A strategy that challenges global finance
by Patrizio Ricci
Everyone is familiar with the tariffs imposed by Trump on various countries. However, the White House has yet to release a comprehensive document outlining his full economic plan. Still, by observing the measures already adopted and listening to the statements of his key economic advisors, the contours of his strategy are becoming increasingly clear.
The central goal of Trump’s economic strategy is to raise the wages of the American working class. This is a fundamental — though not exclusive — pillar of his tariff policy. It’s an often-overlooked aspect, but crucial to understanding the deeper logic behind his approach: to rebuild the strength of productive labor, reversing decades of offshoring and wage compression.
As Robert Lighthizer, former U.S. Trade Representative, explained:
“Tariffs are not just about punishing unfair competitors, but about bringing jobs and industry back to the United States, improving wages for American workers.”
(R. Lighthizer, No Trade is Free, 2023)
Similarly, Trump’s economic advisor Peter Navarro repeatedly stated:
“Bringing jobs back to America is essential to strengthening our economy and our security.”
(P. Navarro, Death by China, 2019)
Of course, the real effectiveness of these policies remains a subject of debate among economists. Some studies show that tariffs have had mixed effects — benefiting some sectors while harming others, also due to retaliatory trade measures from foreign countries.
Finance Detached from Reality
In this light, the heavy losses seen in the stock markets do not appear to be a misstep, but rather a foreseen — if not intentional — effect. The question is simple: can finance thrive while the real economy collapses?
During the Covid-19 pandemic, this is exactly what happened. Factories were shut down, people were confined to their homes — and yet stock markets soared. This anomaly clearly exposed the disconnect between financial markets and the real economy, driven by easy liquidity and speculation.
As the International Monetary Fund highlighted in one of its reports:
“Excessive liquidity and low interest rates inflated markets, creating an increasingly dangerous gap from the fundamentals of the real economy.”
Today, if the markets are correcting, no one should be surprised. It’s a return to reality. Only companies with solid foundations — based on real goods and tangible productivity — will weather the storm and lead the recovery.
But this will only be possible if governments genuinely choose to support the real economy and families, instead of continuing to prop up a virtual and self-referential financial system. As economist Nouriel Roubini warns:
“Over-reliance on finance can lead to systemic crises. We need a return to investment in productivity, infrastructure, and innovation.”
(N. Roubini, Crisis Economics)
Europe, Hostage to Its Own Architecture
In Europe, however, the picture is even more complex. Countries like Italy are effectively hostages to the monetary policies of the European Central Bank — a technocratic institution that operates independently, bound by the rigid constraints of its own statute.
The ECB does not answer to the European Parliament, but functions as a separate entity with a single mission: price stability — often ignoring the needs of the real economy. Within this framework, the economic policy choices of individual nations are stripped of real effectiveness, while centralized management is reinforced.
Joseph Stiglitz has sharply criticized this setup:
“A monetary union without a fiscal and political union cannot work. The ECB acts like a bank for Germany, not for Europe.”
(J. Stiglitz, The Euro, 2016)
Even the Stability and Growth Pact — though currently under revision — has often prevented governments from adopting expansive policies during critical times. This has led to stagnation and discontent, fueling debate on the need for a more flexible and democratic European governance.
The Question of Trade Agreements with the US
Will individual European states attempt to forge ad hoc agreements with the United States, seeking new room for maneuver in an increasingly unstable economic and geopolitical context? This brings us to a crucial issue: trade policy is an exclusive competence of the European Union.
This means that EU member states cannot independently negotiate agreements with third countries. Every agreement must go through the European Commission and follow a specific EU-level process. In principle, any bilateral deal would violate EU treaties.
Yet in the face of Brussels’ inertia and the European institutions’ inability to act swiftly, some governments are already making autonomous moves. Italy is one example: Prime Minister Giorgia Meloni is scheduled to visit Washington on April 16 to meet with Trump, and — according to her own statements — she will seek direct agreements for Italy while also presenting herself as an “intermediary” to the EU.
In this light, it becomes clear: the EU itself becomes the problem.
This is acknowledged even by economist André Sapir, who notes:
“The tension between national interests and the common trade policy is structural. The EU must decide whether to strengthen integration or grant greater freedom to the member states.”
(A. Sapir, Europe’s Trade Policy: Between Globalism and Protectionism, Bruegel, 2018)
And this is nothing new. Frictions between national interests and the EU’s common line have emerged in the past. But today, the stakes are higher than ever — and the euro itself risks once again becoming a political weapon.
The euro, conceived as a symbol of stability and cohesion among member states, risks being used as a tool of pressure, especially on those countries less enthusiastic about the dominant political line, less in favor of rearmament, or more open to dialogue with Trump’s America.
One can bet that the European Commission will respond harshly to any unilateral initiatives. It’s not unlikely that infringement procedures will be launched for treaty violations — all to reassert Brussels’ authority.
But the issue goes even deeper. In this context, the notion of “currency as political weapon” is not just a metaphor — it reflects a structural weakness of the euro. As Benjamin J. Cohen has pointed out:
“The euro is the only major global currency without a sovereign state behind it. Its capacity to function as a reserve and trading currency remains limited.”
(B. J. Cohen, Currency Statecraft, Cornell University Press, 2021)
In a world where politics is increasingly conducted through currencies, the euro — a stateless currency — risks becoming more of a straitjacket than a tool of freedom.