Kenneth Rogoff: "What Trump is doing to Harvard is the worst thing he's ever done to the US, worse than the tariff war."

Economics and chess are two of the passions of Kenneth Rogoff (Rochester, New York, 1953), a professor of Economics and Public Policy at Harvard University and one of the most prestigious researchers in the areas of macroeconomics, exchange rates, and financial crises in the United States, where he worked at the International Monetary Fund. A Yale graduate with a PhD in Economics from MIT, he visited Madrid this Monday to give a keynote address on the "uncertain" future of the dollar at the Rafael del Pino Foundation. Before that, he gave an interview to EL MUNDO in which he expressed his deep concern about President Donald Trump's "improvised" policies.

Are you worried that Trump will ban Harvard from accepting foreign students?

He's being a tyrant, he wants to intimidate Harvard, and he's punishing foreign students. It's absolutely outrageous. It's the worst thing he's ever done to Harvard, along with withholding funding or raising taxes. He's tried every way possible to harm the University; he wants it to cave in. But this is just punishing innocent people and does far more damage to Harvard and the United States than anything else. First of all, our foreign students are many of our best students, and they often stay in the United States because they find our most innovative companies, at the top of medicine, the tech sector... This is our business model: in the US, we capture the best from the rest of the world and integrate them, and the idea of ​​blocking that, I think, is one of the worst things he's done not only to Harvard but to the United States. In many ways, it's worse than the tariff war.

Will there be long-term consequences for science?

There will be enormous consequences. Although we'll see what happens, because Trump's policy can be one thing today and something different tomorrow. He knows it's wrong. He knows it. In fact, just a couple of months ago, he said he would grant a green card to any foreigner who graduated from an American university. Clearly, he has that nickname, "taco" [an acronym for "Trump always backs down"], which pains him because it's true: he hasn't gotten anything from Putin; unless Israel bombs Iran, which I don't know will happen, Iran will soon have a nuclear bomb, and Trump isn't doing anything; in China, he hasn't gotten anything; and he's not going to get anything from Europe either. Trump is undermining the rule of law, soft power, the university system, which has been a gateway for foreigners. He's causing damage that can't be reversed. We may have the most wonderful president in 2028, but our people haven't changed. There's anger. The same voters Trump appealed to are still there. Most of what he's doing is very populist, so I think the damage will be long-lasting. One of the reasons the dollar is dominant is because we're secure. If you're Spanish and you buy an apartment in New York, we're not going to take it away from you... but now, who knows? He's weakening the judicial system, so we'll see what happens in the end, but I think the damage he's doing is very deep.

Can Harvard do anything?

Well, if we could sue the US for damages, we would win. We will survive, but foreign students will suffer irreparable harm. It is clearly one of their most damaging policies among many. I want to be clear that there are deep problems at Harvard, and on the fundamental points Trump criticizes, he is right more often than he is wrong. There is a lack of diversity of viewpoints, a lack of conservative voices at Harvard, Princeton, Yale, Berkeley, and UCLA—at every university you've ever heard of. It's as if all the professors here are socialists. Twenty years ago, for every Republican there were three Democrats; now there are 20, so students don't hear alternative opinions. This is extreme in sociology, history... but even in economics, they teach too much that government is always the solution. This is a problem, and so is antisemitism. It's shocking. It's true that there is a problem, but its solution doesn't involve eliminating Harvard. For me, the closest analogy is when the Khmer Rouge in Cambodia destroyed millennia-old Buddhist temples. That's what he's doing.

Regarding the trade war against the world, are you improvising or following a chess strategy?

Trump would like you to believe he's playing four-dimensional chess. He uses that analogy. But no, he's just winging it. His trade policy is just plain stupid. Tariffs are a bad idea; they hurt the country that imposes them more than other countries, although most people don't know that. But that's not really the problem; the problem is uncertainty. I have a friend who imports wines from Spain and Italy to the United States, and she has a small business, not a big company, and she doesn't know what tariffs are going to hit her. She doesn't have a lot of money, so she needs to pass it on to her customers upfront, but she doesn't know how much to charge them. That uncertainty is spreading throughout the economy, and I don't think it's going to stop.

In its latest forecast, the OECD said US GDP will grow 1.6% this year, but China's growth will remain above 4%. Do you agree?

I think both are overly optimistic. China isn't growing that fast. Official figures may show 4% growth, but prices are falling, interest rates are plummeting, and demand has collapsed. I think China's figures have traditionally been softened, but not skewed upward or downward. However, I think they've been exaggerated in recent years. China will be lucky to achieve average growth of 3% over the next decade.

Is a shift in geopolitical power taking place?

We're seeing a rift. That's for sure. China and the US won't be as integrated as before, and Europe will have to learn to assert itself much more. But it's not all Trump's fault: China was planning to take Taiwan, and I think that will happen; Putin is trying to take Ukraine; Iran is still trying to take over the Middle East... Trump isn't creating these things, but he is accelerating the process.

In a recent article, you asked whether Europe's economic stagnation was due to insufficient stimulus or a "sclerotic and bloated" welfare state. Do you have an answer to that question?

Clearly, it's due more to the sclerotic and bloated welfare state than to a lack of stimulus. That's what has caused Europe to fall behind the US. Twenty or 25 years ago, they were on par. Today, it has left it far behind. This isn't because there's more stimulus in the US, but because of less regulation. It's a more dynamic economy, with lower taxes... so having smart, targeted, and timely stimulus is very good, but that's not Europe's main problem.

Which is it?

The main problem in Europe is the lack of dynamism. The difference between the US and Europe lies almost exclusively in taxation, biotechnology, and technology. If we exclude our technology stocks, the US stock market hasn't really performed better than the European one. If we exclude technology productivity, the US hasn't grown more than Europe.

If we want to maintain the Welfare State, what can we do?

The only sure solution would be to grow very quickly, but that's not easy to achieve. Europe is overregulated. I just came from Germany, which used to be very efficient, and now it's a disaster. They know that to do anything, you have to overcome many regulatory hurdles. But there's no simple answer to these things; the Draghi report, for example, has some very good ideas. The problem is, as it shows, lower productivity is what makes incomes lower here. Now companies want to move out of the US, students want to leave, money wants to leave... It's an incredible opportunity for Europe right now to reassert itself as a geopolitical force, which I think would be very valuable for stabilizing the world.

In Spain, for example, despite GDP growth, inequality is increasing. Is this the evil of our time?

When growth is rapid, inequality increases, but that doesn't mean that people in the lowest strata are doing worse than if the country weren't growing. For example, if you're in the bottom 20th percentile in the US, according to any economic indicator, you're above the 50th percentile in Spain. I think if you look at Spain and ask how things have changed relative to Portugal, I'd bet that those in the 20th percentile have fared better than in many other places in Europe. This would be the inequality I call community-based, but for me the deep problem of inequality in our time isn't what's happening within Spain or France or the United States, but rather that Africa has fallen far behind, and we're going to pay for it in terms of migration crises.

In his talk today, he'll discuss the "uncertain" future of the dollar... will it lose its hegemony?

Well, it reached an incredible peak, it's been falling, and with Trump, it will fall faster. It's not going to kill the dollar. Nothing is going to replace it. In fact, let me put it more precisely: nothing is going to replace it anywhere. But in Asia, the Chinese currency, the renminbi, will become more important, and the euro will be used more in Latin America, Africa, and other countries. As the United States gets worse, the euro will get a little better. It's not going to change overnight, but we're likely to have a major fiscal crisis in the US in four or five years, maybe much sooner. That will also hurt the dollar. It will hurt everyone, but it will also hurt the dollar.

Will this crisis lead us to a global crisis?

Well, when the US has a crisis, it creates a lot of volatility everywhere. Everyone still lives in a dollar-dominated world, and when the US has high inflation, volatility, and a recession, it's bad for everyone.