Achieving recognition for an economic concept that bears one's name is no small feat. Theories like Keynesian, Ricardian, or Malthusian have become foundational in economic thought, akin to the debated Laffer Curve or the Phillips Curve. Among these, one finds Rodrik's Trilemma, a conceptual framework developed by Dani Rodrik, a prominent Harvard professor and frequent contender for the Nobel Prize, known for his seminal work The Globalization Paradox (Antoni Bosch, 2012). Rodrik, with his profound insights, continues to be a leading voice in modern economics.

In a recent conversation with EL PAÍS, Rodrik shared his thoughts ahead of the CREO Forum hosted by Cinco Días and Prisa Media. This dialogue coincided with a significant judicial setback for Donald Trump's administration, as a U.S. court temporarily nullified a substantial portion of Trump's tariffs.

Question: "Democracy, national sovereignty, and global economic integration are mutually incompatible: we can combine two of the three, but never have all three simultaneously in their entirety." Your trilemma is over 25 years old, yet it feels as relevant as ever.

Answer: A few years back, discussing this topic, a Eurozone finance minister remarked, "The problem is that only populists seem willing to explicitly state that these three cannot coexist fully." Populists have no qualms about making their preferences clear: in Europe, they reject further integration, while in the U.S., similar sentiment fuels the political appeal of Trumpism. Meanwhile, moderate forces, whether center-right or center-left, have struggled to acknowledge the challenges and tensions caused by hyper-globalization.

Question: And now we face the consequences.

Answer: Indeed. Perhaps the most troubling aspect is that far-right populists, empowered by this process, show little genuine interest in democracy. If they succeed, the conflict won't be between democracy and the nation-state versus globalization. Instead, my greatest concern is that we might lose democracy itself.

Question: Is Trump, then, a direct result of globalization's management?

Answer: Globalization has enabled demagogues and ethno-nationalist politicians to exploit economic anxiety, the erosion of the middle class, and the vanishing of well-paying jobs. Every society harbors underlying racial tensions and xenophobia. However, when specific sectors and regions suffer severe impacts from trade shocks or, in Europe's case, the austerity following the financial crisis, politicians offering scapegoats and easy solutions, like blaming immigrants, effectively capitalize on these fears. Consequently, the economic disruptions linked to hyper-globalization have contributed to the rise of far-right movements.

Question: Was the impact of hyper-globalization on Western societies underestimated?

Answer: Its divisiveness was underestimated, and its benefits were overestimated. A striking feature of hyper-globalization is that its biggest beneficiaries have been countries like China, which played by their own rules: state intervention, trade restrictions when advantageous, industrial policies, and currency management. Conversely, Europe and the U.S. have not fared as well, witnessing significant divides between winners—professional classes, large banks, multinationals, and highly skilled workers—and losers—those without such advantages. For years, this was regarded as normal, with many politicians responding with "study or move where there is work," when in reality, they should have directly addressed these economic anxieties.

Question: Many years later, the EU, particularly Germany, seems to be stepping up in investment.

Answer: Both Germany's debt brake reform and promises of increased public investment and defense spending are steps in the right direction. However, I miss a coordinated strategy.

Question: Perhaps with more Eurobonds?

Answer: With a broad commitment to increase public investment by a couple of percentage points annually across all sectors: not just defense, but also science, technology, and green industries.

Question: Europe pays less for financing today than the U.S. Yet, it doesn't seem to be leveraging this opportunity as much as it could...

Answer: European integration has not progressed enough to contemplate an articulated pan-European strategy from the center. This is its greatest structural weakness and, frankly, it's disappointing.

Question: Can you imagine a U.S. tariff of 50% on all European products?

Answer: From a conventional perspective, it seems unthinkable, a madness. But if we've learned anything from this Administration, it's precisely its predisposition to do irrational things. It lacks a coherent strategy, and Trump is not exactly a strategic thinker... So yes, anything is possible.

Question: The implications would be enormous.

Answer: Not only for Europe but also for the U.S.: countries imposing tariffs harm themselves first and foremost. However, we shouldn't exaggerate the impact: in the short term, it would be enormous, yes, but also transient. And Europe could still be prosperous and socially cohesive, even if the U.S. continues self-destructing.

Question: Can Trump's policies be judged by rational criteria?

Answer: We need to understand why so many voted for him: economic shocks; middle-class concerns; the disappearance of good jobs... These three factors have reinforced xenophobic and racist discourses. Beyond that, it's clear he offers no serious solutions to the concerns that brought him to power. His second Administration is, in reality, a coalition of convenience among four groups defending different interests. There are the economic nationalists who want to close the country to trade and immigration. There are those worried about the disappearance of industrial jobs, mistakenly believing the solution lies in tariffs. There's the tech right, rejecting any attempt to regulate Silicon Valley and wanting to build a utopia—or dystopia—based on artificial intelligence. And there are also the free speech absolutists, opposed to the liberal and academic establishment.

Question: All seem to be winning.

Answer: Well, the free speech absolutists have clearly lost. However, what seems clear is that many of these groups are more concerned with defeating their opponents than advancing their own goals. They can always say: "I may not have free speech, but my enemies are falling." None of these groups are getting everything they want. But they are getting quite a bit.

Question: There have been, very briefly, two types of responses to Trump in trade: China's and, in a sense, Canada's, which opted for retaliation. And the EU's and Mexico's, which have preferred a more cautious stance, allowing room for negotiation. What is more effective?

Answer: The argument for retaliation is that if you increase your opponent's costs, it might make them back down. However, I do not see that strategic rationality in the Trump Administration: I see in him, rather, a playground bully who throws punches randomly. Most of the time he hits himself, and occasionally others. If you were one of those children, what would you do? It's costly to hit back, so perhaps the smartest strategy is to minimize your own costs and find areas where you can make those costs more apparent to Trump. Mexico has done that: it has made it seem like it gave in without really making concessions. Europe has also played its cards well so far, although there are more things it could do.

Question: What could they be?

Answer: For example, taxing large American tech companies, as proposed by [French economist] Gabriel Zucman. It would hurt the U.S. and, at the same time, generate revenue to increase public investment.

Question: Is Trump at risk of the rest of the world ceasing to take his threats seriously?

Answer: It's already happening: most of his threats are hollow. He has backtracked on many of the things he has said: one day tariffs go up, the next they go down, and then they rise again. This is something that, eventually, the American electorate will have to correct. Hopefully, it will. But meanwhile, we face three and a half difficult years.

Question: Is the end of the global dollar hegemony near, or is it an exaggeration?

Answer: It could be. What Trump has done has made it very clear to the rest of the world that the U.S. is not a reliable ally. It would be unthinkable today for there to be a single central banker not contemplating how to reduce their economy's and payment system's dependence on the dollar. So everyone making decisions about whether it will continue to be the international reference currency is thinking about how to move away from it.

Question: How should we interpret what is happening at Harvard University?

Answer: It's part of a much broader struggle. Trump has chosen Harvard as his main target because of its symbolism. But he miscalculated, thinking it would follow Columbia's lead. He raised the stakes so high, demanding things so clearly unacceptable, that the only possible response was to say no. Thus, Harvard has become a symbol of resistance because the attacks it receives are perceived as an offensive against the fundamental pillars of American economy and society: the rule of law, freedom of speech, the importance of science and technology, and openness to foreign talent. All these values are being attacked when Trump targets Harvard. It's a battle for the soul of the U.S.

Question: And amidst this, the suspension of all visas for foreign students has arrived.

Answer: It's a catastrophe. Few things have contributed as much to the economic and technological power of the U.S. as its ability to attract foreign talent. Look at Silicon Valley, Nobel laureates, the most distinguished scientists and technologists... A substantial proportion of them were born abroad, and the benefits they bring are incalculable. If that is cut off, the U.S. must prepare for a very bleak future.

Question: Once again, a golden opportunity for Europe and its universities.