handicap: Donald Trump’s erratic and harmful policies. Our analysis suggests that what we call the “MAGA tax”—a toxic mix of high tariffs, zero net migration and all-encompassing policy uncertainty—shaved around three-quarters of a percentage point off the rise in American GDP in 2025. That holds lessons for America and other countries desperate for growth. America was teed up for a strong year when Mr Trump took charge in early 2025. Its robust economy should have been supercharged, especially by the boom in artificial intelligence and its consequences for the stockmarket. Instead, growth since then has been solid but, by American standards, unremarkable. Indeed, outside AI-related sectors, policy uncertainty has pushed American business investment into a slump worse than Britain’s after the vote on Brexit. See-sawing tariffs and hostility to immigration, even for skilled workers, have also weighed on the economy. Without this MAGA tax, growth could have been closer to 3% in 2025, not the 2% America got. The damage will continue this year, and probably worsen now that higher oil prices from Mr Trump’s war with Iran are also a burden. In other words, the president’s folly has slowed down a historic boom. One lesson from this is to marvel at America’s dynamism and resilience, even in the face of Mr Trump’s vexing behaviour. Many of America’s advantages are hard to emulate. The country’s continental scale, single language, natural-resource wealth and the fiscal space that comes from issuing the world’s safe asset give it a unique economic advantage over Europe. America’s federalism is helpful, too. Misguided policies at the state level—like data-centre moratoriums or proposed wealth taxes—do not encumber the whole country. People and businesses can move to a different state. But America also shows just how much other rich countries are failing to live up to their economic potential. Much of the recent heightening of America’s advantage stems from its tolerance of disruption. America’s shale-fracking revolution and liquefied natural gas exports have reshaped global energy markets and made its economy more able to withstand the effects of Mr Trump’s war in the Middle East. Its embrace of AI data centres
presages a shake-up of labour markets which, though fraught, could propel its living standards still higher. Unlike its peers, America has built, says Mario Draghi, Europe’s growth czar, “an economy capable of preserving its growth from the disruptions it contributes to”. Other rich countries, by contrast, are held back by conservative regulations, distrust of the financial industry and risk-aversion. They lose because they simply cannot build new industries so fast. Yet another conclusion is that America should raise its ambitions still further. Imagine how astounding its economy would be without the drag of the MAGA tax. For Democrats, that question may soon stop being hypothetical. The party is still wrestling with what of Mr Trump’s agenda to keep and what to discard, should it win back the White House in 2028. Politically, rolling back tariffs may be tricky. Beneficiaries of protection will squeal and besides, many on the left have long been wary of free trade. Similarly, some Democrats now wonder aloud whether Mr Trump’s penchant for bullying companies that displease him could be turned towards progressive ends, such as restricting lay-offs. Be patient, say MAGA types; their policies will eventually yield benefits. In fact the misguided policies, if they endure, are likely to exact a bigger price over time. America is becoming less attractive to high-skilled migrants who make large contributions to its dynamism; more vulnerable to a bond-market crisis as its debts mount; and more tolerant of corruption. Mr Trump’s style of government, if it lasts, will eventually sap the foundations that have made America so rich, by threatening the rule of law and encouraging firms to put lobbying for favours before innovation and the sound allocation of capital. Since the MAGA tax inflicts great harm, unwinding it promises great benefits. Whoever succeeds Mr Trump should seize that opportunity. Economic growth is not a political cure-all—if it were then Kamala Harris, campaigning in a year with growth of 2.8%, would be president. But Democrats and Mr Trump’s Republican successors will struggle to win voters’ affections without raising living standards, as only fast growth paired with low inflation can. Listening to economists’ advice is unfashionable
these days, but there is a free lunch here and America’s next leaders would be foolish not to tuck in. The dangers of misreading MAGAnomics are even greater abroad. Populists everywhere have looked at America and been emboldened by the enticing conclusion that protectionism and industrial policy may be less harmful than free-market economists supposed. Claudia Sheinbaum in Mexico, the National Rally in France and Nigel Farage in Britain are all proposing to copy parts of Trumpist economics. Interventionism is in vogue; the barriers to trade and migration are rising. Even enemies of Trumpism increasingly answer it with a leftist statism of their own. Yet, if America has been dented by the MAGA tax, those policies would knock other countries sideways. ■ Subscribers to The Economist can sign up to our Opinion newsletter, which brings together the best of our leaders, columns, guest essays and reader correspondence. This article was downloaded by zlibrary from https://www.economist.com//leaders/2026/05/21/american-growth-could-be-even-better
Why NATO needs a Plan B Mark Rutte is wrong to quash talk of one. The risks of the alliance unravelling are too great to ignore May 21st 2026 THE FATAL flaw in a commander, suggested Carl von Clausewitz, a 19th- century Prussian general, is obstinacy, or “resistance against our better judgment”. For a modern example of this behaviour, look no further than Mark Rutte, the secretary-general of NATO. For months Mr Rutte has refused to admit that the transatlantic alliance, the cornerstone of European security for more than seven decades, is close to falling apart. That has required wilful blindness. Mr Rutte ignores Donald Trump’s repeated statements casting doubt on America’s readiness to honour NATO’s Article 5, which says that an attack
on one is an attack on all. Mr Trump also talks about withdrawing some forces from Europe. Nonetheless, Mr Rutte, a former Dutch prime minister, has gamely insisted that he has no doubt America is “completely committed to NATO, completely committed to Article 5”. He maintains NATO has no need for a “Plan B” in case America were suddenly to pull out of the alliance. He has even banned any discussion of one within the NATO headquarters. On all of these counts, he is wrong. In Mr Rutte’s defence, he is being diplomatic. Striving to keep America in the alliance, he has flattered Mr Trump, endured his tirades and called him “daddy”. Mr Rutte fears that Europe’s attempts to wean itself off America’s security guarantees may further offend its capricious president, and hasten the divorce that the rest of NATO wishes to avoid. Other European leaders also resort to flattery and try to appeal to Mr Trump’s dealmaking instincts by spending billions on American weapons, many of which are to be sent to Ukraine. In some cases, they have little choice. For instance, Europe has few alternatives to America’s Patriot air- defence systems. Even thinking about a Plan B is enough to give generals the collywobbles. Much of NATO’s deterrence comes from its ability to knit the armed forces of many countries into a single cohesive force under a unified command led by an American general. Without the superpower to keep good order, the rump of the alliance may be weakened by rows about who should be in charge—and doubts over whether they would actually have the authority to call the shots if Europe found itself at war. Yet for all the risks of Europe openly planning for a divorce, it has no choice. Mr Rutte’s optimism has been overtaken by events. Mr Trump’s threats in January to seize Greenland from Denmark, a NATO member, have spurred several European countries to begin secretly planning how to fight without America. Since then, Mr Trump has undermined his officials’ reassurances that the drawdown will be slow and orderly, as Europe takes responsibility for its own conventional defence. He has also announced unexpected cuts to the number of troops stationed in Europe and cancelled the deployment of others. On May 22nd America was expected to reduce the forces it pledges to send to Europe in a war. Its allies cannot be sure they
will get the weapons they have bought from America, which is postponing deliveries in order to restock those used up in Iran. Renovating the American-led alliance will be hard and costly: all the more reason to start now. Europe could Europeanise NATO’s structures; it could form a new alliance; or it could build on embryonic ones, such as the ten- member Joint Expeditionary Force, led by Britain, or the “coalition of the willing” that plans to offer security guarantees to Ukraine. Each would be risky—but less risky than doing nothing. ■ Subscribers to The Economist can sign up to our Opinion newsletter, which brings together the best of our leaders, columns, guest essays and reader correspondence. This article was downloaded by zlibrary from https://www.economist.com//leaders/2026/05/21/why-nato-needs-a-plan-b
How to stop the Ebola outbreak The latest epidemic in central Africa is a warning about future pandemics May 21st 2026 EBOLA IS A terrifying virus that kills 30-50% of the people it infects. Fortunately, the world has been getting better at fighting it. Since 2015 vaccines for Zaire, the most common Ebola strain, have limited its spread whenever hotspots emerged in Africa. Genetic sequencing of that strain has allowed rapid testing, which makes contact-tracing easier. African governments, helped by NGOs, have learned how to triage and isolate patients. Crucially, they have also won the trust of locals, who are horrified by haemorrhagic fevers. But the latest Ebola outbreak is caused by a rarer strain, Bundibugyo, for which there is no licensed vaccine or rapid test. For months it swept