08/11/2025

We are witnessing a historic shift in the global economic order. The framework that for decades provided a degree of stability in trade relations—anchored in multilateral rules, independent institutions, and diplomatic agreements—is giving way to a more fragmented, transactional, and volatile paradigm. The foundations of the former international consensus—trade liberalization, central bank independence, and the integrity of statistical data—now appear more vulnerable than ever.

Tariff policy, once shaped by technical or strategic criteria, has become a declared instrument of geopolitical leverage. Its purpose is no longer to shield domestic industries or balance trade flows, but to penalize certain conduct, restrain competitors, or reward temporary allies. This transformation has blurred the boundary between diplomacy and coercion, creating a climate of profound uncertainty for businesses, investors, and governments alike.

Several examples are particularly telling. Switzerland offers a striking case in point: a country long regarded as a symbol of stability, neutrality, and economic openness was suddenly hit with tariffs approaching 40%, with no apparent technical justification and no formal channels for appeal or review. Diplomatic protests were disregarded, and the economic repercussions were immediate. It is troubling to observe how the logic of unilateral punishment can be applied even to long-standing allies.

A similar situation has unfolded with India, which in the space of a few weeks went from being on the brink of concluding a trade agreement with the United States to becoming the target of new sanctions. The catalyst: its imports of Russian oil. Neither the existence of ongoing negotiations nor the goodwill that had been built up proved sufficient to prevent such measures. The deployment of tariffs as an instrument of pressure signals a shift in the very conception of international trade: no longer as a network of reciprocal commitments, but as a contest of power in which those with the greatest leverage enforce their will.

The challenges on the horizon are far from minor. Strategic sectors such as semiconductors and pharmaceuticals, until now exempt, may soon face new tariffs. There is even talk of imposing duties of up to 100% on chips, except for companies willing to relocate production to the United States. This kind of selective conditionality, presented as an industrial incentive, creates significant distortions and rewards opportunism over efficiency. It also sets a dangerous precedent: using geostrategic loyalty as a criterion for market access.

The greater concern, however, is not only what is being done, but how. Most of these tariffs have been introduced under emergency powers and are now the subject of unresolved legal challenges. Should the federal courts strike down the use of these measures, the administration would have to seek alternative legal mechanisms to pursue its agenda—and could even be compelled to return revenues collected under regulations now in dispute.

Beyond the trade arena, a still more serious trend is taking shape: the deliberate erosion of institutional independence. The removal of the Commissioner of Labor Statistics on unfounded charges of political interference, and the appointment of presidential allies to key posts at the Federal Reserve, point to a clear pattern. What is at stake is no longer a mere difference in technical approach, but a systematic effort to exert control over the institutions that generate and manage information critical to the economy.

The implications are serious. The credibility of data—on inflation, employment, and wages—is essential for markets to function, for monetary policy decisions to carry legitimacy, and for society to gauge the country’s economic trajectory. If that trust is undermined—if official figures come to be seen as political instruments rather than impartial assessments—the damage will be profound and enduring.

In this environment, speaking of “free markets” or “independent institutions” is difficult without a sense of resignation. The combination of aggressive protectionism, strategic intervention, and the erosion of institutional autonomy is redefining the rules of the game. It is no longer simply a matter of understanding economic dynamics, but of anticipating and interpreting political decisions, while adapting to an environment in which legal and regulatory certainty is becoming ever more elusive.

This is not a temporary fluctuation, but a structural shift. The order we once knew has fractured, and the new one has yet to take shape. In this period of transition, the only certainty is that the logic of exceptionalism, coercion, and political loyalty has supplanted the logic of rules, multilateralism, and institutional integrity. That reality calls for a new kind of analysis, a new strategic approach, and, above all, clarity of vision.