Trump's 'radical' policies are putting American prosperity at risk, economist says
The president's 'terrifying' Oval Office meeting with Ukrainian President Volodymyr Zelenskyy, on top of his trade war, have shocked European Union countries, said the Dublin-based McWilliams, an economist who used to work for the Irish central bank, UBS (UBS), and Banque Nationale de Paris (BNPQY) (BNP). He is now a podcaster and author of the forthcoming 'Money: A Story of Humanity.'
'We have a very radical president doing very radical things very quickly, with little or no economic coherence,' McWilliams told Quartz in an interview. 'There's no world in which a large dominant global player turns its back on its trading partners and gets rich. He's not on a pathway to making America great.'
Trump has undermined the twin pillars of America's post-World War II global policy: Atlanticism and freer trade. This world may move to a situation closer to the 1930s, carved up into competing power blocks. The U.S. will retreat to the Western Hemisphere with Russia and China taking the rest, McWilliams said.
Trump has thrown in the towel on Russia, McWilliams said, isn't really committed to competing with China in manufacturing in any proper way, and believes that tariffs are the road to economic prosperity.
For investors, that means steering clear of the U.S. for now, McWilliams said.
'There's simply too much risk in America — chaos monkeys are running the show — and that's not good for money,' McWilliams said. Instead, European stocks are set to soar on German-led fiscal expansion, with weapons-makers especially likely to benefit.
The hope is that the American economy will slow, imposing some discipline on this administration, McWilliams said. Even if this stalls the administration's program, damage has been done: The U.S. will struggle to restore government capacity eroded by Elon Musk's Department of Government Efficiency.
'Trump thinks he holds all the cards,' McWilliams said. 'I'm not so sure. The last time someone tried to remake the world order — Germany in the 1930s — it didn't end well.'
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The Hill
24 minutes ago
- The Hill
Bolivia votes in elections expected to empower the right wing for first time in decades
LA PAZ, Bolivia (AP) — After a lackluster campaign overshadowed by a looming economic collapse, Bolivians voted on Sunday for a new president and parliament in elections that could see a right-wing government elected for the first time in over two decades. The vote, which could spell the end of the Andean nation's long-dominant leftist party, is one of the most consequential for Bolivia in recent times — and one of the most unpredictable. In the run-up to Sunday, a remarkable 30% or so of voters remained undecided. Polls showed the two leading right-wing candidates, multimillionaire business owner Samuel Doria Medina and former President Jorge Fernando 'Tuto' Quiroga, locked in a virtual dead heat. Voting is mandatory in Bolivia, where some 7.9 million Bolivians are eligible to vote. 'I have rarely, if ever, seen a situational tinderbox with as many sparks ready to ignite,' said Daniel Lansberg-Rodriguez, founding partner of Aurora Macro Strategies, a New York-based advisory firm. Bolivia could follow rightward trend The election is being closely watched across Latin America for its potential impact on the economic fate and political stability of this long-restive, resource-rich nation. It also marks a watershed moment for the Movement Toward Socialism, or MAS, party, whose founder, charismatic ex-President Evo Morales, rose to power as part of the 'pink tide' of leftist leaders that swept into office across Latin America during the commodities boom of the early 2000s. Now shattered by infighting, the party is fighting for its survival in Sunday's elections. The outcome will determine whether Bolivia — a nation of about 12 million people with the largest lithium reserves on Earth and crucial deposits of rare earth minerals — follows a growing trend in Latin America, where right-wing leaders like Argentina's libertarian Javier Milei, Ecuador's strongman Daniel Noboa and El Salvador's conservative populist Nayib Bukele have surged in popularity. A right-wing government in Bolivia could trigger a major geopolitical realignment for a country now allied with Venezuela's socialist-inspired government and world powers such as China, Russia and Iran. Bolivians bitter as they vote for the 'lesser evil' The somber mood of the election was clear as voting kicked off at polling stations in downtown La Paz, Bolivia's capital, and a steady stream of voters began to trickle in. Bolivians waiting to vote at three different high schools across the city expressed confused, cynical and bitter emotions, fed by an annual inflation rate of more than 16% last month (compared to 2% less than two years ago), a scarcity of fuel and absence of hope for swift improvement. Several said they were voting for 'el menos peor,' the lesser evil. The right-wing opposition candidates bill the race as a chance to chart a new destiny for Bolivia. But both front-runners, Doria Medina and Quiroga, have served in past neoliberal governments and run for president three times before — losing at least twice to Morales. 'People were waiting for a new, popular candidate, and in this, the opposition failed us,' said Ronaldo Olorio, a farmer from the coca-growing Yungas region who once identified as a fervent Morales supporter. 'My vote is one of anger, of discontent. I don't like Doria Medina or Quiroga. But I have to vote for one of the two.' Right-wing candidates vow to restore US relations Doria Medina and Quiroga have praised the Trump administration and vowed to restore ties with the United States — ruptured in 2008 when Morales expelled the American ambassador. They also have expressed interest in doing business with Israel, which has no diplomatic relations with Bolivia, and called for foreign private companies to invest in the country and develop its rich natural resources. After storming to office in 2006, Morales, Bolivia's first Indigenous president, nationalized the nation's oil and gas industry, using the lush profits to reduce poverty, expand infrastructure and improve the lives of the rural poor. After three consecutive presidential terms, as well as a contentious bid for an unprecedented fourth in 2019 that set off popular unrest and led to his ouster, Morales has been barred from this race by Bolivia's constitutional court. His ally-turned-rival, President Luis Arce, withdrew his candidacy for the MAS on account of his plummeting popularity and nominated his senior minister, Eduardo del Castillo. As the party splintered, Andrónico Rodríguez, the 36-year-old president of the Senate who hails from the same union of coca farmers as Morales, launched his bid. Ex-president Morales casts a null vote Rather than back the candidate widely considered his heir, Morales, holed up in his tropical stronghold of Chapare and evading an arrest warrant on charges related to his relationship with a 15-year-old girl, has urged his supporters to deface their ballots or leave them blank. Dozens of coca-growing union activists formed a human chain around Morales to protect him from arrest as he cast his null-and-void ballot in Chapare, in central Bolivia. A large wreath of coca leaves hung around his neck. He flashed a rare smile as he left the polling station, shaking hands with supporters who showered him in white confetti. 'I'm convinced that if there's no fraud, the null vote will win,' he told reporters after voting. Conservative candidates say austerity needed Whoever wins faces daunting challenges. Doria Medina and Quiroga have warned of the need for a painful fiscal adjustment, including the elimination of Bolivia's generous food and fuel subsidies, to save the nation from insolvency. Some analysts caution this risks sparking social unrest. 'A victory for either right-wing candidate could have grave repercussions for Bolivia's Indigenous and impoverished communities,' said Kathryn Ledebur, director of the Andean Information Network, a Bolivian research group. 'Both candidates could bolster security forces and right-wing para-state groups, paving the way for violent crackdowns on protests expected to erupt over the foreign exploitation of lithium and drastic austerity measures.' If, as is widely expected, no presidential candidate receives more than 50% of the vote, or 40% of the vote with a lead of 10 percentage points, the top two candidates will compete in a runoff on Oct. 19 for the first time since Bolivia's 1982 return to democracy. All 130 seats in Bolivia's Chamber of Deputies, the lower house of Parliament, are also up for grabs, along with 36 in the Senate, the upper house.
Axios
24 minutes ago
- Axios
Rubio says peace agreement "a long ways off" after Putin summit
Secretary of State Marco Rubio said Sunday that "we're not at the precipice" of a peace agreement after President Trump's Alaska summit with Russian President Vladimir Putin ended without a deal on Russia's war in Ukraine. The big picture: Trump, who Axios previously reported set a ceasefire as the goal of the talks, said "we didn't get there" after the meeting. Rubio on Sunday said both sides would have to make concessions, but refused to name any that Putin agreed to. Now, Ukrainian President Volodymyr Zelensky, joined by several European leaders, will travel to Washington for a potentially difficult meeting with Trump on Monday. Driving the news: Rubio, who made appearances across the Sunday political show lineup, told ABC's Martha Raddatz a ceasefire was not the aim, arguing, "You're not going to reach a ceasefire or peace agreement in a meeting" without Ukraine present. If an agreement isn't reached, Rubio said, there will be consequences — but he emphasized the administration is trying to avoid such measures. Late last month, Trump threatened to shorten Putin's deadline to agree to a ceasefire in Ukraine or face heavy sanctions, which he said would include "secondary sanctions and tariffs." Yes, but: Rubio on Sunday argued that if the U.S. levies additional sanctions, the "talking stops." "If this morning the president woke up and said, 'I'm putting these terrible ... strong sanctions on Russia,' that's fine — [it] may make people feel good for a couple hours," he said on Fox's "Sunday Morning Futures." "But here's what you're basically saying ... talks are over for the foreseeable future." He reiterated that view on NBC's "Meet the Press," saying that he doesn't believe new sanctions would force Putin to accept a ceasefire. "We may very well wind up in that place," he said of new sanctions. "I hope not. Because that means that peace talks failed." The other side: Democrats on Sunday blasted the president over the meeting, which began with a red carpet rollout, and denounced the lack of immediate consequences for Russia. Sen. Chris Murphy (D-Conn.) described the summit as a "great day for Russia" in an interview with NBC's Kristen Welker, saying Putin left with "his photo op with zero commitments made and zero consequences." His Democratic colleague, Sen. Chris Van Hollen (Md.), said on ABC's "This Week" that Trump "got played" by Putin and that "[a]ll the threatened sanctions ... apparently have been set aside." Van Hollen called for the Senate to move ahead on bipartisan legislation that would impose new sanctions on Russia. Catch up quick: Trump, in a Truth Social post after the summit, said the meeting — and a subsequent phone call with Zelensky and European leaders — went "very well." He wrote that it "was determined by all" that a peace agreement, rather than a "mere Ceasefire Agreement" would be the best solution. Zelensky had been adamant that there must be a ceasefire before peace talks, Axios' Barak Ravid reports. The terms that Putin laid out in the summit included that Ukraine cede two of the four regions to which Russia has laid claim and freeze the front lines in the other two, Axios' Barak Ravid and Dave Lawler reported, citing two sources briefed on a call U.S. officials held with other allied leaders. Flashback: Zelensky's Monday trip to Washington comes around six months after Trump's February Oval Office meeting with the Ukrainian leader boiled over into a heated argument. European Commission President Ursula von der Leyen, German Chancellor Friedrich Merz and NATO Secretary General Mark Rutte are all expected to attend the meeting with Zelensky. Friction point: On CBS News' "Face the Nation," Rubio denied that those leaders were joining Zelensky as backup to protect him from being bullied into a deal. "This is such a stupid media narrative; that they are coming here tomorrow because Trump is going to bully Zelensky into a bad deal," he said. "We invited them to come," he added. "The president invited them to come."
The Hill
24 minutes ago
- The Hill
GM's quarterly results illustrate the folly of tariffs
General Motors, a cornerstone of American industry, is suffering the consequences of President Trump's unconstitutional 25 percent tariffs on imported vehicles and auto parts. In the second quarter of 2025, GM suffered a $1.1 billion tariff blow to its operating income, slashing the company's profit margin from a healthy 9 percent to just 6.1 percent. Net income plunged by 36.1 percent from the prior quarter and by a staggering 40.7 percent compared to a year ago. Although the estimated tariff impact for the full year of $4 billion to $5 billion is less than 3 percent of GM's overall revenue, that cost represents more than half of the typical annual income for the company over the past decade. The consequences extend far beyond GM's balance sheet. Tariffs, paid by importers to the federal government, are partly absorbed by companies and partly passed to consumers. We've especially seen this in import-sensitive sectors including furnishings, appliances, clothes and toys. Men's shirts and sweaters, for instance, rose 4.9 percent in June alone. When businesses 'eat' the cost, as GM tried to do last quarter, the fallout is no less severe. Diminished earnings mean less capital for investment in better technology or expanded operations, slowing broader economic growth, fewer resources for pay raises or new jobs — hardly the boon for workers that tariff advocates promise. The data confirms this. Nationwide, 14,000 manufacturing jobs disappeared in the past two months, erasing all gains in 2025. In June, real average weekly earnings dropped by 0.4 percent, an annualized loss of nearly 5 percent. Shareholders are also feeling the pinch. Stock valuations track a company's expected future earnings. Since 2012, GM's stock price increased by more than 200 percent. GM's price-to-earnings ratio today stands at 6.83, almost identical to 2012 levels. Stock prices increased alongside earnings. A sustained $5 billion annual hit, wiping out over half of GM's annual net income, could erase more than $20 billion in market capitalization if valuations adjust. With tariffs eroding profits, is it any wonder that GM's stock has slid 8 percent since its post-2024 election peak and now languishes 13 percent off its 2021 highs? This affects millions of middle-class Americans and retirees with pensions and savings invested. More broadly, lower dividends and diminished returns discourage investment, starving companies of the capital needed to expand. The result: slower growth, fewer jobs and weaker wage gains. GM, to its credit, is fighting to offset 30 percent of this burden by boosting U.S. production, cutting costs and increasing domestic content to comply with the USMCA trade agreement's labyrinthine rules. Yet even if successful, the net impact of $2.8 billion to $3.5 billion will devour a significant slice of GM's already thin margins. Profit margins at GM — as in most other sectors — are far less than conventional wisdom. GM's net profit margin over the past decade has averaged less than 5 percent. In other words, a $30,000 vehicle yields less than $1,500 in profit. GM's plans to shift some production to U.S. plants and rework supply chains is a testament to private enterprise's resilience. But make no mistake: These shifts sacrifice efficiency for compliance. Restructuring operations in a free market in pursuit of efficiency yields more profit, consumer benefit and economic growth. Doing so under duress to escape arbitrary tariffs may result in survival, but without these benefits. Resources that could have fueled innovation or lowered prices are now squandered on navigating artificial trade barriers. As an important sidenote, roughly half the tariff's cost stems from GM's South Korean operations, a stark reminder of the folly of taxing trade with allies. Rather than strengthening ties with democratic partners through bold free-trade agreements, these tariffs risk pushing nations like South Korea toward China, America's chief adversary. Far from economic strategy, it is geopolitical shortsightedness. Politicians sometimes prefer tariffs to other forms of taxation because they are less visible than taxes on income or sales. This makes it easier to dodge accountability by blaming 'greedy' corporations. For this reason, Trump called Jeff Bezos to deter Amazon from listing tariff costs on purchases. The White House press secretary labeled this a 'hostile and political act by Amazon.' Regardless, protectionism is not cost-free. Sustained tariffs will raise prices, shrink profits, erode real wages and slow economic growth. GM's quarterly results are a warning.
