Nobel laureate Joseph Stiglitz on Trump's presidency: "The probability that democracy will be lost in the US is at least fifty percent."

Donald Trump keeps announcing new tariffs and pushing forward deglobalization. You have also spoken out against globalization in the past. Do you support Trump's policies?

No. Trump benefits from the public's dissatisfaction with poorly implemented globalization. But he doesn't understand its fundamental flaws. His policies are massively damaging the US services sector, for example in education, tourism, and even healthcare. People are no longer coming to the US for treatment. He's also damaging American manufacturers when it comes to goods. Angry at him, Canadians and many other people around the world have stopped buying American goods.

Trump wants to ensure that more production is again in the US. Will he succeed?

I don't think so. Even if he were to succeed in bringing back production, the US doesn't have the global supply chains or the necessary workforce, such as engineers. Trump won't bring jobs back to the US because modern manufacturing is increasingly being carried out by robots. Trump's mind is in the 1950s, not 2025.

So, in your view, Trump is making everything worse?

Yes. He is exacerbating inequalities between developing and industrialized countries. For him, only power counts. He doesn't follow the rules – but other countries have to follow the rules he sets.

There are elements of Trump's policies that some on the political left might welcome, such as government intervention in chip manufacturers like Intel and Nvidia. What do you think about this?

When government intervention occurs in companies, it's very important that they are founded on the rule of law. When a mafioso government approaches companies and burdens them with taxes, that's very worrying. It's like in Saudi Arabia, where Crown Prince Mohammed bin Salman locked hundreds of the country's leading figures in a hotel in 2017 and essentially said, "You'll stay here until you share your wealth with me." That's blackmail, and in such a climate, there's no investment. Investors want a legal framework. If there isn't one, it destroys the market economy.

Do you fear that the US is becoming more like Saudi Arabia?

Yes, it's a mafioso economy. In the long run, the success of market economies is based on the rule of law and the certainty that the actors' property won't be stolen. Trump is destroying the rule of law.

How far do you think he is in this?

In a constitutional state, for example, a law is passed when governments invest in companies. There's a legal framework that also applies to other companies. But if you pursue company-specific policies like Trump, you expose yourself to the risk of corruption at the highest level. This was dramatically seen in the case of Nvidia. Trump allowed Nvidia to sell chips to China if the company paid 15 percent of its revenue to the US government. This means that every company has its own legal framework. That's terrible. The other issue is our innovation economy.

What do you mean by that?

Innovation is crucial for the success of market economies. Universities and research institutions play a crucial role in this. Trump is attacking academic freedom, which I consider, like freedom of the press, fundamental to the functioning of a democracy.

Trump is also trying to gain more influence over the courts. Will the US political system fundamentally change?

The likelihood that the system will withstand Trump's pressure is probably less than 50 percent. In the 2020 presidential election, Trump received seven million fewer votes nationwide than Joe Biden. Yet he continues to claim he won that election—and today, 70 percent of Republicans say the same. So we live in a world where disinformation thrives. If Trump had as much power in 2020 as he does today, he would have overturned the election.

Will Trump try this in the next election?

Absolutely. It's inconceivable that he wouldn't. Congressional elections are taking place in 2026. His poll numbers are currently very poor. There's a widespread public perception that the government isn't functioning well. However, I expect Trump to be able to continue his policies even if Republicans don't hold a majority in both houses of Congress. He governs heavily by executive action and could continue to do so. He has also ignored court rulings.

So you are pessimistic about US democracy?

The courts are still functioning – but the probability that democracy in the US will be lost is at least fifty percent. The everyday lives of many citizens wouldn't change significantly in the short term. But those of scientists would. I already sense a fundamental fear among them.

Is the government also putting pressure on you?

No, not on me. But my colleagues are afraid to sign letters and protest the policies of the US government. Young people, especially those without US citizenship, are afraid to speak out. We have to plan international meetings of scientists outside the US because people can't or don't want to come to the United States.

How do you assess Trump's pressure on the US Federal Reserve?

If monetary policy is politically controlled and becomes the instrument of someone who thinks only in the short term, confidence in the dollar risks being lost. This means more inflation and global instability. Stephen Miran, Trump's Fed Governor nominee, has openly discussed introducing fees on dollar reserves held by central banks. So far, however, no one is taking this seriously; otherwise, the dollar would have plummeted.

In April of this year, after announcing the tariffs, Trump had to back down and postpone their implementation because investors in the bond market put the brakes on him. How likely is it that Trump will continue to be controlled to some extent in this way?

Trump is less easy to tame now than before. During his first term, he thought rising stock markets showed he was doing a good job. He has become disillusioned that the stock market rose during Joe Biden's presidency. For him, power matters. He believes that if he gains control of the Fed, he can finance any deficit and keep interest rates low. Then the bond market would be irrelevant.

This could keep the economy running. But would it be sustainable?

No, it would drive up inflation. Trump is a corrupt real estate developer who likes to borrow money and doesn't like to pay it back.

Is there a grand plan or chaos behind Trump's policies?

Project 2025, published by the Heritage Foundation, has laid out a grand plan aimed at deregulation and increasing the power of the wealthy. So, there's a certain nationalist, Christian agenda. Added to that is Trump's chaotic personality. Some people on his team who hold higher positions have zero government experience. They used to be television hosts or headed the wrestling association. They ask me if there's a plan behind it. Much of it is pure incompetence.

Furthermore, one cannot be sure whether agreements actually apply.

Government officials conduct international negotiations and reach supposed agreements. Two weeks later, they say, "Sorry, we have something else now." This was the case, for example, with the trade agreement between the US and the EU. Shortly after the agreement, Trump announced new tariffs for countries with digital taxes, arguing that they were an attack on US technology companies. The deal between the EU and the US is only a temporary truce. In such a world, no one has trust.

A great deal seems to depend on Trump as a person. He won't live forever either. If he were gone, would his movement be strong enough to sustain itself?

With many authoritarian figures, the entire system depends on them. I'm optimistic that within Trump's "Make America Great Again" movement, there's no immediately similarly charismatic person who would succeed him. J.D. Vance doesn't seem to have the necessary following. However, there are also many cases where an authoritarian leader dies, and their movement then continues in an even worse form. Examples include Hugo Chávez in Venezuela or Robert Mugabe in Zimbabwe. My concern is that someone could act more rationally and strategically and harness popular support more effectively.

But is there also a possibility that the whole thing will settle down at a lower level?

Absolutely. To return to that: There were major grievances in the US that led to Trump's presidency. They have to do with inequality and disparities. Trump reacted to them, exploited them, and in some ways made the situation even worse. But the question is whether the electorate recognizes this.

Could this happen if inflation picks up?

Higher inflation could backfire on him and the MAGA movement. However, he could also succeed in blaming outsiders for the inflation and saying, "We need to become even more aggressive internationally."

Switzerland was hit hard by Trump's tariffs; local companies now have to pay a 39 percent tariff on goods exported to the US. How would you, as a Swiss Federal Councilor, deal with Trump?

I would retaliate and support China's view that Trump only respects actors who respond aggressively to his agenda.

But Switzerland is a small country . . .

Yes, but Switzerland has a global market. The US accounts for only about 13 percent of world trade.

Switzerland has so far done the opposite to avoid even more trouble.

The only language Trump understands is the language of power. The countries affected by the tariffs must cooperate better with each other, rather than submitting to Trump's "one at a time" strategy like the UK. Otherwise, he will dictate everything.