This Is Not A Drill with Gavin Esler Trump's economic warfare – Are there any winners?
Sep 22, 2025
In this discussion, Adam Posen, President of the Peterson Institute for International Economics and former Bank of England member, unpacks the ramifications of Trump's economic strategies. He explores how tariffs and inflation impact global security and the shifting dynamics as allies reconsider reliance on the U.S. dollar. Posen warns that a transactional foreign policy could weaken long-term partnerships and security benefits, raising concerns about the future of economic leadership. Tune in for an enlightening look at current global economic challenges!
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U.S. As Global Economic Insurer
- Since WWII the U.S. acted as a global insurer by providing rule of law, naval security, trade rules, liquidity, and the dollar as a safe asset.
- Adam Posen argues that recent U.S. policy is eroding that insurer role, reducing global benefits once widely shared.
Domestic Assault Meets Transactional Foreign Policy
- Trump-era policies mix domestic attacks on technocrats with international transactionalism aimed at extracting better deals.
- Posen says this combination undermines expertise and public missions while seeking short-term gains abroad.
Tariff Effects Are Delayed But Real
- Tariffs take time to show effects due to inventories, supplier shifts, and corporate hesitancy, but data now shows clear sectoral inflation and slower growth.
- Posen expects first-round tariff effects to peak around mid-2026 and to accelerate inflation now.
