All right. So, I think we are getting closer to have everything being ready here.
Good.
This is part of a broader episode of what's going on.
No, we're kind of hitting all over the place.
Obviously, some budget stuff off the top.
Yeah. Stay budget.
Yeah. No, this is the only one that broadens out beyond state issues.
Okay.
Yeah, we always...
Tier of 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 Kopplovich, 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, you know, Wisconsin's not as isolated as some
people may think it is.
Yes.
Well, it's not just business that hates uncertainty.
It's international relations professors who also hate uncertainties.
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, you know, on the security side, obviously, there's what's going on with Israel and Iran
and, you know, lack of clarity about what role the U.S. 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 going to happen and then a reversal and then a new announcement and a new reversal.
You know, so the way we've, the way the U.S. 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, you know,
substitutes for tariffs are legal under these trade agreements, but the trade agreements
create certainty for business and for governments and Trump is operating effectively as if none
of that exists or the U.S. is not bound by it.
So, anyone who's had to buy coffee lately or 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 by now before prices keep going on?
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, you know, we're going to keep some of Trump's tariffs, but more
or less there's the announcement of those policies and then you can plan going forward,
right?
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 going to suspend those and in 90 days we're going to negotiate
something different and, you know, there's been talk of we're going to have 90 trade
agreements and we don't really have any.
So it's hard to time the market right now because nobody knows what's going to happen
two weeks from now, let alone six months from now, let alone a year from now.
The one thing you can plan for is the baseline now is different, right?
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, right?
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 of things are just structural, right?
That countries specialize in producing different things in the US and China and Europe are the
three largest economies in the world.
And a lot of 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 US and the European Union and China
fit in the global economy.
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 going to have a trade war
with Canada and Canada is talking about we're going to reallocate our economic relationships
away from the US, which has historically been 70% of our trading relationship.
And now we're going to shift that to Europe or we're going to shift that to other countries.
It's hard to do that at all and it's very hard to do 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 going to want to invest in building transatlantic trade that used to go to China
if it's going to get reversed because of new tariff policies in the next six months
for the next three years.
All right.
Mark Koppelovich from UW-Madison.
Thanks for your time today.
Thanks for having me.
Can we keep rolling?
I want to ask one more question.
We're going into the credits.
My bad.
Then I'll take that into the credits if you want.
So what I want to ask you is, okay, 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?
Yeah.
Yes, is the answer, right?
So on the economic side, the degree of globalization, you know, 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, you know, 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 forties or fifties
or sixties, 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 US and you make something and then you sell it abroad, right?
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, you know, 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 know, you don't want to say everything is Nazi Germany, right?
And you don't need to go historically that far because you can look at Hungary or Poland
or Turkey in like more recent cases to see very similar things as what we're seeing with
Trump, you know, both politically and economically now.
But there are a lot of parallels, right?
And I think it's important to think about those parallels and what we learn from them
about, you know, how you stop that, but also like what can go wrong on the political side,
not just on the economic side.
All right.
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.
I'm Frederica Freiberg.
We'll be back next week.
I'm Zach Schultz.
Have a great weekend.