Alright, so I think we are getting
closer to have everything being
ready here.
This is part of a broader episode
of.
No, we're kind of hitting all over
the place obviously some budget
stuff off the top.
Yeah state budget state budget.
Yeah No, this
this is the only one that
broadens out beyond state issues.
Okay
Terror threats and trade wars
continue, Israel launches an
attack against Iran, and the Trump
administration signals it may bring
the U.S. Into a war in the Middle
East. There are a lot of
developments around the world that
are being felt back here in
Wisconsin. And for more on this, we
turn to Mark Koplovich, professor of
political science and public affairs
at UW-Madison, specializing in
international relations and
political economy.
Thanks for joining us.
Thanks for having me.
So we've heard over and over that
business loves certainty, but these
seem to be very uncertain times.
Yes, deeply uncertain times.
And what does that mean for
business, especially because we're
interconnected.
Wisconsin's not as isolated as some
people may think it is.
Well, it's not just business that
hates uncertainty.
It's international relations
professors who also hate
uncertainty.
So in general,
really bad things happen in world
politics when there's a lot of
uncertainty.
And both on the security
side and on the trade policy side,
that's what we're seeing right now.
So on the on the
Security side, obviously, there's
what's going on with Israel and Iran
and lack of clarity about
what role the US is going to play in
that.
But in terms of tariffs and economic
policy, the last
five months under President Trump
has been week
after week of uncertainty
because the way the
tariff policy is going is
an announcement of what's gonna
happen and then a reversal and
then the new announcement and a new
reversal.
And so the
way we've, the way the
US and other countries of the world
for decades now going back to
World War II.
Have tried to deal with this is by
setting up the World Trade
Organization and a bunch of
international treaties where you
lay out what countries' obligations
are, both
moving towards free trade, but also
a lot of tariffs and
substitutes for tariffs are legal
under these trade agreements, but
the trade agreements create
certainty for business and for
governments.
Trump is operating effectively as
if none of that exists or the U.S.
Is not bound by it.
Anyone who's had to buy coffee
lately or is thinking about a new
vehicle knows that prices are rising
Is there any sense for
whether a business or an individual
to try and time the market or is
it just buy now before?
Prices keep going up
Yeah, I mean, so you could imagine,
I think it's the second one, because
you can imagine a
world, and this
happened more or less under the
Biden administration, with we're
going to put new tariffs up on
China, and we're gonna keep
some of Trump's tariffs.
But more or least there's the
announcement of those policies, and
then you can plan going forward.
And both consumers and businesses
can kind of make medium and long
term purchasing and investment
decisions based on that.
What's happening now is we're
going to have 10% tariffs on China,
I know they're going to be 145%.
I know we're gonna suspend those and
in 90 days we're gonna negotiate
something different and you know
there's been talk of we're gonna
have 90 trade agreements and
we don't really have any yet.
So it's hard to time the market
right now because nobody knows
what's gonna happen two weeks from
now let alone six months from now,
let alone a from now.
The one thing you can plan for
is the baseline now is different.
So Trump has invoked
the International Emergency Economic
Powers Act to put up
a baseline 10%
tariff on everybody in the world,
some higher tariffs on Mexico and
Canada and China.
So the one thing we all know
is some things are now more
expensive.
But there's a lot of uncertainty now
about, is that 15%
or 150% going forward?
We've heard a lot about trade with
China being impacted by tariffs,
especially in agriculture.
Your specialty is the European
Union. Can we find new markets
there? Does anyone want Wisconsin
soybeans?
It's hard to shift things
completely.
I mean, a lot of things,
you know, as I talk to my students
and talk about the global economy, a
lot things are just structural,
right?
That countries specialize in
producing different things and the
U.S. And China and Europe are the
three largest economies in the world
and a lot the trade
flow patterns and why we have a
deficit in some things and a surplus
in other things is just kind of
structurally where the U S and the
European Union and China fit in the
global economic.
So it's hard to reallocate
what we would sell to
China or what we buy from China to
the EU because Europe doesn't
buy and sell exactly the
same things.
And the Canadians are wrestling with
this too now if we're gonna have a
trade war with Canada and Canada's
talking about, we're going to
re-allocate our economic
relationships away from the
U.S. Which has historically been
70% of our trading relationship
and now we're to shift that to
Europe or we're shift that other
countries.
It's hard to do that
at all, and it's very hard to that
quickly, right?
So you can imagine if
we're in this new world where these
types of trade policies become
the new permanent over the next
five or 10 years, then yes,
structurally things will shift, but
in the short term, it's the
uncertainty. Nobody's gonna want to
invest in building transatlantic
trade that used to go to China
if it's gonna get reversed because
of new tariff policies in the next
six months for the next three years.
Mark Koplowich from UW-Madison,
thanks for your time today.
Thanks for having me.
Can we keep rolling?
I wanna ask one more question.
Oh, my bad.
And then I'll take that into the
credits if you want.
So what I want to ask you is.
We'll put this up on the web.
Is there a historical parallel here?
There've been a lot of comparisons
drawn to the 1930s,
1950s, authoritarian governments on
the rise, the slide of democracy.
Are there fair comparisons, or is
the world so much different in terms
of interconnectedness that it's not
really relevant?
Yes, is the answer, right?
So, on the economic
side, the degree of globalization,
we've spent 80 years, basically,
since the end of World War II,
moving towards more
and more free trade,
institutionalized around rules set
by the World Trade Organization and
other, we used to have NAFTA,
now it's called the USMCA, and
there's other trade agreements,
and so.
The world is orders
of magnitude more integrated on
trade and finance than it was in the
40s or 50s or 60s.
And there's really no going back
from that, largely
because we as consumers all like
all the stuff we get that's
made all over the world at
affordable prices, right?
And businesses do also.
Production is globalized now.
It's not just like you get a bunch
of inputs that are made in the
US, you bring them to a factory in
the U.S. And you make something and
then you sell it abroad.
And if you think about like Boeing
building airplanes, the parts come
from 70 different countries
and so firms are
just dependent on globalization in a
way that they weren't before.
The parallels are on
pushing back against that, right?
So what you're seeing with
rising authoritarianism
and populist economic
policies and protectionism and
things like that is very much what
you saw in the 1920s and the
1930s.
In the wake of the Great Depression
and in response to economic
uncertainty.
So those of us that are political
scientists that study
other countries or study history,
and we've seen this movie before,
that the backlash
against globalization and
the backlash against democracy
tend to
go together.
So you don't wanna say everything is
Nazi Germany.
And you don't need to go
historically that far because you
can look at Hungary or Poland
or Turkey in more recent cases
to see very similar
things as what we're seeing with
Trump, both politically and
economically now.
But there are a lot of parallels,
and I think it's important to
think about those parallels and
what we learn from them about how
you stop that, but also what can go
wrong on the political side, not
just on the economic side.
For more on this and other issues
facing Wisconsin, visit our website
at pbswisconsin.org
and then click on the news tab.
That is our program for tonight.
Frederica Freyberg will be back next
week. I'm Zach Schultz, have a great
weekend.