be dismissed. Nevertheless, any future return would almost certainly require difficult negotiations concerning the institutional principles that currently divide Washington from much of the international community.

Reforming the WTO: Three Alternative Pathways

Professor Jones concluded his substantive analysis by examining several possible pathways for institutional reform, drawing upon proposals advanced within contemporary scholarship on international political economy. Recognizing that the existing institutional framework faces significant political and practical obstacles, he outlined three broad scenarios through which multilateral trade governance might evolve in the coming years.

The first possibility involves reforming the WTO from within. Under this scenario, member states would retain the existing institutional framework while updating its rules to reflect contemporary realities. Such reforms would need to address issues that have become increasingly important since the WTO’s establishment, including digital trade, environmental sustainability, industrial subsidies, state capitalism, human rights considerations, and other policy areas that increasingly intersect with international commerce. Rather than abandoning multilateralism, this approach seeks to restore its legitimacy through institutional adaptation.

The second scenario envisions a more decentralized architecture built upon cooperation among major regional trade organizations. Professor Jones referred to the possibility of closer coordination between entities such as the European Union, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), ASEAN, Mercosur, and other regional frameworks. Together, these institutions could potentially create a networked system of global trade governance even if universal consensus within the WTO remains difficult to achieve. Such an arrangement would preserve many benefits of international cooperation while recognizing the growing importance of regional economic integration.

A third possibility involves greater reliance on plurilateral agreements among smaller groups of willing WTO members. Rather than requiring unanimous agreement from all 166 members, subsets of countries could negotiate agreements concerning specific policy areas while remaining within the broader WTO framework. This flexible approach might allow progress where comprehensive multilateral negotiations have stalled. However, Professor Jones also acknowledged that even such reforms encounter procedural difficulties because changes to WTO decision-making itself frequently require the very consensus that has become increasingly difficult to achieve.

Between National Sovereignty and International Cooperation

Underlying Professor Jones’s discussion of institutional reform was a broader normative question concerning the relationship between national sovereignty and international cooperation. Throughout the lecture, he challenged simplistic portrayals that treat these objectives as fundamentally incompatible. Instead, he argued that the post-war trading system historically succeeded precisely because it reconciled sovereign decision-making with collectively negotiated rules.

The contemporary challenge, therefore, is not to choose between national autonomy and multilateral governance but to redefine their relationship under conditions of intensified geopolitical competition and domestic political polarization. Governments understandably seek greater resilience, economic security, and strategic autonomy in an increasingly uncertain international environment. Yet if every state pursues these objectives exclusively through unilateral action, the resulting fragmentation may ultimately undermine the stability upon which international prosperity depends.

Professor Jones thus encouraged participants to think beyond immediate political controversies and consider the longer-term institutional consequences of contemporary policy choices. Trade agreements are not simply technical economic arrangements; they are political compacts reflecting shared commitments concerning cooperation, reciprocity, and peaceful conflict resolution. Their durability ultimately depends upon maintaining public confidence that international institutions continue to serve broadly legitimate purposes.

Concluding Reflections

Professor Kent Jones’s lecture offered participants an intellectually rich and theoretically sophisticated examination of one of the defining challenges confronting the contemporary international order: the growing politicization of international trade. By integrating insights from international economics, institutional theory, political science, and the study of populism, he demonstrated that current disputes surrounding tariffs, trade wars, and WTO reform cannot be understood solely through economic analysis. Instead, they reflect a deeper transformation in the political foundations of international cooperation itself.

A particularly important contribution of the lecture was its insistence that institutional legitimacy lies at the heart of contemporary trade governance. While tariffs and commercial negotiations often dominate public attention, Professor Jones showed that the more fundamental issue concerns whether governments remain willing to accept collectively negotiated rules as legitimate constraints upon unilateral action. Once that shared commitment begins to erode, the effectiveness of even the most carefully designed institutions becomes increasingly uncertain.

Equally significant was his demonstration that populism operates not merely as an electoral phenomenon but as a force capable of reshaping the operation of international institutions. By framing multilateral organizations as instruments of distant elites rather than expressions of mutually beneficial cooperation, populist leaders alter public perceptions of international governance itself. Trade policy consequently becomes embedded within wider struggles over sovereignty, democratic representation, national identity, and political legitimacy.

At the same time, Professor Jones avoided both nostalgia for an idealized past and pessimism about the future. His historical analysis acknowledged that the WTO has long confronted structural challenges arising from expanding membership, increasingly complex negotiations, and changing patterns of global economic power. Trump’s second presidency has undoubtedly intensified these pressures, but it has not created them from nothing. Recognizing this longer historical trajectory enables a more balanced assessment of both the institution’s vulnerabilities and its continuing strengths.

Perhaps the lecture’s most enduring message was that international institutions survive not because they eliminate political disagreement but because they provide legitimate frameworks through which disagreement can be managed peacefully and predictably. The future of the multilateral trading system will therefore depend less upon technical revisions of tariff schedules than upon rebuilding the political trust and collective intentionality that originally made rules-based cooperation possible.

For participants in the ECPS Academy Summer School, Professor Jones’s lecture offered far more than an overview of contemporary trade policy. It provided a comprehensive framework for understanding how globalization, populism, democratic politics, and institutional legitimacy have become increasingly interconnected in the twenty-first century. At a time when international cooperation is being tested by rising geopolitical competition, economic nationalism, and ideological polarization, his analysis served as a timely reminder that the future of global governance ultimately depends not only on economic interests but also on the shared political commitment to sustain institutions capable of mediating them.

The sea port of Barcelona in Spain.

ECPS Academy Summer School 2026 – Prof. Arlo Poletti: The Evolution of EU Trade Policy and the Global Trade Order

How has the European Union’s trade policy evolved from championing liberal multilateralism to pursuing strategic autonomy in an era of geopolitical rivalry? In his opening lecture at the ECPS Academy Summer School 2026, “Europe Between Oceans: The EU in the Age of Geoeconomics, Populism, and Strategic Competition,” Professor Arlo Poletti examines the historical transformation of EU trade policy against the backdrop of globalization, China’s rise, populist contestation, and the growing weaponization of economic interdependence. Moderated by Dr. Sonali Chowdhry, the session demonstrates that contemporary trade policy can no longer be understood solely through the lens of market liberalization but must increasingly be viewed as an instrument of geopolitical strategy, economic resilience, industrial policy, and European strategic autonomy.

Reported by ECPS Staff

The accelerating transformation of the international political economy has fundamentally reshaped the role of trade in global affairs. Once understood primarily as a vehicle for market integration, economic efficiency, and multilateral cooperation, trade policy has increasingly become intertwined with geopolitical competition, technological rivalry, economic security, and democratic politics. The resurgence of great-power rivalry, the weaponization of economic interdependence, the fragmentation of global supply chains, and the rise of populist and nationalist movements have challenged many of the assumptions underpinning the post-war liberal trading order. As governments increasingly employ tariffs, industrial policy, sanctions, export controls, and investment screening as instruments of strategic statecraft, understanding contemporary trade policy requires a broader analytical perspective that integrates economics, international relations, and political science.

These developments provided the intellectual backdrop for the opening lecture of the ECPS Academy Summer School 2026, held under the theme “Europe Between Oceans: The EU in the Age of Geoeconomics, Populism, and Strategic Competition.” Bringing together leading scholars and participants from around the world, the programme explored how profound geopolitical, economic, and political transformations are reshaping Europe and the wider international order. Within this context, Professor Arlo Poletti delivered a wide-ranging lecture, “The Evolution of EU Trade Policy and the Global Trade Order,” examining how the European Union has evolved from one of the principal architects and defenders of the liberal multilateral trading system into an increasingly geoeconomic actor seeking to balance openness with resilience, strategic autonomy, and economic security. Combining insights from international political economy, European integration studies, and comparative political economy, Professor Poletti demonstrated that contemporary EU trade policy can no longer be understood solely through the lens of market liberalization but must increasingly be analyzed as an instrument of foreign policy, industrial strategy, and geopolitical influence. 

The session was thoughtfully moderated by by Dr. Sonali Chowdhry, Research Associate at DIW Berlin and Fellow at the Kiel Institute for the World Economy, whose own scholarship on global value chains, international trade, sanctions, and the distributional consequences of trade policy provided an ideal intellectual framework for the discussion. She observed that the rules-based multilateral trading order that had long provided the foundation for European prosperity could no longer be taken for granted. Rising geopolitical rivalry, intensifying technological competition with China, increasingly protectionist trade policies emanating from the United States, and the disruption of global energy markets following Russia’s invasion of Ukraine have collectively transformed the strategic environment within which European trade policy operates. 

She further explained that understanding Europe’s response requires looking beyond individual trade agreements or tariff disputes. Instead, participants needed to appreciate the historical trajectory through which European trade policy evolved—from an instrument primarily concerned with market liberalization into one increasingly intertwined with questions of industrial policy, technological competitiveness, economic resilience, and national security. This broader perspective, she argued, would enable participants to understand not only contemporary EU trade policy but also the wider transformations affecting the international economic order itself. 

By situating Professor Poletti’s presentation within the broader transformations affecting the global political economy, Dr. Chowdhry emphasized why the evolution of European trade policy has become central to understanding Europe’s strategic position in an era marked by intensifying geopolitical competition and growing uncertainty. Her moderation effectively established the conceptual foundations for a lecture that encouraged participants to rethink trade not merely as an economic policy domain, but as one of the principal arenas through which power, security, and international order are increasingly contested. 

Understanding EU Trade Policy as an Interaction of Institutions, International Structure, and Domestic Politics

Professor Arlo Poletti.
Arlo Poletti is a Professor of International Relations at the Department of Sociology and Social Research of the University of Trento.

Professor Poletti began by proposing a conceptual framework through which the entire historical evolution of European trade policy could be understood. Rather than presenting trade policy as a sequence of isolated policy choices, he argued that its development reflected the interaction of three fundamental dimensions: the institutional architecture governing European trade policy, the changing international environment, and the domestic political coalitions shaping policy preferences. 

Although institutional rules have evolved over time, Professor Poletti explained that they have remained relatively stable compared to the profound transformations experienced by international politics and domestic political competition. Consequently, while institutional arrangements provide the structural foundation for European trade policy, it is primarily shifts in the international distribution of power and changes in domestic political conflict that explain the major strategic transformations observed over the past seven decades.

He therefore encouraged participants to think historically rather than episodically. Trade policy, in his view, represents the product of continuous interaction between relatively stable institutional structures and dynamic political and economic environments. Understanding this interaction, he argued, allows scholars to explain why the European Union has repeatedly redefined its external economic strategy while preserving many of its institutional foundations.

The Institutional Foundations of European Trade Power

Before turning to the historical evolution itself, Professor Poletti briefly examined the institutional foundations that have historically made the European Union one of the world’s most influential trade actors.

He identified three institutional characteristics that have consistently strengthened the Union’s negotiating position. First, trade policy has constituted a supranational competence almost since the very beginning of European integration. Member states delegated authority to negotiate external trade agreements to the European Commission, thereby allowing Europe to speak with a single voice in international negotiations. This institutional arrangement significantly enhanced Europe’s bargaining power compared with what individual member states could have achieved independently. 

Second, the creation of a common external tariff transformed the European Community—and later the European Union—into one of the largest integrated markets in the global economy. Market size itself became a powerful source of leverage. Foreign governments seeking access to the European market faced strong incentives to negotiate with European institutions, enhancing the Union’s capacity to influence international trade rules.

Finally, Professor Poletti discussed what scholars have described as the “paradox of weakness.” Although European trade negotiations require extensive consensus among member states and often involve complex decision-making procedures with multiple veto points, this apparent institutional rigidity has paradoxically strengthened the Union’s negotiating position internationally. Because European negotiators are constrained by member-state mandates, foreign governments often recognize that the Commission has limited flexibility during negotiations. Rather than weakening the Union, this constrained bargaining position has frequently increased its credibility and leverage.

From Embedded Liberalism to Globalization: The European Union as a Regime Shaper

Having established the institutional foundations of European trade policy, Professor Poletti proceeded to examine the historical circumstances under which the European Union emerged as one of the principal architects of the post-war liberal trading order. He argued that the trajectory of European trade policy cannot be understood without first appreciating the broader political and economic settlement that emerged after the Second World War. Rather than viewing trade liberalization as an isolated economic objective, policymakers embedded it within a wider institutional architecture designed simultaneously to promote economic openness, domestic stability, and international peace. 

Professor Poletti explained that the postwar international order rested upon what political economist John Ruggie famously described as “embedded liberalism.” Unlike the laissez-faire globalization of the late 19th century, the post-1945 order sought to reconcile international market openness with governments’ capacity to pursue domestic social protection and macroeconomic stability. International trade was therefore promoted not as an end in itself but as one component of a broader political compromise that recognized the legitimacy of state intervention while preventing the return of destructive economic nationalism.

Within this emerging international framework, Western Europe became one of the principal beneficiaries of expanding multilateral trade. The creation of the European Economic Community complemented rather than challenged the General Agreement on Tariffs and Trade (GATT). Professor Poletti emphasized that European integration itself should be understood as a regional manifestation of the broader liberal international order, with both projects reinforcing one another through reciprocal commitments to openness, rules-based cooperation, and institutionalized dispute resolution.

Rather than pursuing protectionism, European governments increasingly viewed economic interdependence as a source of prosperity and political stability. Trade liberalization reduced barriers among member states while simultaneously strengthening Europe’s position within the broader multilateral trading system. This institutional convergence, Professor Poletti argued, allowed Europe gradually to evolve from a collection of national economies into one of the world’s most influential commercial actors.

Trade Policy as Foreign Policy

Professor Poletti noted that European trade policy gradually acquired significance beyond commercial negotiations alone. As European integration deepened, access to the common market became an increasingly valuable diplomatic resource that allowed the European Community—and later the European Union—to project influence well beyond its borders.

Trade agreements increasingly incorporated political conditionality, regulatory convergence, environmental provisions, labor standards, and development objectives. Commercial policy thus became an important instrument of external governance through which the European Union sought to diffuse its regulatory preferences internationally. This gradual expansion of policy objectives reflected Europe’s growing confidence in the attractiveness of its own institutional model. Rather than relying upon traditional military power, the European Union increasingly exercised influence through economic incentives and regulatory standards. Professor Poletti observed that access to the European market became one of the Union’s most powerful foreign policy instruments, encouraging neighboring countries and trading partners alike to adopt European regulatory norms.

This process, frequently described as the “Brussels Effect,” enabled the European Union to shape global markets even without formal international agreements. Firms seeking access to Europe’s large consumer market often adopted European standards voluntarily, subsequently applying those standards globally because maintaining multiple regulatory systems proved economically inefficient.

The European Union as a Defender of Multilateralism

European Commission headquarters with waving EU flags in Brussels. Photo: Viorel Dudau.

Professor Poletti argued that throughout much of the post-Cold War period the European Union increasingly came to view itself as the principal defender of the multilateral trading order. While the United States had initially played the dominant leadership role during the creation of GATT, Europe gradually assumed greater responsibility for maintaining and expanding international trade institutions.

The establishment of the World Trade Organization (WTO) in 1995 represented the culmination of decades of multilateral cooperation. Unlike GATT, the WTO created stronger legal mechanisms for dispute settlement, broader institutional competencies, and more comprehensive commitments covering services, intellectual property, and investment-related measures. Professor Poletti emphasized that the European Union enthusiastically supported this institutional strengthening because multilateral rules protected medium-sized powers by reducing arbitrary exercises of economic power by larger states.

For Europe, multilateralism was never merely an abstract normative preference. It served concrete strategic interests. A predictable, legally binding trading system protected export-oriented European economies while reducing uncertainty for firms deeply integrated into global production networks. Stable rules also prevented major powers from using unilateral economic coercion to secure political concessions.

Consequently, throughout the 1990s and early 2000s, European trade policy remained firmly committed to expanding and deepening the multilateral trading order. Successive enlargements of the European Union reinforced this orientation, bringing additional member states into a shared institutional framework built around openness, legal predictability, and international cooperation.

Globalization and the Expansion of European Trade

Professor Poletti then situated European trade policy within the broader acceleration of globalization that characterized the final decades of the twentieth century. Falling transportation costs, advances in information technology, financial liberalization, and the fragmentation of production processes transformed the structure of the world economy. Trade increasingly consisted not simply of finished products crossing national borders but of complex global value chains in which production stages were distributed across multiple countries. European firms became deeply embedded within these international production networks, relying upon cross-border investment, intermediate goods, and integrated supply chains.

This transformation substantially altered the political economy of trade. Large multinational firms became increasingly supportive of trade liberalization because their competitiveness depended upon efficient international production networks. Export-oriented industries similarly benefited from expanding foreign market access. Professor Poletti observed that under these conditions, globalization appeared largely compatible with both European economic interests and broader political objectives. The dominant policy consensus therefore viewed further liberalization as both economically efficient and politically desirable.

Emerging Political Tensions beneath the Surface

Yet Professor Poletti cautioned participants against interpreting this period as one of uncontested globalization. Even while international trade expanded rapidly, underlying political tensions gradually accumulated within many advanced industrial democracies. The benefits of globalization were distributed unevenly across regions, industries, and social groups. Highly skilled workers, internationally competitive firms, and urban export-oriented regions often experienced substantial gains. Conversely, workers employed in import-competing industries, economically vulnerable regions, and sectors exposed to international competition frequently experienced economic insecurity, employment losses, or stagnant wages.

Although these distributional tensions remained politically manageable for much of the 1990s, Professor Poletti argued that they gradually eroded domestic support for trade liberalization. Economic globalization increasingly became associated—not universally but among significant segments of the population—with deindustrialization, inequality, declining economic security, and reduced national policy autonomy.

Importantly, these emerging tensions did not initially transform European trade policy itself. Institutional commitments to multilateralism remained robust, and mainstream political parties largely continued supporting economic openness. Nevertheless, Professor Poletti suggested that the foundations of the postwar liberal consensus had begun to weaken long before they became politically visible.

Domestic Politics and the Rise of Contestation

Professor Poletti emphasized that trade policy can never be understood independently from domestic political coalitions. Governments negotiate internationally, but they remain accountable to domestic constituencies whose preferences evolve over time. As globalization generated increasingly uneven outcomes, political entrepreneurs began mobilizing those left behind by economic transformation. New political cleavages emerged that extended beyond traditional divisions between labor and capital or left and right. Questions concerning globalization, national sovereignty, migration, identity, and international integration increasingly became interconnected within broader political conflicts. This development proved especially significant because it fundamentally altered the political context within which European trade policy operated. Whereas trade liberalization had previously attracted broad cross-party consensus, it now became increasingly contested by populist movements questioning both globalization and European integration itself.

Professor Poletti stressed that this transformation should not be understood merely as an economic phenomenon. Rather, it reflected the interaction of material grievances with broader political narratives concerning sovereignty, democratic accountability, and national identity. These domestic changes would eventually intersect with profound shifts in the international system itself, creating an environment fundamentally different from the one that had sustained Europe’s multilateral trade strategy for decades.

Professor Poletti had demonstrated that the European Union’s emergence as a regime-shaping trade power rested upon a unique historical constellation: a stable liberal international order, expanding globalization, broad domestic support for openness, and institutional mechanisms that amplified European bargaining power. Yet the very forces that had enabled this success were beginning to generate new political tensions whose consequences would become increasingly visible during the following decade. These developments, he suggested, marked the beginning of a much more contested era in which Europe’s longstanding commitment to liberal multilateralism would face unprecedented political and geopolitical challenges. 

The Crisis of the Liberal Trade Order and the Rise of Geoeconomics

Having traced the European Union’s emergence as one of the principal architects and defenders of the postwar liberal trading order, Professor Poletti turned to what he described as the most significant transformation in contemporary international political economy: the gradual erosion of the assumptions that had sustained globalization for more than three decades. The world that had allowed Europe to pursue trade liberalization as both an economic and political project, he argued, had fundamentally changed. The result was not merely an adjustment of trade policy but a profound reconceptualization of trade itself—from an instrument of economic integration into an increasingly strategic component of geopolitical competition. 

Professor Poletti emphasized that this transformation did not occur suddenly. Rather, it emerged through the interaction of multiple structural developments that gradually undermined confidence in the liberal international order. These included the changing distribution of global economic power, the rise of China as a systemic competitor, the weakening of multilateral institutions, growing skepticism toward globalization within advanced democracies, and the increasing tendency of states to view economic interdependence through the prism of national security rather than economic efficiency. Rather than representing isolated developments, these trends collectively altered the very logic underlying international trade governance.

China’s Rise and the Transformation of Global Competition

Photo: Shutterstock.

Among these developments, Professor Poletti identified the spectacular rise of China as perhaps the single most consequential structural change affecting the international economic system during the twenty-first century. China’s accession to the WTO in 2001 had originally been interpreted by many Western policymakers as confirmation that expanding economic integration would gradually encourage political liberalization and reinforce the rules-based international order. Economic engagement was expected to produce convergence—not only economically but eventually politically. Reality unfolded rather differently.

Professor Poletti explained that China’s remarkable economic transformation dramatically altered global patterns of production, investment, and technological competition without producing the anticipated political convergence. Instead, China’s state-capitalist model demonstrated that rapid economic modernization could coexist with strong state intervention, industrial policy, and centralized political authority. This development fundamentally challenged many assumptions underpinning the liberal trading system.

Unlike earlier emerging economies, China rapidly became both an indispensable trading partner and an increasingly formidable geopolitical competitor. European firms benefited enormously from access to Chinese markets and production networks, yet simultaneously faced growing competitive pressures from Chinese industrial expansion supported by extensive state intervention. The consequence was a growing tension between economic interdependence and strategic competition.

Professor Poletti stressed that European policymakers increasingly found themselves confronting a dilemma for which traditional trade policy offered few satisfactory solutions: how could Europe remain committed to open markets while responding to the strategic implications of China’s expanding technological, industrial, and geopolitical influence?

The Growing Politicization of Global Value Chains

A second major theme of Professor Poletti’s lecture concerned the transformation of global value chains from purely economic arrangements into objects of strategic political concern. For decades, increasingly fragmented international production had been celebrated as evidence of globalization’s efficiency. Firms located different stages of production wherever costs were lowest or capabilities strongest, creating highly integrated transnational production systems that substantially increased productivity. However, Professor Poletti argued that recent crises fundamentally altered perceptions of these global production networks.

The COVID-19 pandemic exposed the vulnerabilities associated with excessive dependence upon geographically concentrated supply chains. Medical equipment, pharmaceuticals, semiconductors, and numerous intermediate goods suddenly became difficult to obtain as production disruptions spread across international markets. Shortly thereafter, Russia’s invasion of Ukraine further demonstrated how energy dependence and commodity supply could become instruments of geopolitical coercion. These experiences fundamentally changed the political discourse surrounding globalization. Where policymakers had previously emphasized efficiency, they increasingly began discussing resilience. Where cost minimization had previously dominated policy debates, security of supply emerged as an equally important objective. Trade policy therefore became inseparable from broader discussions concerning economic security.

Professor Poletti observed that concepts such as friend-shoring, near-shoring, de-risking, and strategic resilience rapidly entered the vocabulary of both policymakers and scholars. Each reflected an important conceptual shift: globalization would no longer be evaluated solely according to economic efficiency but also according to geopolitical reliability.

Populism and the Domestic Politics of Trade

Professor Poletti next examined how international structural changes interacted with domestic political transformations across Europe and other advanced democracies. Trade policy, he emphasized, increasingly became entangled with broader political debates surrounding sovereignty, immigration, national identity, democratic accountability, and economic inequality. The globalization consensus that had characterized much of the 1990s and early 2000s gradually weakened as populist movements successfully mobilized constituencies who believed themselves disadvantaged by economic integration. 

Professor Poletti carefully distinguished between legitimate socioeconomic grievances and the political narratives through which these grievances were interpreted. Many communities genuinely experienced industrial decline, employment insecurity, or reduced economic opportunities resulting from structural economic transformation. Yet populist actors frequently reframed these complex developments through simplified political narratives that attributed responsibility to globalization, supranational institutions, international trade agreements, or political elites. 

Trade therefore ceased to function as a largely technocratic policy domain.Instead, it became highly politicized. Economic openness increasingly symbolized broader questions concerning national sovereignty and democratic control. This politicization significantly constrained policymakers’ room for maneuver. Whereas earlier governments often negotiated trade agreements with relatively limited public attention, contemporary trade negotiations increasingly generated intense political contestation. Professor Poletti suggested that understanding contemporary European trade policy requires recognizing this changing domestic political environment as much as the evolving international system.

The Decline of Multilateralism

Photo: Dreamstime.

Another central theme of the lecture concerned the weakening of the multilateral institutions that had previously governed international trade. Professor Poletti noted that the WTO experienced increasing difficulties in fulfilling its traditional functions. Negotiations under the Doha Development Round effectively stalled. Consensus among an expanding membership became increasingly difficult to achieve. Perhaps most significantly, the WTO’s dispute settlement mechanism encountered severe institutional paralysis following disagreements over judicial appointments. For a political entity such as the European Union—whose prosperity had long depended upon predictable international rules—this institutional weakening represented a profound strategic challenge.

Professor Poletti emphasized that Europe remained rhetorically committed to multilateralism. However, policymakers increasingly recognized that defending multilateral principles alone would prove insufficient if other major powers adopted more unilateral or coercive approaches. Consequently, European trade policy gradually began adapting to a world characterized by greater geopolitical competition and weaker international institutions. Rather than abandoning multilateralism altogether, Europe increasingly supplemented multilateral commitments with bilateral trade agreements, new defensive instruments, and broader industrial policy initiatives.

Strategic Autonomy as a New Policy Paradigm

Professor Poletti devoted considerable attention to the emergence of strategic autonomy as perhaps the defining concept shaping contemporary European economic policy. He explained that strategic autonomy should not be interpreted as economic isolation or protectionism. Rather, it reflects an effort to preserve openness while simultaneously reducing excessive dependence upon potentially unreliable external partners. The objective is therefore selective resilience rather than comprehensive disengagement. 

This distinction, Professor Poletti argued, is crucial. Europe remains deeply integrated within the global economy. Its prosperity continues to depend upon international trade, investment, and technological exchange. Yet policymakers increasingly acknowledge that complete dependence upon external suppliers in strategically important sectors creates vulnerabilities that cannot be ignored. Strategic autonomy therefore seeks to reconcile two objectives that increasingly appear in tension: i) maintaining economic openness; and ii) strengthening geopolitical resilience. Professor Poletti suggested that this balancing act will likely define European trade policy for years to come.

From Liberal Trade Policy to Geoeconomic Statecraft

Perhaps the most important conceptual contribution of Professor Poletti’s lecture was his argument that Europe is witnessing not merely a revision of trade policy but a broader transformation toward geoeconomics. Trade, investment, technology, industrial policy, export controls, sanctions, and supply-chain governance increasingly operate as interconnected instruments of strategic competition. Economic policy itself has become an instrument of foreign policy.

Professor Poletti emphasized that this transformation does not necessarily imply abandoning liberal economic principles. Rather, it reflects recognition that economic relations now operate within a far more competitive geopolitical environment than the one that characterized the immediate post-Cold War decades. Consequently, policymakers must simultaneously pursue prosperity, security, resilience, and political influence. These objectives often complement one another—but increasingly they also generate difficult trade-offs.

Throughout this section of the lecture, Professor Poletti encouraged participants to move beyond simplistic binaries opposing free trade and protectionism. The more significant transformation, he argued, concerns the changing purposes assigned to trade policy itself. Where European trade policy once primarily sought efficiency, market access, and rule-based cooperation, it must now also address technological rivalry, supply-chain resilience, industrial competitiveness, economic coercion, and geopolitical uncertainty. This evolution represents one of the most important structural transformations currently reshaping both the European Union and the international political economy more broadly.

The European Union’s Emerging Geoeconomic Toolbox

In the concluding substantive part of his lecture, Professor Poletti examined how the European Union has begun translating its changing understanding of international political economy into concrete policy instruments. Having demonstrated that trade policy has evolved from a predominantly liberalizing enterprise into an increasingly strategic one, he explained that this conceptual transformation has been accompanied by the gradual development of a new geoeconomic toolkit. These instruments, he argued, reflect Europe’s attempt to reconcile its long-standing commitment to an open global economy with the realities of an increasingly competitive and fragmented international system. 

Professor Poletti emphasized that this policy evolution should not be interpreted as a wholesale abandonment of liberal trade principles. Rather, it represents an effort to update the Union’s external economic strategy to meet challenges that did not exist when the contemporary multilateral trading system was established. In today’s international environment, governments increasingly employ economic instruments not simply to pursue prosperity but also to advance geopolitical objectives, secure technological leadership, protect critical infrastructure, and influence the strategic behavior of other states. Against this backdrop, the European Union has sought to develop instruments capable of responding to economic coercion while remaining broadly consistent with its preference for rules-based international cooperation.

One of the most notable developments discussed during the lecture was the adoption of the Anti-Coercion Instrument, designed to provide the European Union with mechanisms to respond collectively when third countries seek to pressure individual member states through economic means. Professor Poletti explained that this initiative reflects lessons drawn from recent international experiences, particularly instances in which economic dependence was deliberately weaponized to influence sovereign political decisions. The emergence of such instruments illustrates how economic security has become inseparable from broader questions of European strategic autonomy. Rather than assuming that commercial interdependence automatically generates political stability, policymakers increasingly recognize that asymmetric dependencies can themselves become sources of vulnerability.

Balancing Openness and Security

Throughout this part of the lecture, Professor Poletti repeatedly returned to what he identified as the central dilemma confronting contemporary European policymakers: how can Europe remain one of the world’s most open economies while simultaneously protecting itself against strategic risks? He argued that simplistic solutions—whether complete protectionism or unrestricted globalization—fail to capture the complexity of today’s international environment. Europe’s prosperity continues to depend fundamentally upon international trade, investment, technological exchange, and participation in global production networks. Attempts to disengage from globalization entirely would therefore impose enormous economic costs and undermine European competitiveness.

At the same time, recent crises have demonstrated that excessive dependence in strategically sensitive sectors may expose governments to unacceptable political and economic risks. The challenge, Professor Poletti suggested, lies not in choosing between openness and security but in designing policies capable of balancing both objectives simultaneously. This balancing exercise increasingly shapes European debates concerning semiconductors, artificial intelligence, digital infrastructure, critical raw materials, pharmaceuticals, energy security, telecommunications, and advanced manufacturing. Across these sectors, policymakers are seeking to strengthen resilience without undermining the economic benefits generated by international integration.

Professor Poletti emphasized that such decisions inevitably involve difficult political trade-offs. Measures that improve resilience frequently impose higher economic costs. Conversely, policies maximizing efficiency may increase geopolitical exposure. Contemporary trade policy therefore requires continuous negotiation between competing priorities rather than straightforward pursuit of a single objective.

Industrial Policy Returns to the Center of European Strategy

Another significant theme concerned the renewed importance of industrial policy within the European Union. For much of the post-Cold War era, industrial policy occupied a relatively modest place within mainstream European economic thinking. Market competition, regulatory harmonization, and trade liberalization were generally viewed as the principal drivers of competitiveness. Professor Poletti argued that this intellectual consensus has shifted considerably. Governments increasingly recognize that technological leadership, innovation capacity, and industrial resilience cannot always be left exclusively to market forces, particularly when competing powers actively employ industrial subsidies, state investment, and strategic planning. The European Union’s recent industrial initiatives therefore represent not merely economic policy but components of a broader geoeconomic strategy.

Professor Poletti cautioned, however, against viewing industrial policy simply as a return to traditional state intervention. Contemporary industrial strategy seeks to strengthen technological competitiveness while remaining compatible with European competition rules, environmental objectives, and international commitments. Achieving this balance remains one of the central policy challenges confronting the Union.

Europe’s Position Between the United States and China

Photo: Dreamstime.

Professor Poletti also reflected on Europe’s increasingly delicate position between the world’s two largest economic powers. Unlike the Cold War bipolar system, today’s international economy remains characterized by deep commercial interdependence even as geopolitical rivalry intensifies. Europe consequently faces pressures from multiple directions. The United States increasingly encourages closer coordination among democratic allies in areas such as technology controls, investment screening, and supply-chain security. China remains simultaneously an indispensable economic partner, a major export market, an important source of investment, and an increasingly significant strategic competitor.

Professor Poletti argued that navigating these overlapping relationships requires a high degree of strategic flexibility. Rather than aligning unconditionally with either pole, the European Union seeks to preserve its own capacity for independent decision-making while maintaining productive economic relationships with both. This aspiration partly explains the growing emphasis placed upon strategic autonomy throughout recent European policy documents.

Conclusion

Professor Arlo Poletti concluded his lecture by demonstrating that the evolution of European Union trade policy reflects far more than successive changes in commercial strategy. Rather, it mirrors the transformation of the international political economy itself. From the postwar embedded liberal order through the expansion of globalization to today’s era of geopolitical rivalry and geoeconomic competition, European trade policy has continuously adapted to changing domestic, institutional, and international conditions.

A central message of the lecture was that the European Union’s identity as a trade power has fundamentally evolved. While Europe remains committed to international openness and multilateral cooperation, these objectives are increasingly pursued alongside concerns for resilience, strategic autonomy, technological competitiveness, and economic security. Trade policy has therefore become inseparable from broader questions of foreign policy, industrial strategy, and geopolitical positioning.

Professor Poletti cautioned against simplistic narratives portraying either globalization or deglobalization as inevitable historical trajectories. Instead, he encouraged participants to recognize that the current period is characterized by selective reconfiguration rather than wholesale retreat from international economic integration. The challenge confronting Europe is not whether to participate in globalization but how to shape globalization under conditions of growing strategic competition.

In sum, the lecture offered participants a sophisticated framework for understanding one of the defining transformations of contemporary international political economy. By integrating institutional analysis, historical development, domestic political dynamics, and geopolitical change, Professor Poletti demonstrated that European trade policy now occupies the intersection of economics, security, and global governance. His presentation underscored that the future of the European Union’s external economic strategy will depend upon its ability to preserve the benefits of openness while developing the resilience necessary to navigate an increasingly uncertain and contested international order. Under Dr. Sonali Chowdhry’s thoughtful moderation, the session provided participants with both a rich historical perspective and an analytical toolkit for understanding how trade has become one of the principal arenas through which power, security, and political authority are exercised in the twenty-first century. 

Greece protests.

From Economic Crisis to Democratic Backsliding: Evidence from Thailand, Argentina, the United States, and Greece

Please cite as:
Kalaitzidis, Akis. (2026). “From Economic Crisis to Democratic Backsliding: Evidence from Thailand, Argentina, the United States, and Greece.” Journal of Populism Studies (JPS). July 06, 2026. https://doi.org/10.55271/JPS000127



Abstract

Economic crises often serve as incubators of populism. When currencies collapse, or debts spiral out of control, mainstream parties lose credibility, creating openings for leaders who claim to defend “the people” against distant elites. The cases of Thailand, Argentina, the United States, and Greece illustrate how crises enable populism, how populists frame economic struggles, and use them to subvert the political order. In Thailand, the 1997 Asian Financial Crisis led to IMF-imposed reforms that hurt the rural poor. Thaksin Shinawatra rose on a populist platform of cheap healthcare and rural development, casting himself as defender of the countryside against Bangkok elites (Phongpaichit & Baker, 2009). In Argentina, the 2001–2002 default discredited neoliberal economic policies. Néstor and Cristina Kirchner mobilized popular anger against the IMF and creditors, mixing subsidies and protectionism with nationalist rhetoric (Levitsky & Murillo, 2008). In the United States, the 2008 financial crash produced dual populist currents: the Tea Party and Donald Trump on the right, and Occupy Wall Street and Bernie Sanders on the left, both targeting elites, including Wall Street and the Washington establishment (Skocpol & Williamson, 2012; Frank, 2016). In Greece, Syriza rose during the Eurozone crisis, opposing austerity and demanding sovereignty from the EU “Troika” (Pappas, 2019). Across these cases, populists reframed abstract economic shocks as moral struggles, pitting ordinary people against elites, technocrats, or foreign powers (Mudde & Rovira Kaltwasser, 2017). Their policies emphasized immediate relief—subsidies, redistribution, debt resistance—over fiscal orthodoxy. Yet each also confronted the hard limits of global capitalism, leading to compromise, backlash, or renewed instability (Dornbusch & Edwards, 1991; Kahler & Lake, 2013). Economic crises highlight the tension between national democracy and global markets; populism thrives in this gap, using it to decay institutions and norms in democratic states. I argue that economic crises lead to democratic backsliding.

Keywords: Populism, Economic Crises, Democratic backsliding, Greece, USA, Thailand, Argentina

By Akis Kalaitzidis[1]

Do economic crises necessarily lead to democratic backsliding? My argument in this paper is that it does. Economic crises lead to increased populism, which ultimately erodes public confidence in the political system and degrades not only democratic regimes (Levitsky & Murillo, 2008) but also authoritarian ones (O’Donnell, 1999; Schedler, 2013). Bunce and Wolchik (2011) argued that the exclusionary populist politics of Slobodan Milosevic destroyed the multicultural authoritarian regime in Yugoslavia. Others have argued it is not necessarily the economic crises that produce populism but the conflict between the “winners and losers” of said economic crisis, which increases the feeling of loss among the many, something in conflict studies we call the Relative Deprivation thesis (Gurr, 1970). Others argue that it is race and status that are responsible for the increasing populism worldwide (Palmer, 2019). Finally, some blame global migratory patterns for being zero-sum, arguing that every newcomer is a net negative for the country that receives them (Palmer, 2019). 

Populist regimes are, par excellence, illiberal, argues Pappas (2019). In this sense, democracies decline step by step, embracing new institutional structures that undermine the preceding democratic ones and replace them with illiberal ones. Often personalistic, these new regimes create institutions closer to authoritarianism than to actual democracy and dominate their countries for a long time, for example, Hungary, Turkey, Argentina, etc. 

In this paper, I will examine four cases, in the order of the economic crises that affected them: Thailand in 1997, Argentina in 2001, the US in 2008, and Greece in 2015. It is my argument that economic crises arising from global economic dislocations and contagion (Desai, 2003) produce populist regimes that wreak havoc on established institutions and lead countries to political backsliding (Foa & Mounk, 2017). I will explain how populism works in light of severe financial crises, addressing the key elements such as a) its social base, b) the policies associated with the regime, c) its rhetoric, d) the organizational strategy of the regime, e) its leadership style, f) the mobilization associated with regime change, and finally, g) the legacy of each regime. 

Populism and Its Discontents

What is populism? And how does it affect different countries? Before I analyze my case studies, it is important to examine how these populist movements form and what they mean. Considering the variation in regimes and political cultures that produce populism, as well as the nebulousness of the concept, it is essential to define it as precisely as possible. Generically, the definition of populism is “a thin center ideology that considers society to be ultimately separated into two homogenous and antagonistic camps, ‘the pure people’ versus the ‘corrupt elite’ and which argues that politics should be an expression of the volonté générale (general will) of the people.” (Mudde & Kaltwasser, 2017). Although Ernesto Laclau (2005) argued that populism does not lead to authoritarianism, my research finds evidence to the contrary. In fact, using populism as an intermediary variable, one can see that economic crisis can lead to political backsliding that takes the form of authoritarianism (Thailand, the USA) or not (Argentina and Greece), depending on political culture. I agree with Laclau that populism is a form of politics, not an ideology, but unlike Laclau, I view populism as a challenge to democracy and argue it should be viewed as such. 

Benjamin Moffit describes the various approaches to defining the concept through the years with a) the ideational approach, b) the strategic approach, and c) the discussive performative approach (Moffit, 2020). The Ideational approach argues that populism is a worldview and an ideology. Populism, sure enough, increasingly appeals to even the younger generation and has made inroads in even the strongest liberal democracies. Roberto Stefan Foa and Yascha Mounk argue that there are signs of the deconsolidation of democracies across the board (Foa & Mounk, 2017). Americans have long been growing dissatisfied with the state of their political system. As survey researchers have chronicled over recent decades, an overwhelming majority of citizens now believe that the US is ‘headed in the wrong direction,” (Foa & Mounk, 2017). 

In Europe, the shock of Brexit was felt in the corridors of European capitals, and some decided to work against the established order. Several populist leaders, among them the leaders of Italy, Croatia, Slovakia, Hungary, and Bulgaria, made an extra effort to dismantle liberal justice requirements and regress their country’s democracy (The Guardian, 3.30.2026). It remains to be seen whether the trend of democratic backsliding can be reversed following Viktor Orbán’s decisive defeat. 

In general, there are two forms of backsliding according to Nancy Bermeo (2016: 6): “Backsliding can take us to different end points at different speeds. Where backsliding involves rapid and radical change across a broad range of institutions, it leads to outright democratic breakdown and to regimes that are unambiguously authoritarian.” In one of my cases, a complete deconsolidation of democracy happened with the end of a populist regime in Thailand. Essentially, the end of the Thaksin experiment was the rise of the Thai military. In the other three cases, the backsliding has been much more gradual, and in those cases, Bermeo argues: “Where backsliding takes the form of gradual changes across a broad range of institutions, it is less likely to lead to all-out regime change and more likely to yield political systems that are ambiguously democratic or hybrid” (Bermeo 2016: 6). In other words, illiberal democracies. 

The last three cases here, Argentina, the US, and Greece, experienced a decline in democratic values, with the US doing the heavy lifting under the Trump Administration. Yet, even in the mild cases of Greece and Argentina, we have seen a serious weakening of democratic institutions, thus “Democratic backsliding can thus constitute democratic breakdown or simply the serious weakening of existing democratic institutions for undefined ends. When backsliding yields situations that are fluid and ill-defined, taking action to defend democracy becomes particularly difficult,” (Bermeo, 2016:6). So as Palacios (2025: 1832) notes, “a large body of studies has found that populism ‘in the real world’ also has detrimental effects on the quality of democracy. Due to their ambiguous relationship with democracy, once in power, many populist forces adopt an agenda of institutional change that seeks to better approximate their illiberal democratic ideals to the practice.” 

What I argue in this paper is that populism transforms economic woes into political and, especially, moral conundrums, pitting parts of society against one another for the benefit of the leadership. The result of populism’s divisiveness is frequent democratic backsliding, as seen in Thailand, where it led to a coup d’ etat against Thaksin and renewed authoritarianism. In Greece, the collapse of the party system and increased violence among people, and in the US, the establishment of an authoritarian pronged leadership. Only in Argentina have the populists from the left been replaced by the populists of the right, with no discernible end to their economic woes.

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[1] Akis Kalaitzidis is a Professor of Political Science at the Department of Government, Law, and International Affairs, University of Central Missouri. Email: kalaitzidis@ucmo.edu

Özgür Özel, leader of Turkey’s main opposition CHP and a recent target of political judicial intervention, attends the inauguration of a cultural center named after the late Manisa Metropolitan Mayor Ferdi Zeyrek. Photo: Idil Toffolo / Dreamstime.

Turkey’s Managed Permanence: Lawfare, Institutional Capture, and the End of Democratic Uncertainty

In this timely and deeply analytical essay, Professor Ibrahim Ozturk examines how Turkey is moving beyond competitive authoritarianism toward what he terms a system of “managed permanence,” in which elections formally survive while meaningful democratic alternation becomes increasingly constrained. Focusing on the judicial intervention into the CHP, the encirclement of opposition municipalities, media capture, and the erosion of institutional autonomy, Professor Ozturk argues that the Erdoğan regime is no longer merely repressing opposition actors, but actively re-engineering the political field itself. The essay further explores how lawfare, economic fragility, transactional geopolitics, and institutional decay have become mutually reinforcing dynamics. Ultimately, the piece warns that Turkey’s crisis is no longer only democratic or economic, but fundamentally a crisis of institutional credibility and constitutional uncertainty.

By Ibrahim Ozturk

When Hungary’s 2026 elections produced an early wave of enthusiasm around the idea that “dictators, too, can be defeated,” the reaction was understandable but premature. In a recent ECPS long-read commentary on Péter Magyar and Hungary’s hybrid-authoritarian rupture, I warned against romanticizing Orbán’s defeat as automatic democratic restoration, and stressed that comparative analogies travel badly: what may be cooking in the neighbor’s house does not necessarily fall onto our plate — Turkey is not Hungary, and each authoritarian case rests on its own institutional, geopolitical, social, and economic architecture. 

Turkey has now confirmed that warning with brutal speed. Before the optimism generated by Hungary’s rupture could settle into a broader democratic lesson, Ankara moved in the opposite direction: the main opposition was judicially destabilized, municipal autonomy was further encircled, a major university’s operating license was revoked, and the already fragile boundary between competitive authoritarianism and managed permanence narrowed even further. The message is unmistakable: authoritarian regimes may sometimes lose elections, but they do not necessarily accept political contingency — and in Turkey’s case, the regime appears determined to prevent meaningful alternation before it can happen.

Thus, Turkey has entered a new and more dangerous phase of competitive authoritarianism. The issue is no longer confined to the imprisonment of opposition figures, the removal of elected mayors, or the selective deployment of criminal investigations. The deeper transformation now concerns the legal and institutional re-engineering of the opposition itself. The court decision annulling the Republican People’s Party (CHP)’s 2023 congress—effectively removing Özgür Özel and reinstating Kemal Kılıçdaroğlu as party leader—marks a qualitative escalation: the judiciary is no longer merely disciplining opposition actors from the outside; it is intervening directly in the internal sovereignty of the main opposition party. Reuters reported that the ruling annulled the CHP’s 2023 leadership election, suspended Özel and the party executive, and reinstated Kılıçdaroğlu, while the CHP’s elected executives denounced the decision as a judicial coup.

In Turkish legal terminology, the concept of “absolute nullity” may appear technical. Politically, however, it functions as a mechanism of retroactive delegitimation. A past party congress is declared void; the current leadership is suspended; a former leadership is restored; and the organizational continuity of the opposition is plunged into legal uncertainty. The outcome is not merely a leadership change. It is the construction of a “lame-duck opposition”: formally present and electorally significant on paper, yet institutionally constrained, internally fragmented, and increasingly vulnerable to judicial veto.

From Electoral Defeat to Judicial Containment

The turning point came with the local elections of March 31, 2024. In those elections, the CHP delivered President Erdoğan and the AKP their most significant electoral defeat in decades, while retaining Istanbul and Ankara—long regarded as key opposition strongholds—and achieving major gains across the country. CHP secured approximately 37 percent of the nationwide vote, narrowly surpassing the AKP, and won municipalities in 36 of Turkey’s 81 provinces. The outcome was Erdoğan’s biggest electoral setback and Ekrem İmamoğlu had emerged as his “default nemesis.”

The result fundamentally altered the regime’s threat perception. The opposition was no longer merely a parliamentary minority or a symbolic protest bloc. It had acquired administrative capacity, access to local budgets, service-delivery networks, public visibility, and presidential contenders with nationwide appeal. İmamoğlu, Mansur Yavaş, and the renewed CHP leadership under Özgür Özel represented not only electoral competition, but the emergence of an alternative governing infrastructure.

The regime’s response has followed a recognizable authoritarian playbook: do not abolish elections outright; hollow them out. Do not ban the opposition; fragment, criminalize, and bureaucratically paralyze it. Do not formally dissolve local governments; restrict their fiscal instruments, remove or prosecute their elected leaders, and make every municipal decision vulnerable to criminalization. In this sense, the CHP ruling should not be read as an isolated party-law dispute. It is part of a strategy to convert the main opposition from an electoral threat into a controlled, divided, and procedurally disabled actor.

Lawfare and the Collapse of Rule of Law

The CHP case sits inside a wider pattern of lawfare against opposition mayors, party officials, journalists, lawyers, academics, and civil society actors. Freedom House’s 2026 assessment classifies Turkey as “Not Free,” with a score of 32 out of 100, including 16/40 for political rights and 16/60 for civil liberties. This is not a marginal decline. It signals a political system in which elections continue, but the freedoms necessary for meaningful electoral competition are structurally impaired.

The rule-of-law picture is equally severe. The World Justice Project’s 2025 Rule of Law Index places Turkey 118th out of 143 countries. Turkey also ranks near the bottom of its region and among upper-middle-income countries. The index measures constraints on government powers, absence of corruption, open government, fundamental rights, regulatory enforcement, civil justice, and criminal justice — precisely the institutional foundations now under stress in Turkey’s opposition cases.

This matters because authoritarianism in Turkey does not operate primarily through overt illegality. More often, it functions through excessive legality: sprawling investigations, procedural ambiguities, retroactive annulments, prolonged pre-trial detention, anonymous witnesses, and charges that are difficult to contest because the process itself becomes the punishment. In such a system, the courts do not need to formally ban the opposition as a political force. They can exhaust it, fragment it, delegitimize it, and keep it in a permanent state of defensiveness.

The logic is as coercive as it is punitive. Opposition figures are pressured through detention, threats to personal assets, indictments, reputational attacks, and the prospect of escalating sentences. Where evidentiary standards are weak or politically contested, mechanisms such as anonymous witnesses and “effective remorse” provisions can become instruments of narrative production: lower-level actors are pressured to implicate higher-ranking opposition figures, while refusal may expose both them and their families to further legal vulnerability. This is not merely prosecution; it is political extraction through criminal procedure.

Of course, the authoritarian acceleration did not begin with the most recent CHP case. It was dramatically intensified after the failed coup attempt of July 15, 2016, which the government used to consolidate emergency rule, neutralize the unresolved political consequences of the December17–25, 2013 corruption allegations, and restructure the judiciary, bureaucracy, media, and civil society under executive command. Many opposition actors, including the CHP, underestimated or tolerated the early stages of this process; today, as thousands of cases reach the European Court of Human Rights (ECtHR) under Article 7 and Article 3 concerns, the same emergency-state machinery has expanded from alleged Gülenists to Kurds, socialists, liberals, journalists, mayors, academics, and now the main opposition itself.

Capturing the Public Sphere

Judicial pressure becomes far more effective when it operates inside a captured information environment. Turkey’s media landscape is already deeply distorted. In the 2026 World Press Freedom Index, Reporters Without Borders (RSF) ranks Turkey 163rd out of 180 countries, with a score of 27.94. RSF’s country profile places Turkey in the “very serious” category and notes that media pluralism remains under severe pressure.

Media repression in Turkey has evolved beyond the traditional closure or capture of media outlets into a hybrid authoritarian system of digital censorship, where online news links and social media content are removed without effective judicial review on elastic grounds such as national security, public order, religious or family values, and the unity of the state, while those who escape imprisonment may still be silenced through account suspensions and platform-level restrictions.

This means that electoral competition is distorted not only through courts, prosecutions, and candidate bans, but also through unequal access to information. When opposition leaders are criminalized, government-aligned media amplify the accusations, while independent journalism operates under conditions of fear, fines, arrests, ownership pressure, and regulatory intimidation. Elections may still take place, but voters encounter the opposition through a public sphere heavily structured by executive power.

This is the contemporary version of “open voting, secret counting.” Today, the mechanisms are more sophisticated. The ballot may remain secret, and the counting process may remain formally observable, yet the media landscape, judiciary, party autonomy, local government capacity, candidate eligibility, and financial environment are all subjected to sustained political pressure. Elections survive as ritualized procedures; democratic alternation is rendered increasingly improbable.

Municipal Counter-Power and Administrative Encirclement

The The attack on the CHP is inseparable from the broader assault on opposition-run municipalities. After the 2024 local elections, Istanbul, Ankara, and other major cities represented not merely electoral victories, but alternative centers of political legitimacy. Municipal governments possessed the capacity to deliver services, develop their own patronage networks, expose failures of the central government, and cultivate presidential contenders with executive credibility.

This is why the restriction of municipal autonomy has become so consequential. Turkish media reports indicate that recent legal changes now require presidential approval for municipalities and their affiliated entities to establish companies, acquire shares, or join cooperatives. Opposition critics argue that these measures transform local economic initiative into a permission regime ultimately controlled by the presidency.

The corruption data help explain why this matters. Transparency International’s 2025 Corruption Perceptions Index (CPI) gives Turkey a score of 31/100, ranking it 124th out of 182 countries. The CPI is not simply about bribery; it is about discretionary public power, weak accountability, and the erosion of impartial administration. In Turkey’s case, this means that municipal resources, public tenders, regulatory approvals, media licensing, universities, and courts increasingly operate within a political economy of executive discretion.

The closure of Istanbul Bilgi University on the same political night adds another layer to this broader pattern. The Erdoğan regime revoked the university’s operational license, effectively forcing it to shut down, after the institution had already been seized by the state through a criminal investigation the previous year. Under Decree-Law No. 667, 15 private and foundation universities were closed in July 2016. This pattern later continued with the closure of İstanbul Şehir University in 2020 and the revocation of İstanbul Bilgi University’s operating license on May 21, 2026, effectively bringing another major academic institution to an end.

This pattern demonstrates that university autonomy—like municipal autonomy, media autonomy, and party autonomy—has increasingly become conditional on executive tolerance rather than protected by constitutional guarantees. Universities, municipalities, opposition parties, media outlets, and civil society organizations all represent potential alternative centers of legitimacy. The current trajectory seeks not necessarily to abolish all of them outright, but to render their survival contingent upon executive tolerance.

The Constitutional Horizon: Erdoğan’s Problem of Time

The deeper strategic horizon concerns the presidency itself. Erdoğan’s rule faces a constitutional time problem. Current constitutional provisions limit the presidency to two terms, although scenarios involving early elections and constitutional reinterpretations have long been debated. Erdoğan’s coalition partner, Devlet Bahçeli, has already floated the possibility of a constitutional amendment that would allow Erdoğan to extend his tenure beyond the existing limits. In 2024, Bahçeli openly proposed such an amendment, while also acknowledging that Erdoğan would otherwise be serving his final term unless early elections were called.

This is precisely why the organizational integrity of the opposition matters so much. A unified CHP under Özgür Özel, with Ekrem İmamoğlu or Mansur Yavaş as credible national contenders, would constitute a serious obstacle to any attempt to redesign the constitutional calendar. By contrast, a fragmented CHP operating under sustained judicial pressure provides the ruling bloc with greater room for maneuver. Under such conditions, the government can call early elections when the opposition is weakened, pursue constitutional changes within an asymmetric political environment, or manufacture the appearance of pluralist consent through a domesticated opposition.

The objective is not necessarily to abolish elections altogether. It is to eliminate uncertainty. Turkey is increasingly moving toward a model of managed permanence: the ballot box remains, but the possibility of democratic alternation becomes structurally disabled.

External Complicity: Europe’s Dependency and Trumpian Transactionalism

The external environment has facilitated this authoritarian acceleration in Turkey. The European Union remains rhetorically committed to democracy and the rule of law, yet its leverage over Turkey has steadily weakened. The European Commission continues to define Turkey as a candidate country and an essential partner on issues such as climate policy, migration management, security, counterterrorism, and trade. CEPS has similarly arguedthat EU–Turkey relations increasingly expose the limits of transactionalism, noting that bilateral engagement now extends across energy security, foreign and security policy, trade, counterterrorism, and defense connectivity amid growing uncertainty in transatlantic relations.

This dependence produces a familiar European dilemma: democratic values are invoked rhetorically, but meaningful conditionality remains weak. The EU may express concern, but concern alone does not impose political cost. Turkey’s strategic role in migration control, NATO, Russia policy, Black Sea security, Middle Eastern diplomacy, and regional energy corridors has created an external environment that is increasingly permissive of democratic backsliding.

The United States under Trump adds another layer of transactional permissiveness to this environment. This does not necessarily mean that Washington explicitly endorses every domestic crackdown carried out by the Erdoğan government. It does, however, suggest that Erdoğan is increasingly able to exchange geopolitical utility for international normalization. The German Marshall Fund cited remarks by US Ambassador Tom Barrack in 2025 indicating that Trump wanted to give Erdoğan what he needed — “legitimacy” — within the framework of a more transactional and deal-oriented bilateral relationship.

This pattern is hardly new in American foreign policy. Across the Middle East and Latin America, Washington has often found authoritarian partners easier to manage than democratic societies. The rhetoric of democracy promotion has frequently coexisted with the practical support of rulers who provide security cooperation, military access, migration control, energy stability, or regional alignment. Turkey now appears to be increasingly drawn into this older geopolitical pattern: a strategically useful authoritarian partner whose domestic repression is treated as secondary to broader strategic bargaining.

The Political Economy of Repression

Authoritarian continuity also carries mounting economic costs. Every major judicial or administrative intervention against the opposition produces immediate financial repercussions. Following Ekrem İmamoğlu’s arrest in March 2025, the Turkish central bank reportedly sold roughly $50 billion in reserves and subsequently raised interest rates to 46 percent amid severe market turbulence. The EBRD similarly stated that the central bank sold more than $40 billion in foreign exchange during the weeks after İmamoğlu’s detention, reducing net reserves excluding swaps from above $60 billion to below $20 billion.

A similar pattern re-emerged following the CHP ruling. BIST 100 index fell sharply, while the Turkish lira reached a record low near 45.74 against the US dollar. Analysts warned that renewed political instability was once again undermining the currency at an already fragile moment. JPMorgan further projected that the central bank could be forced to raise interest rates from 37 percent to 40 percent in an attempt to stabilize the lira.

Inflation remains the clearest macroeconomic symptom of collapsing credibility. In April 2026, Turkey’s monthly inflation rate surged to 4.18 percent, while annual inflation reached 32.37 percent. By comparison, the OECD projects average headline inflation across the G20 at approximately 4.0 percent in 2026. Turkey’s inflation is therefore not merely above target; it stands several times higher than the broader G20 benchmark.

These cumulative distortions are also visible in Turkey’s growing decoupling from comparable emerging-market economies. Both inflation and the interest-rate premium required to sustain lira-denominated assets have risen far above emerging-market averages, making borrowing costs one of the clearest macroeconomic expressions of authoritarian-risk pricing.

Foreign direct investment also reflects the cost of institutional erosion. World Bank-based data show Turkey’s FDI net inflows at only 0.887 percent of GDP in 2024. For a G20-sized economy that claims to be a regional hub for production, logistics, energy, and finance, this is strikingly weak. Investors may still buy high-yield bonds or short-term assets, but a durable, productive investment requires legal predictability, property-rights protection, judicial neutrality, and confidence that political shocks will not suddenly destroy the investment environment

There are also signs that Turkey’s liquid external buffers have come under mounting pressure. Reporting based on US Treasury data indicated that Turkey’s holdings of US Treasury securities fell sharply in March 2026 as authorities sought to defend the lira, although such figures should be treated cautiously, since holdings are often routed through custodians and third countries.

The broader point, however, is unmistakable: political repression carries significant balance-sheet costs. It necessitates reserve sales, interest-rate hikes, credibility-restoration measures, and repeated interventions aimed at containing market panic. Turkey is therefore not experiencing a conventional emerging-market volatility cycle. It is paying a compounded authoritarian-risk premium.

Repression undermines confidence; weakened confidence places pressure on the lira; pressure on the lira forces reserve depletion or higher interest rates; elevated rates suppress growth and investment; deteriorating economic performance intensifies political anxiety; and that anxiety, in turn, generates further repression. This is the circular political economy of authoritarianism.

Conclusion: The Cost of Managed Permanence

Turkey’s crisis is no longer merely a crisis of democracy, nor solely a crisis of macroeconomic management. It has become a crisis of institutional credibility. The same political system that imprisons rivals, captures media institutions, weakens municipalities, subordinates the judiciary, and intimidates universities also generates persistent inflation, currency fragility, reserve depletion, heightened corruption risk, and declining long-term investment confidence.

The CHP ruling is therefore not simply a procedural dispute within a political party. It is a constitutional event. It signals that the regime is prepared to intervene directly in the organizational structure of the main opposition party in order to reshape the political field ahead of the next presidential contest. The intended outcome is increasingly clear: Erdoğan should not confront a united, administratively capable, and electorally confident opposition at the precise moment when his own constitutional future becomes uncertain.

The irony is that this strategy may stabilize the regime in the short term while simultaneously deepening Turkey’s long-term fragility. No country can indefinitely finance authoritarian control through reserve depletion, high interest rates, coercive legality, and transactional diplomacy. The more the regime suppresses political competition, the more costly economic stabilization becomes. The more it seeks external legitimacy, the more sovereignty it implicitly trades away. And the more it attempts to manufacture a controlled opposition, the more clearly it reveals that genuine electoral competition has become the central threat to its survival.

Turkey’s crisis, therefore, is not only about Erdoğan, the CHP, İmamoğlu, Özel, Kılıçdaroğlu, or even the 2028 election itself. It is about whether a country with a long electoral tradition will gradually be reduced to a system of formal voting without meaningful democratic alternation. The answer will depend not only on domestic resistance, but also on whether Europe and the United States continue treating Turkey’s authoritarian consolidation as an acceptable price for strategic convenience.

Mark Corner

Ten Years on with Brexit / Prof. Corner: With Brexit, the UK Has Lost More Than It Has Gained

As the tenth anniversary of the Brexit referendum approaches, debate has shifted from slogans to evidence. In this interview, Professor Mark Corner offers a measured but clear conclusion: “the UK has lost more than it has gained.” Drawing on political economy, constitutional analysis, and historical perspective, he revisits Brexit not as a singular rupture but as a dual crisis affecting both the European Union and the internal cohesion of the United Kingdom. Professor Corner highlights the paradox at the heart of Brexit—“taking back control” did not strengthen parliamentary sovereignty, but instead elevated popular sovereignty. At the same time, expectations of global economic freedom have given way to the enduring realities of geography and interdependence. His reflections situate Brexit as a revealing case of the gap between political promise and institutional consequence.

Interview by Selcuk Gultasli

As the tenth anniversary of the Brexit referendum approaches, public debate has moved decisively beyond the binary language of Leave and Remain toward a more empirically grounded reckoning with Brexit’s long-term political and economic consequences. In this context, Professor Mark Corner, Emeritus Professor at the University of Leuven, offers a particularly valuable perspective. His work situates Brexit not simply as a rupture in Britain’s relationship with the European Union, but as a dual constitutional and political crisis—one affecting both the European project and the internal cohesion of the United Kingdom. Bringing together political economy, constitutional analysis, historical memory, and populist mobilization, his reflections illuminate how Brexit has reshaped not only policy but also political imagination.

In his interview with the European Center for Populism Studies (ECPS), Professor Corner advances a sober conclusion captured in the headline of this conversation: “With Brexit, the UK has lost more than it has gained.” That judgment is not presented as a dramatic slogan, but as the outcome of a broader reassessment now taking place in British public life. As he puts it, “most economists would agree that the UK has lost more than it has gained,” and if that were not so, “the present government would [not] be trying so hard to move back toward a closer economic relationship with the EU.” In this sense, Brexit appears less as a fulfilled promise of renewed sovereignty than as a strategic rupture whose costs have become increasingly difficult to deny.

Yet Professor Corner’s account is more layered than a narrow economic audit. He draws attention to one of the central ironies of Brexit politics: that a project framed around “taking back control” did not, in fact, restore parliamentary sovereignty. On the contrary, he argues, the referendum “assert[ed] popular sovereignty over parliamentary sovereignty,”since most MPs would have preferred to remain. Similarly, the promise that Britain could flourish once “freed from the shackles of the EU” has, in his view, been undermined by the enduring reality of geography, interdependence, and trade. The fantasy of becoming “Singapore-on-Thames” has largely faded, replaced by the quieter recognition that “a very large share of our trade is conducted with Europe.”

The interview also places Brexit within a broader political and historical frame. Professor Corner shows how populist and radical-right actors have successfully shifted the argument away from economic performance toward sovereignty, border control, and cultural identity. In doing so, they have helped transform British political conflict from an older class-based divide into a more complex terrain shaped by “social and cultural division alongside economic division.” At the same time, he warns that Brexit’s most profound destabilizing effects may ultimately be domestic rather than European. While the feared cascade of exits from the EU never materialized, the United Kingdom itself remains vulnerable to centrifugal pressures, particularly in Scotland and Northern Ireland. In his words, “in the long run, [these] may prove more troubling than the difficulties in the EU.”

In sum, Professor Corner’s reflections offer a penetrating and historically informed account of Brexit’s legacy. Far from vindicating the claims of its proponents, Brexit emerges here as a case study in the gap between populist promise and institutional consequence—one that continues to shape the future of Britain, Europe, and the politics of sovereignty itself.

Here is the edited version of our interview with Professor Mark Corner, revised slightly to improve clarity and flow.

Brexit Strains Britain More Than Europe

Professor Corner, welcome. In A Tale of Two Unions, you argue that Brexit must be understood simultaneously as a crisis of both the European Union and the British Union. Ten years on, how would you assess the relative degree of strain placed on each union, and has Brexit ultimately proven more destabilizing domestically than internationally?

Professor Mark Corner: I think it has. When the UK left in 2016, I remember seeing a book titled The EU: An Obituary.A lot of people thought that the UK’s departure would trigger a stampede. People began to talk about Nexit or Swexit after Brexit. But it didn’t happen. 

It is important to note that, despite all the recent difficulties with Hungary, it did not leave the EU. It was not expelled from the EU. Yes, pressure was brought upon it, and in the recent election, it got rid of Orbán. But all this has happened with Hungary remaining a member of the EU.

In the case of the UK, there is an instability built into the fact that it is effectively a multinational state: England, Wales, Scotland, and Northern Ireland. It seems to me that the UK has done very little to develop some kind of stable constitutional structure around which these different nations can coalesce. I think there are difficulties. The forthcoming elections next month will show that there are difficulties. In fact, there will quite possibly be a nationalist first minister in Scotland, similarly in Wales, and there already is Michelle O’Neill in Northern Ireland. So, there will be difficulties in the UK, and in the long run, they may prove more troubling than the difficulties in the EU.

Economic Reality Undercuts Sovereignty Claims

Your work highlights the tension between parliamentary sovereignty and supranational governance. To what extent does the post-Brexit economic record—particularly reduced trade and investment—challenge the political narrative that “taking back control” enhances state capacity?

Professor Mark Corner: There are certain ironies here. There was a great deal of talk about taking back parliamentary control in 2016. But in fact, the Brexit vote did the very opposite. If Parliament had had the authority to decide on Brexit, a majority of MPs were against it. Effectively, what the referendum did was to assert popular sovereignty over parliamentary sovereignty. Members of Parliament—most of whom would have preferred to remain—accepted that this popular vote must be binding. I think that was the correct decision. But it hardly amounted to strengthening parliamentary sovereignty. So, I am not sure Brexit really led to that. It strengthened an idea of popular sovereignty, and that is something about which there can be a number of questions. But I do not think it strengthened parliamentary sovereignty.

As for the trade arguments, the general view in the UK now is that Brexit has not been beneficial to trade. In 2016, many people had the idea that, freed from the shackles of the EU, we could go out and strike ambitious trade deals with the far corners of the world—a deal with Japan, a deal with India—we would be free, no longer moored to Europe. But the reality is that, even in the 21st century, geographical proximity remains crucial, and a very large share of our trade is conducted with Europe. You can see the present government trying, as far as it can, to nudge itself back toward a closer economic relationship with the EU. This is quite different from the atmosphere under Boris Johnson, with all the talk of becoming “Singapore-on-Thames”—the idea that Britain could roam the world and secure major trade deals simply by freeing itself from Europe. That notion has largely disappeared.

Policy Shifts Signal Economic Costs

If we move beyond rhetoric to measurable indicators—GDP performance, trade volumes, FDI, labor market shifts—how would you construct a balanced “Brexit scorecard”? Does the empirical record validate or undermine the core claims of Brexit proponents?

Professor Mark Corner: Scorecards differ, and economists always arrive at different figures. You know the saying that an economist is someone who, if you ask for a phone number, gives you an estimate.

I would have to speak in general terms: most economists would agree that the UK has lost more than it has gained. If that were not the case, I do not think the present government would be trying so hard to move back toward a closer economic relationship with the EU.

In the last few days, there has been discussion of whether the UK could align with EU rules without having to secure a vote in Parliament on every measure. That is, in political terms, a dangerous way to proceed, but it is being considered because, economically, the government perceives the scorecard as pointing toward as close an alignment as possible for the UK’s benefit. I do not think it would pursue this course otherwise.

Populists Shift Debate to Identity

How has populist discourse, particularly on the radical and far right, managed to reinterpret or neutralize the economic costs of Brexit by shifting emphasis toward sovereignty, identity, and cultural autonomy?

Professor Mark Corner: That is an important point to make: the arguments are not simply about whether Brexit is economically beneficial. They also involve these other questions, and even during the 2016 campaign there were people on the Remain side who said, look, we are talking too much in terms of economics alone—we should think more broadly.

There is no doubt that issues like immigration were a very important factor in precipitating the Brexit vote. The idea that the UK could take back control of its borders, decide who was going to come in if it left the EU, and thereby maintain its cultural identity and its sovereignty was a very powerful argument at the time, and that has to be recognized. At the same time, there are some very powerful arguments against that position. There is a strong case in favor of multicultural and multinational society that has been built up in the UK over the last 50 years, and I do not think that is emphasized enough.

Because I am old, I can go back to the 1960s and 1970s. At that time, there were arguments about admitting members of the former British Empire, and there was talk of an “Asian” or “Black” invasion—the language was very racist. Yet at that time there was actually net emigration from the UK, so there was no real issue of rising numbers. The only objection could have been that people did not like those who were not white coming in.

I do not see that in the 21st century. There is still racism, of course, but it is not like it was in the 1960s or 1970s. People generally accept that society is made up of many different cultural backgrounds, and that this is worthwhile—that it is a benefit.

There is, however, a different kind of problem, which is that overall numbers—irrespective of color or ethnic background—have been rising very quickly. Any country whose population is increasing rapidly year by year is going to face difficulties adapting to that, whether or not it is beneficial in the long run. So, the nature of the argument is different from that of the 1960s or 1970s.

I also think it is rather unfortunate that even in 2016, when David Cameron tried to renegotiate terms with the EU, he did not say that we need a period in which to stabilize the numbers coming into the UK, regardless of their background. Within the EU, there are countries like Bulgaria, whose population fell from 9 million to 7 million and which face the opposite problem—they cannot stabilize their numbers because too many people have been leaving.

So, there might have been an opportunity to say that, yes, there is the principle of the four freedoms, but there are also moments when it is reasonable to argue that we need to stabilize population flows.

It has all become rather ironic, because the main issue over the last five or ten years since Brexit has not been large numbers of people coming from other parts of the EU, but from outside the EU. That is not in itself a problem, but rapid shifts in numbers, whether upward or downward, can create difficulties.

I find the idea of identity quite interesting. If you look at London, it has a Muslim mayor, Sadiq Khan. He has won three times and may win a fourth in 2028. He is very keen on rejoining the EU. He is 100 percent a Londoner, but also 100 percent a Muslim. It seems to me that there is a very positive sense of a multinational, multicultural identity—certainly in cities like London, but also in other parts of the UK—which should not be underestimated.

Identity Politics Deepens Divisions

Brexit
Photo: Lucian Milasan / Dreamstime.

Recent research suggests Brexit has produced enduring identity-based polarization (“Leavers” vs. “Remainers”). How does this align with your analysis of narrative construction and “historical arcs” in British political consciousness?

Professor Mark Corner: There is no doubt that there is a divide between Leavers and Remainers—you are right about that. It is reflected, for example, in the fact that the Reform Party at present shows a strong degree of continuity with UKIP and the Brexiteers of ten years ago. So, there is certainly a divide in the country.

But, of course, there has always been a political divide in the UK; it has simply been understood in different terms. Traditionally, people spoke of UK politics in terms of a strong class divide between the middle class and the working class, with Labour representing the working class and the Conservatives the middle class. That has largely broken down.

To some extent, this kind of division—once seen primarily in economic terms—has not been replaced but rather supplemented by a division in more cultural and identity-based terms: between those who are comfortable living in a multinational society and those who are not, and who feel that they are losing their identity.

Of course, the question then becomes: within the UK, do we mean identity as English, Welsh, Scottish, Irish, or British? There are all sorts of questions about which identity we are referring to. So, there has always been division, but it has perhaps become more complex—combining social and cultural divisions alongside economic ones.

You can now see people who might traditionally have voted Labour, who are working class, choosing instead to vote Reform because they feel their identity is under threat, and that this matters more than protecting their economic livelihood. It has become a more complicated picture.

Narratives Replace Clear Policy

You warn against selective historical narratives that privilege moments of “splendid isolation.” To what extent has the far right—particularly figures like Nigel Farage and his UK Reform—successfully mobilized such narratives to legitimize Brexit and its aftermath?

Professor Mark Corner: The key point about the far right is that it largely consists of people who feel fed up with the way things are but do not have a very clear idea of how they could be better. My idea of what a populist is—though this may be a definition open to question—is someone who does not actually have a very clear idea of what they believe in. For them, politics becomes something like a sport. They latch onto people’s resentments and think about how to express them more effectively, how to take them further, and how to turn them into a real political campaign. I do not think they necessarily have a clear policy agenda. You may disagree with this, but I think for many people populism is a kind of sport—a very dangerous one—in which they do not generate ideas themselves but instead observe what people are saying and try to express those views even more forcefully.

So, it is often very difficult to pin things down exactly. Who, for example, can say precisely what the economic program of Nigel Farage is? This is partly a reaction to the fact that it is also quite difficult to say what the economic program of Keir Starmer is. There is a kind of vacuum in the center of British politics as well. To that extent, the rise of the Green Party is rather significant, because it does appear to be offering—at some risk to itself—some very clear ideas about what it would like to see happen. I do not see that coming from any other part of the British political spectrum.

Reform UK Channels Public Discontent

A placard urging voters to support Richard Pearse, the Reform UK candidate at the general election in Weston-super-Mare, UK on July 4, 2024. Photo: Keith Ramsey / Dreamstime.

How do you interpret the rise of Reform UK within the broader trajectory of populist radical right (PRR) politics in Britain? Is it a continuation of Brexit-era mobilization or a transformation into a more permanent political force?

Professor Mark Corner: It is certainly linked to the Brexiteers, but it is more a reflection of feelings of resentment and of being left out on the part of a significant minority of the population—people who feel they have been bypassed and ignored by the mainstream parties. To some extent, I think that is true. The Labour Party has notoriously taken for granted the support of people in poorer areas of the country and has not paid sufficient attention to their needs. That is perfectly true.

But, as I said, the idea that the Reform Party has really developed a clear program that attracts some and rejects others, beyond its hostility to immigration, is questionable. If you take the other side of the political spectrum, one may disagree with what the Greens propose, but it comes down to some very concrete proposals. For example, a 2% tax on the very rich—one may think this would lead to them all running off to the Bahamas and be economically catastrophic, or one may think it is a very good way of raising money—but it is at least clear. I do not see that sort of clarity from Reform, and I therefore wonder whether it is more than an expression of disaffection.

Populists Turn EU Skepticism into Power

Before 2016, Euroscepticism was not a dominant voter concern. In your view, how did it become the central axis of political mobilization, and what role did populist entrepreneurs play in this transformation?

Professor Mark Corner: Oh, gosh—there is a long answer to that. There has always been a problem in the UK in seeing EU membership as being in its economic interest. It is partly because of when we joined in 1973, after dealing with a couple of vetoes from de Gaulle in the 1960s—we first applied in 1961. We got in at the very moment when the post-war boom collapsed. There was an oil crisis, a little bit similar to today, and this precipitated very difficult economic circumstances in the 1970s. So, it was very easy for people in the UK to say that it was when we joined that economic community that all our troubles began. The 1960s were good years economically, and then we joined at the moment of crisis.

We also joined when there were the Common Agricultural Policy and the Common Fisheries Policy, which, whether good or bad, did not particularly benefit the UK, given its relatively small agricultural sector. Then there were all those arguments in the 1980s, when it was said that Britain was paying too much into the EU budget, and Mrs. Thatcher was running around saying, “we want our money back.” In that situation, it was very difficult to argue that, overall, EU membership was economically beneficial.

Then, of course, you had the campaign in 2016, with Nigel Farage and his big red bus, saying this is what we pay into the EU, and that we would get all our money back and invest it instead in the National Health Service, as he wrote on the side of the bus—totally ignoring all the money that came the other way. But he got away with it, because there was a fairly widespread feeling in the UK that it had not done well economically from being in the EU, and had not from the beginning. There is more of a sense now that the UK would do well economically by being part of the EU than there was for a long time when we were inside it.

Brexit Accelerates Culture Wars

Protest
XR protest in solidarity with refugees and climate migrants in Westminster, London, April 23, 2023. Photo: Jessica Girvan / Dreamstime.

To what extent has Brexit accelerated the shift from class-based politics to culture-war polarization, and how has this benefited Populist Radical Right (PRR) actors in structuring political competition?

Professor Mark Corner: I think it has. If you leave a group of 28 and say, no, we want to be on our own—we had too much cooperation, we were too close to you, and we want to get further away—then it does rather support the idea that people want to shut themselves up within their own separate identity.

But at the same time, there is perhaps a greater awareness now that we benefit more by working together. That includes cooperation with other EU countries. If you think of how vulnerable the UK feels at the moment—in terms of everything happening in Ukraine and the perceived unreliability of Trump—there is a growing sense that we really do need to work together with the EU, because otherwise we could be picked off separately. Then, that you can see, in political as well as economic terms, a strong incentive to engage with European countries, for instance in sharing the defense burden. Every week, I read articles about how the UK needs to spend more money on defense, warning that otherwise we are going to be attacked at dawn.

One of the things to note is that there is a great deal of wasted spending in defense, partly because different European countries do not cooperate. Eight years ago, President Macron suggested a common European army, but you do not hear much about that when UK defense chiefs argue that we must increase defense spending.

So, there is a strong case—not just in the economic sphere but also in the defense sphere—for taking a much more serious European approach. That may be one of the most important factors in the years ahead, because there is no doubt that we are in a very dangerous and vulnerable situation, and in such circumstances, people naturally think we should come together with those who are our friends—and that is, obviously, the other European countries.

Brexit Costs Fail to Shift Votes

Given the documented decline in trade integration and investment, why has this not translated into a sustained electoral backlash against Brexit-aligned parties? Does this reflect the resilience of populist framing?

Professor Mark Corner: I do not think it is simply a matter of populist framing. Getting back into the EU would not be easy, and one cannot simply assume that 27 countries would welcome the UK with open arms. The UK has caused a good deal of difficulty by leaving, and people might reasonably ask whether it would create further complications by returning. So, I do not think there is an easy path back in.

We might also have to accept certain conditions if we were to rejoin—things that have not been popular in the past. For instance, the EU might say that, as a new applicant, the UK would have to join the Eurozone. One could easily imagine political arguments arising from that. So, it is not a straightforward route.

In some ways, it might be preferable for the UK to approach the question more along the lines of Norway. Norway voted not to join the EU, partly because of the Common Fisheries Policy and its 2,000 miles of coastline. At the same time, however, it is part of the single market and contributes financially in order to participate. It may be that something along these lines would be a better option for the UK.

There is a genuine debate about how the UK should move closer to Europe. There is, however, a growing sense that it should be closer—not only for economic reasons, but also for political ones. When one considers the current geopolitical context—one superpower pressing in from the east, as in Ukraine, and another expressing interest in places such as Greenland in the west—it may be sensible to work more closely with allies in between.

I do not want to see this only in economic terms. Cultural considerations matter as well, and one of those is the defense of democracy. Whatever our ethnic backgrounds, we are part of democratic societies, and on either side, there are powerful, sometimes autocratic states. So democratic values are something we may wish to emphasize when thinking about cultural identity—values that are shared with the rest of Europe, including Hungary, I am glad to say.

Brexit Fuels UK Fragmentation Risks

UK Map
Photo: Michele Ursi / Dreamstime.

Your book raises the possibility that Brexit could trigger centrifugal pressures within the UK itself. Ten years on, how do you assess the risks of fragmentation—particularly in Scotland and Northern Ireland—and their connection to Brexit politics?

Professor Mark Corner: I think it could happen. Imagine yourself as a Scotsman for a moment. You had a vote in 2014 on whether to stay inside the UK, and David Cameron argued that leaving the UK would mean finding yourself outside the EU—and that this was not desirable. The Scots were quite influenced by this and voted to remain in the UK. Two years later, in the Brexit vote, the Scots voted to stay in the EU, yet the rest of the UK—England and Wales, at any rate—dragged them out. They may well feel that they were misled two years earlier. It is not surprising that many Scots feel betrayed. Another referendum is hardly impossible. At the time, it was described as a once-in-a-generation event. Well, fine—once in a generation—that was 2014. 2039 is not that far away; it is just over a decade from now. So, I would not be surprised if there were another referendum in the 2030s.

What has the UK done about this? It could have taken steps, and perhaps still could. It might say: look, we have this House of Lords—what is it actually doing? It is appointed, not democratic. It is, in effect, “North Korea on Thames.” It could be transformed into a second chamber in which the different nations and regions are represented, rather like the Bundesrat in Germany. This is especially relevant now, because it has often been argued that the imbalance in population—3 million Welsh, 5 million Scots, and 60 million English—makes such a structure unworkable. But the 60 million English can now be broken down: there is Andy Burnham in Manchester, a mayor of Liverpool, a mayor of the Northeast Combined Authority, and a mayor of London. They could form part of a second chamber with real powers, including, arguably, some veto authority. If that kind of constitutional reform were seriously developed in the UK—it has been suggested but never pursued very far—that is what is needed.

Without real constitutional reform, such as a powerful second chamber in which the nations and regions are represented, the centrifugal forces you mention are likely to prove too strong. It is not enough simply to talk about devolving more powers to Wales, Scotland, and Northern Ireland; they need to be brought into a genuinely national second chamber where they can exercise central authority.

Pressures Grow Within States, Not Between Them

Finally, do you see Brexit as a unique case, or as a broader “laboratory” illustrating the structural tension between globalization and national sovereignty—one that continues to fuel populist radical right movements across Europe?

Professor Mark Corner: There are obviously other dimensions to this. There are really two questions: do I think that other countries, or other member states, will try to leave the EU? In the short to medium term, I do not see that happening. There are, however, movements within member states—one might think, for example, of Catalonia—where there are quite powerful pressures, and it is possible that these will create certain difficulties in the years ahead. But they may not.

If nation-states are prepared to share power internally, in the same way that, as members of the EU, they share power externally, then such outcomes can be avoided. Of course, I cannot predict the future. But what I do not see is the kind of queue of member states leaving the EU that was once suggested  — John Gillingham wrote The EU: An Obituary ten years ago. That scenario is not materializing. The pressure to leave exists primarily within nation-states rather than between them.

Professor Jonathan Portes

Ten Years on with Brexit / Prof. Portes: Brexit Has Not Solved Britain’s Problems; It Made Them Worse

As the United Kingdom nears the tenth anniversary of the 2016 Brexit referendum, Professor Jonathan Portes offers a sober, evidence-based reassessment of its economic and political legacy. In this ECPS interview, Professor Portes argues that Brexit did not resolve the structural problems it promised to overcome; rather, “the UK still confronts the same fundamental problems it did 10 years ago,” and, in key respects, they have worsened. Drawing on a decade of research on trade, migration, labor markets, and policy autonomy, he shows how weakened investment, reduced integration, and persistent political tensions have defined the post-Brexit settlement. Moving beyond slogans, Professor Portes situates Brexit within broader debates on sovereignty, interdependence, and populist politics in an increasingly unstable international order.

Interview by Selcuk Gultasli

As the United Kingdom approaches the tenth anniversary of the 2016 Brexit referendum, the debate has moved decisively from slogan to scrutiny, from promises of restored sovereignty to the measurable consequences of economic and political separation. In this context, the European Center for Populism Studies (ECPS) is pleased to host Professor Jonathan Portes, Professor of Economics and Public Policy at the School of Politics & Economics, King’s College London, whose extensive scholarship has been central to understanding the economic and labor-market consequences of Brexit. Throughout the past decade, Professor Portes has offered one of the most rigorous and evidence-based assessments of how trade, migration, policy autonomy, and public expectations have evolved under the post-Brexit settlement.

This interview is framed by a stark and sobering conclusion that runs through Professor Portes’s reflections: Brexit did not resolve the structural dilemmas it claimed it would overcome. Rather, as he puts it, “the UK still confronts the same fundamental problems it did 10 years ago.” The core promise of Brexit, he argues, was that it would allow Britain to escape the constraints associated with globalization, immigration, and post-2008 economic stagnation. Yet the reality has been quite different. “Rather than solving those problems,” he observes, Brexit “has probably made them worse.” In Professor Portes’s analysis, the UK remains what it always was: “a middle-sized, advanced Western European economy,”still grappling with familiar pressures, but now doing so from a more exposed and less advantageous position.

The interview explores this argument across several interrelated domains. On the economic front, Professor Portes notes that the evidence on growth, trade, productivity, and investment has broadly confirmed the mainstream pre-referendum consensus: Brexit was never likely to produce collapse, but it would impose “significant and material long-term damage”on British economic prospects. Trade, especially goods trade, emerges in his account as the most enduring site of disruption, while weakened investment and reduced integration with the European market suggest an adaptation process that may culminate in a “permanent loss of integration.”

On migration, Professor Portes offers an especially illuminating account of Brexit’s unintended consequences. Rather than simply reducing immigration, Brexit reconfigured it, replacing free movement from within the EU with larger-than-expected inflows from outside it. That outcome, he suggests, exposed a contradiction at the heart of the Leave campaign: the demand for both lower migration and greater economic flexibility under national control. More broadly, the interview shows how the promise of sovereignty often failed to produce meaningful control in practice. As Professor Portes cautions, sovereignty “in the abstract legal and political sense does not necessarily translate into having control.”

Taken together, Professor Portes’s reflections offer a penetrating assessment of Brexit not as a completed nationalist correction, but as a prolonged and costly reconfiguration of Britain’s political economy. His analysis challenges triumphalist narratives from both the sovereigntist and populist right, while posing deeper questions about the limits of national autonomy in an interdependent world.

Here is the edited version of our interview with Professor Jonathan Portes, revised slightly to improve clarity and flow.

Brexit Has Intensified, Not Resolved, Structural Economic Pressures

A Brexit Day ‘Independence’ parade was held at Whitehall and on Parliament Square in London to celebrate the UK leaving the European Union on January 31, 2020.

Professor Portes, welcome. You have been among the most careful and empirically grounded observers of Brexit’s economic and political consequences over the past decade. As we approach the ten-year mark since the 2016 referendum, how would you characterize the overall trajectory of the UK economy and policy landscape under Brexit? What stands out most when you step back and take a long view?

Professor Jonathan Portes: I think what stands out most, perhaps, is that the UK still confronts the same fundamental problems it did 10 years ago. The UK remains very much a middle-sized, advanced Western European economy, with many of the same issues and problems as other such economies. The difference, however, is that Brexit was, in some ways, touted as a means for the UK to escape some of those problems, issues, and constraints relating to globalization, immigration, and economic stagnation since 2008, as well as a range of political problems within the UK that arose from those economic challenges.

But rather than solving those problems, as Brexit was presented as doing by some of its proponents, it has probably made them worse. This is partly because it led, obviously, to a period of political chaos in the UK. Even after that, and despite a degree of relative stability being restored, it has possibly caused some damage to the UK’s political institutions. At the same time, rather than resolving any of these political economy problems, it has arguably exacerbated them.

In other words, the difficulties of managing globalization and its impacts were already very apparent when the UK was a member of the EU. They manifested themselves partly through EU membership and partly outside it. However, outside the EU, these difficulties have become even starker. Rather than being resolved by Brexit, as was hoped, they have become more visible and more difficult. This is partly due to the structural contradiction of Brexit itself. It is also, of course, partly the result of global developments since then—most notably the election of Trump—which have made the UK’s position outside the EU more difficult for fairly obvious reasons.

Growth, Trade, and Investment Have Weakened as Expected

Much of your work highlights the gap between political expectations and economic outcomes—particularly in areas like growth, trade, and migration. Looking across the evidence now available, how should we understand the real costs of Brexit compared to what was anticipated or promised at the time?

Professor Jonathan Portes: Of course, politicians on both sides said a lot about Brexit. In terms of the economic impacts of Brexit on things like growth, trade, and investment, this is one area where we economists can actually be rather pleased with ourselves. Economic forecasts rarely turn out to be accurate, and of course there is still quite a lot of debate about the precise impacts of Brexit. But we now have a wide range of economic evidence on the impact on growth, trade, and investment, and it is pretty much entirely consistent with the mainstream economic consensus that I and others formed part of, before Brexit: that Brexit would not be a complete catastrophe for the UK economy, but it would do significant and material long-term damage to our economic prospects by reducing growth, productivity growth, trade, and investment. And all of those have been fairly clearly borne out.

The interesting difference is on migration, where both I and others thought that Brexit would reduce migration through the free movement channel within the EU, which would only be partly offset by increased inflows from outside the EU. In fact, it has turned out that the direction for both of those numbers has been correct. But the relative magnitudes were wrong, and the increase in migration from outside the EU has more than offset the reduction in flows within the EU. As a result, the UK population and labor force are actually larger than they would have been without Brexit, not smaller. That provides, not a small, offset to the negative impacts of Brexit, although it has also generated a great deal of political backlash. From an economic point of view, however, this is a positive—though certainly not by anywhere near enough to offset the negative impacts of Brexit on trade and investment.

Trade Took the Hardest Hit, While Services Showed Resilience

If we think of Brexit as a large, multi-dimensional economic shock, where do you see its most significant and lasting effects—across trade, investment, labor markets, and productivity—and which of these have proven more resilient than many expected?

Professor Jonathan Portes: The biggest persistent shock has been to trade, particularly trade in goods. The UK did quite well out of EU membership in terms of being integrated into pan-European and hence pan-global supply chains for goods. We have seen that small and medium-sized exporters benefited from being able to export to the EU without regulation or red tape. And, of course, British consumers benefited from frictionless imports from within the EU. None of that has disappeared completely—you still have trade under the Trade and Cooperation Agreement, and the EU remains by far our largest trading partner. But nonetheless, there has been a significant impact, particularly for those manufacturers integrated into global supply chains, who have faced increased costs as a result, and also for some of those small and medium-sized businesses that benefited from frictionless trade within the single market.

On the more resilient side, there has also been some damage to the financial services sector, which, of course, was a major issue in the run-up to Brexit. Again, the UK’s financial services sector is large and resilient, and London remains by far the largest financial center in Europe, but it is nonetheless somewhat smaller than it would have been without Brexit. There has been some damage there, but the sector is not going anywhere and will continue to be an important part of the UK economy.

There has been more resilience in other areas of the high-productivity tradable services sector—things like consultancy, legal services, and accountancy—where trade barriers were never that large, because there are no tariffs and there is less in the way of regulation than in financial services. Hence, the UK has actually done pretty well; it has not just been resilient but has also seen very fast growth in those sectors. This has helped preserve the overall picture and means that the economic impacts have not been as clear, as severe, or as visible as they might have been, as some people at one end of the spectrum feared.

And then on the labor market, there was considerable concern that the end of free movement would do quite a bit of damage to sectors that relied on European migration. While migration from outside the EU is not a perfect substitute—because it involves different types of people in different sectors with different skills and so on— overall, the rather large increase in non-EU migration has done a lot to cushion the UK labor market and sectors that are dependent on migrant labor from what the impacts would otherwise have been. So, it has been a mixed picture.

Short-Term Adjustment, Long-Term Disintegration

Brexit.
Photo: Dreamstime.

There is now substantial evidence that UK trade with the EU has underperformed relative to its pre-Brexit trajectory, alongside signs of weakened investment. How should we interpret these developments in structural terms—do they reflect a permanent loss of integration, or an ongoing process of economic adaptation?

Professor Jonathan Portes: I think the answer is, in some ways, both. It is an ongoing process of adaptation that, eventually, leads to a permanent loss of integration, assuming that the new situation continues as it is. Of course, because this has done significant damage to the UK economy, both politicians and the public are now trying to think of ways to reverse that damage, at least in part. So, we do not know exactly where we will be in five or ten years. But if the current status quo continues, then you have, as you suggest, a process of adaptation that has partly happened but still has some way to run, leading to a permanent loss of integration.

On the other hand, as I said, there are now active discussions acknowledging that this is a bad outcome—recognized as such from an economic perspective by the UK public and policy establishment—and efforts are being made to think of ways to reverse it, at least to some extent.

Migration Fell from the EU, Rose from Elsewhere

Your research shows that Brexit fundamentally reshaped the composition of migration rather than reducing it overall, with declines in EU-origin workers offset by increases from non-EU countries. How should we interpret this outcome in relation to the central political promise of “taking back control”?

Professor Jonathan Portes: This is absolutely fascinating, because there was a very large implicit contradiction in some of the arguments made by pro-Brexit campaigners, which sought to present it both as a way of substantially reducing immigration overall and, by taking back control, ensuring that migration policy would be tailored to the needs of the UK economy or labor market, rather than dictated by EU rules.

But it turned out that, particularly at the time of Brexit and in the aftermath of the pandemic, the interpretation of the then-government—which was the government that delivered Brexit—was that what the UK economy needed was a significant increase in migration, and that is what we got. So, you had people within the Brexit movement saying, “We have been betrayed, immigration is going up,” and others saying, “No, we have control—yes, immigration is going up, but it is immigration that is entirely under our control and dictated by the needs of the UK economy and labor market.”

That contradiction was always implicit in some of the claims made by Brexit proponents at the time of the referendum, when it was never entirely clear whether they were making a concrete pledge to reduce immigration or not. But nobody, certainly not me, expected that contradiction to become so obvious and so large as it did in the post-pandemic period, because of the significant labor shortages that emerged post-Brexit and post-pandemic in the UK, and, to some extent, in other countries as well. 

The result is that the UK political system has not really been able to cope with this. It has done a great deal of damage to the Conservative Party and has been one of the significant factors behind the rise of the Reform Party, contributing to divisions within the Conservative Party. Despite the fact that the Labour Party opposed Brexit but is now having to manage this new post-Brexit immigration system, it is also leading to very severe tensions within the Labour Party and the current government between those who believe that immigration needs to be reduced regardless of the needs of the economy, and those who, for economic or broader political reasons, think that, on the whole, a relatively liberal and open immigration system is a good thing.

Migration Policy Reveals the Limits of Political Steering

In your analysis, the UK has moved from a largely automatic free-movement regime to a highly managed, points-based system—yet with outcomes still strongly shaped by labor demand and external shocks. Does this suggest limits to how far governments can actually steer migration and labor markets?

Professor Jonathan Portes: It illustrates the difficulties and contradictions in having control. One of the perceived disadvantages, from a political point of view, of free movement was that we could not say who could come. People would simply come and go as they wished, and we had no control over that because of EU rules. But the upside, of course, was that this had two advantages. From an economic perspective, it meant that these flows were, to a significant extent, determined by the market. Labor demand led to people coming in, a weak labor market led to people leaving, and these things happened more or less automatically. From an economic perspective, that, on the whole, is a good thing.

But the second advantage was political, and I think people did not fully appreciate it. Governments could largely sit back and say, “well, these are market decisions, and we do not have the remit to interfere with them,” so migration could be somewhat removed from the political process. The disadvantage of the current system, as it has turned out, is that having control means there is a great deal of political pressure on governments to do something about migration, regardless of whether it is actually a problem in economic terms.

That leads to sharp swings in policy, and often, as we are seeing at the moment, swings that are somewhat counter cyclical. This reflects an old problem that we used to discuss as macroeconomists with demand management through fiscal policy in a Keynesian framework: in principle, it is good to cut taxes when the economy is weak and increase taxes when the economy is strong. But in practice, because governments react slowly and economic data comes through with delays, it often turns out that policies are implemented at the wrong time—by the time you cut taxes, the economy is already recovering, or by the time you raise taxes, the economy is already weakening.

We seem to be seeing something similar with migration. The government was panicked by the large rise in migration in 2022 and 2023 and has now put in place very draconian measures to reduce migration at exactly the time when migration to the UK was already falling very sharply. That is a very bad way of making policy. We have control—this is all entirely under government control—but we have ended up with policy where that control is being exercised in a way that is quite damaging economically and does not really convince the public that we actually have control. To the public, it looks as though the government is just flailing around and does not really know what it is doing. To be honest, they are not wrong about that.

Mismanaged Migration Policy Fuels Shortages and Bottlenecks

Air Travellers Proceed to Passport Control at a British Airport. Photo: Dreamstime.

You have described post-Brexit migration patterns as producing “unintended consequences,” particularly in terms of scale and sectoral distribution. To what extent do these dynamics help explain persistent labor shortages, sectoral imbalances, and broader economic bottlenecks?

Professor Jonathan Portes: I think it goes back to what I just said, which is that, as in many other things, a relatively free market is the worst possible way of managing the matching of supply and demand, except for all the other ways of doing it. So, when you have a government that is trying, in some way, to use the migration system to match supply and demand and is also doing so in an environment where it faces all these political constraints, real or imagined, it ends up getting things wrong.

Partly this is because you simply cannot manage an economy or a labor market in that way, and partly it is due to politics. Once you have said you are in control, and that everything is under control, you face pressure to make policy changes that are not necessarily justified by anything in particular, except perceived political pressures. As a result, the government ends up getting a number of things wrong.

This has been particularly evident in the health and care sector, where the government liberalized probably too much, too quickly, in a way that did not take account of the dynamics of the immigration system or the labor market, and has now tightened up too much, too quickly, again without taking those dynamics into account, or considering how the labor market works or its own role in shaping pay and conditions in this workforce.

The result is both poor policymaking and poor political outcomes—shortages, bottlenecks, and broader imbalances. It also causes significant harm to individuals caught up in this system, including migrants, who can find the rug pulled out from under them and are sometimes treated very badly, both by their employers and by the government, as well as the people who depend on care—the consumers of these services—who ultimately should be our primary concern.

Widespread Impact Undermines Claims of Uneven Gains

Brexit’s economic consequences have not been evenly distributed. How important are these distributional effects—for workers, firms, and regions—in shaping both the economic outcomes and the political sustainability of Brexit?

Professor Jonathan Portes: In one sense, there has been a great deal of work on the regional impacts of Brexit, and I am not sure it has demonstrated that they are as differential as one might expect. You can, of course, point to very specific examples, such as the loss of European regional funding in some disadvantaged areas. There has also been a particularly negative impact on parts of the food and agriculture sector. I mentioned the City of London and the financial services sector, but overall, the impact has been quite diffuse across the economy as a whole.

So, you can point to individuals or particular businesses that have been put out of business by Brexit, and there are people who are especially dependent on certain sectors. But beyond that, there has mostly been a general pattern of lower growth, lower trade, and lower investment, affecting pretty much the entire UK economy to a greater or lesser extent.

You can see that in the opinion polling. The view that Brexit has been an economic failure is very widely shared across UK society. It is very hard to find a section or interest group that says Brexit was great for them, even if it was bad for others. Rather, there is a broad consensus that, from an economic point of view, Brexit has been a failure across the board. So, while you can identify individuals or businesses that have suffered much more than someone like me, for the most part it has been a broadly shared, generalized negative impact.

Formal Sovereignty Cannot Override Economic Realities

Your work suggests that while Brexit restored formal policy autonomy, outcomes have remained difficult to control in practice. Does this point to a deeper structural tension between political sovereignty and economic interdependence in advanced economies?

Professor Jonathan Portes: Yes, and I think that goes back to what I was saying before. You may or may not have thought it was plausible for the UK to argue, in 2016, that as a middle-sized, advanced economy—like other European countries—dependent on global trade and investment, there were nonetheless various structural, political, and economic reasons why it should not be part of the EU. Partly political—we have a different political tradition—and partly structural and economic. We are much more dependent on services trade, particularly high-value services, and while we are economically integrated with the EU, it is not to the same extent as countries like Germany or France. So, the UK could, and should, for this combination of reasons, be independent, make its own trade policy, and make its own, to some extent, foreign policy, retain close economic links with the EU, but not subordinate its political, economic, or trade decision-making to the EU. And we could make a success of it as a global economy, just as some other countries—whether Singapore or Australia, or to some extent Switzerland—have done. That case was always flawed, and most economists thought it was flawed, but it was not obviously unreasonable.

But it is now pretty clear that geopolitical developments over the last ten years have been very unfavorable to that strategy. It is much easier to pursue such a strategy when there is a benign, liberal hegemon—or perhaps two hegemonic powers, the US and China—both with a strong interest in a stable, liberal international trading order that accommodates countries in the position I have just described. You can argue about what might have happened without Trump. I think it is plausible that even without Trump, we would have been moving, to some extent, in the direction we are already going, which would have made that strategy increasingly implausible. But it is clear that Trump has accelerated this trajectory, to the point where that strategy now looks unrealistic.

That is where we are now, unfortunately. Even if Trump himself were reversed, it is very hard to see a return to the sort of benign, liberal international trading order I described—one in which a middle-sized power like the UK can comfortably pursue an independent path while still participating fully in global trade.

Brexit Reconfigures Long-Standing Migration Debates

In your work on free movement and the UK, you situate Brexit within a longer trajectory of labor mobility and political contestation. From that perspective, does Brexit represent a rupture, or a reconfiguration of deeper structural tensions within the British political economy?

Professor Jonathan Portes: It is very much the latter. Immigration—both its political, economic, and social consequences—has been an issue in British politics that has gone up and down in prominence for a very long time, certainly in the post-war era, from the mid-1950s to now, over the last 70 years. Brexit has clearly changed things. It has changed the system, as we have just discussed, and it has changed the environment. But many of the issues being contested now are very much the same as those that were contested in the 1960s, in the Powell era, were contested again in the 2000s immediately after enlargement, and are being contested today.

These include questions such as: to what extent is the UK—like other European countries, albeit in a different context—a country shaped by migration? What is the role of migration in a modern economy and labor market? What is its role given the demographic challenges and ageing that all our countries face? And what are the implications of migration for a country’s national and cultural identity?

We are not, for the most part, countries of immigration in the same way as the US, but equally, certainly in the UK—and in most of Europe—we are no longer monocultural or ethnically homogeneous societies either. Those who seek to take us back to that are very dangerous. So, the question becomes: what is the model of a multi-ethnic European democracy? That is something we are all struggling with. The UK was struggling with it before Brexit, and it is struggling with it now.

Brexit Pushed the Far Right Toward a European Strategy

Brexit was widely seen as a landmark moment for populist and sovereigntist politics, including the rise of far right and populist radical right mobilization around migration and national control. Looking back, how do you assess the relationship between Brexit and these broader political currents—both at the time and in their evolution over the past decade?

Professor Jonathan Portes: It has been quite interesting in that Brexit has, in a sense, forced European far-right movements to reconfigure their offer. What most of them seem to have recognized is that Brexit is neither a success nor is it perceived as a success, either domestically in the UK or in their own countries. So, you have far-right movements that were, at the time and immediately afterwards, flirting with their own ideas of exit from the European Union, but have now reconfigured themselves to retain the same focus on migration issues while embedding those concerns within a European frame rather than a purely domestic one.

This has, if anything, been bolstered by what we see from across the Atlantic, with figures such as J.D. Vance talking about European culture or European Christian values, rather than Italian or French values. So, you have this form of ethnically based, anti-immigrant nationalism that has, in a sense, shifted toward a European-level identity, alongside a domestic one.

In that respect, these movements have been, whether one likes it or not, quite effective in adapting. When you look at figures like Le Pen and Meloni, they have pivoted away from overt anti-Europeanism toward a form of European white nationalism.

Populist Right Is Here to Stay—but Its Shape Is Uncertain

Nigel Farage, leader of the UK Independence Party UKIP. Nigel Farage, leader of the UK Independence Party, speaking at Chatham House in London on March 31, 2014. Photo: Dominic Dudley / Dreamstim.

In the same context, how do you interpret the continued prominence of Nigel Farage and the rise of Reform UK within the UK’s political landscape? Does their trajectory suggest that Brexit has consolidated a durable populist radical right (PRR) and far-right constituency, or are we witnessing a more fluid and contingent phase of political realignment?

Professor Jonathan Portes: I hesitate to make predictions on this. But the obvious answer is a bit of both. The presence of Farage and the populist right in the UK is now well established; it is no longer a flash in the pan. We now have some years of it, so I think it is not going away. But how the current political shake-up in the UK plays out is very difficult to assess.

Structurally, our political system is configured around a two or two-and-a-half-party system. We have a roughly 50–50 division between right and left blocs, with a group of voters in the middle who are willing to support either side on occasion. That is a reasonably stable political configuration. But when you have four or five parties, the system becomes much more unstable, especially when these cleavages cut across both economic and socio-cultural dimensions.

It is not clear that the current first-past-the-post system is well suited to this new context. Whatever one thinks in the abstract about first-past-the-post versus different forms of proportional representation, the dynamics look very different in a two or two-and-a-half-party system than in a four or five-party system, where instability increases significantly.

So, it is very unclear how this will shake out. Populism—and in particular far-right populism—is certainly not going away in the UK. But how it will reconfigure the right of the UK political spectrum, and to what extent the more traditional conservative right, which still has a constituency in the UK, can reassert itself and regain control, remains very uncertain at the moment.

Economic Reality Challenges Populist Narratives

To what extent do the economic and migration outcomes of Brexit challenge or reinforce the core claims of populist narratives about globalization, elites, and national sovereignty?

Professor Jonathan Portes: As discussed, they illustrate some of the limitations of national sovereignty and the fact that sovereignty in the abstract legal and political sense does not necessarily translate into having control. There is a fundamental issue here: people felt that they wanted more control over their lives, and Brexit was sold to them as a way of achieving that, yet they certainly do not feel that this has been delivered. That is a fundamental problem.

It is also a fundamental problem for politicians, because it is very difficult to explain to people that, on the one hand, politicians need to demonstrate concretely that they have given people back some control over their lives, while on the other hand they must also be honest about the fact that there are areas where national governments simply cannot exercise control and must be realistic about those limits.

We are seeing this right now with oil and gas prices. The UK government cannot stop global oil and gas prices from rising. At some point, politicians have to be honest and say that we can try to protect the most vulnerable households and mitigate the impact of this economic shock, but it remains an economic shock, and that means the country as a whole is poorer, and we have to live with that.

Populists Shift Strategy as Exit Loses Appeal

Finally, for other sovereigntist or “exit” movements across Europe that have looked to Brexit as a model, what lessons—economic, political, or institutional—should be drawn from the UK’s experience over the past decade?

Professor Jonathan Portes: As I said, populists have correctly learned that Brexit, or its equivalent, is largely going to be a political loser, and they have pivoted away from that. They have shifted towards a more pan-European, ethnically based opposition to immigration—a form of pan-European white nationalism that mirrors some of what is going on in the US at the moment. To some extent, they have done this quite successfully in countries such as France and Italy.

To my mind, the challenge is for those of us who are not part of these movements and do not want to see them succeed: what is the narrative—economic, political, and cultural—that we use to push back against this and say that this is not the sort of Europe we want? The kind of Europe we seek to build is not one that will be economically successful, nor one that most people would want to live in. That is the challenge, and frankly, I do not think we have met it yet.