Today, Philip Zelikow deconstructs the history of laws and principles that have brought the Trump administration’s trade agenda into a collision course with the Supreme Court. John H. Cochrane ties the fiscal discipline demonstrated by Switzerland to its very low inflation numbers. And three of Hoover’s most prominent historians debate how America is faring in the second Trump administration.
The Economy
At Freedom Frequency, Senior Fellow Philip Zelikow explains why the tariffs case, now before the US Supreme Court, may be one of the most important cases in American history. He explains the evolution of trade law alongside emergency powers, and how their constitutional authorities coexisted well until 2025, without either Congress or the White House thinking that a president could freely substitute one for the other. The one exception, at the heart of the current case, is rooted in a misleading 1971 precedent, an episode in which it turns out that President Nixon had not invoked the emergency powers President Trump is now claiming. Read more here.
Writing on his blog, Senior Fellow John H. Cochrane discusses the relatively low inflation experienced recently in Switzerland. He argues that Switzerland’s rapid return to low inflation mainly reflects its quick achievement of fiscal balance after the stimulus spending of the COVID-19 pandemic. The nation also has a constitutionally mandated debt brake that forced the pandemic deficits to be reversed quickly, restoring primary surpluses and credibility in debt markets. In his fiscal theory frame, inflation is the price-level response to expected government deficits; if a state reins in deficits, inflation subsides without requiring deep recessions. Monetary tightening, the strong Swiss franc, and competitive markets helped, but he treats them as secondary or as byproducts of the nation’s fiscal discipline. The policy lesson for the US and Europe is that persistent deficits sustain inflation, and only fiscal consolidation can durably bring it down. Read more here.
Revitalizing History
On the latest episode of Uncommon Knowledge, Distinguished Policy Fellow Peter M. Robinson asks senior fellows Niall Ferguson, Victor Davis Hanson, and Stephen Kotkin to entertain a fundamental question using the Trump presidency as a backdrop: Is the United States in decline or on the cusp of a grand renewal? The three historians debate the consequentiality of the Trump presidency, rating its degree of consequence to world history on a scale of one to ten. They also explore Trump’s mandate for revolutionary change, the transformation of the Republican Party, the current state of relations between China and Taiwan, the state of US universities, and how to address the looming fiscal crisis. They move on to ask whether Trump’s 2024 election win has fundamentally changed the nature of America and what this all means as America’s 250th birthday next year looms. Watch or listen to their conversation here.
Hoover Visiting Fellow S. Paul Kapur is the new assistant US secretary of state for South and Central Asian affairs, the State Department announced. Kapur brings to the role a combination of policy experience, regional expertise, and academic leadership focused on the strategic dynamics of South and Central Asia and the broader Indo-Pacific. He is a visiting fellow at the Hoover Institution and a professor at the US Naval Postgraduate School in Monterey, California. Kapur served from 2020 to 2021 on the State Department’s Policy Planning Staff, where he worked on issues related to South and Central Asia, Indo-Pacific strategy, and US-India relations. He directs a US-India Track 1.5 strategic dialogue, as well as other regional engagements, for the Department of War (Defense). Read more here.
Confronting and Competing with China
Writing in The Washington Times, Visting Fellow Miles Maochun Yu argues that the Chinese Communist Party (CCP), with its demand for control over even the smallest export of rare earth minerals, has overplayed its hand. “This stunning demand is more than an act of economic coercion; it is also an unmasking of the CCP’s true strategic blueprint for global dominance,” he writes. In response, Yu says, the free world should view the CCP as a “strategic predator” and continue re-orienting supply chains away from China and states aligned with it. He says the US response of 100 percent tariffs is welcome, but the global community must ask itself whether China even deserves to remain a participant in the global trade system. Read more here.
Related Commentary