ForumforAg Food Systems Podcast Summary

In this episode, Mark Titterington sits down with Tassos Haniotis, former Director at DG AGRI and Senior Guest Researcher at IIASA, and John Clarke, former Head of EU delegation to the WTO and the UN in Geneva, to explore the latest geopolitical shifts and their impact on global trade. We discuss what 2025 might hold for the rules-based order and how key policy developments could reshape international markets. They also consider the implications for European agriculture and the role of the European Commission’s newly published Vision for Agriculture and Food.

Here is a summary of the conversation.

We’ve seen some extraordinary geopolitical developments over the past months. What do they imply for trade and the rules-based international system?

JC: The Make America Great Again policy is about asserting US hegemony in the face of an increasingly expansionist and aggressive China. It’s about using trade policy to make geopolitical shifts. It’s not only a threat to the global economy, but has upturned the rules-based international system that the U.S. created in 1945 – a return to the law of the jungle where might is right.

Was this by accident or design? Does America see the rules-based system as an impediment?

JC: It’s very deliberate; the U.S. sees the international order as a constraint which helped China become a strategic rival and an economic equal. It’s very foolish and the strategy is going to fail, but the world will have a high cost to pay.

How do you assess the international response so far?

JC: It’s been sporadic and fragmented, rather than unified, but we’re seeing some healthy signs from the EU, Mexico, Canada, China, some others. We need a well-coordinated unified retaliation: consumers stop buying American goods, private sector to evaluate where it needs to de-risk. We should also signal that we’re willing to negotiate with the U.S. in a fair way.

Is retaliation likely to inflame the US further?

JC: If there’s no retaliation Trump will assume he can get away with anything and there’s no price to pay for illegal trade behaviour.

TH: To quote the REM song, “It’s the End of the World as We Know it”. A total upheaval in the balance of power and the checks and balances in the U.S. system; a complete change in the world’s alliances, and we don’t know how that will stabilize; and the loss of civility in political relations. There has to be a firm response, but not to respond to what Trump says on a daily basis, rather to anticipate where his actions will go wrong, for example, inflation from his trade policy.

Tassos, you and I attended the United States Department of Agriculture Outlook Conference at the end of last month. What are your takeaways?

TH: There was a mood of uncertainty among federal employees and the ecosystem of consultants supporting them. We also saw what is good about America: high level of technical capacity of the Economic Research Service and generally within USDA. There was a focus on the issues shaping U.S. agriculture’s lack of competitiveness, such as dependency on bulk commodities. Climate change came up, despite official policy: for example, the National Oceanic and Atmospheric Administration provides data on natural disasters, so if the agency is cut or dismantled, how will the U.S. follow natural disasters and determine compensation?

To play devil’s advocate, isn’t Trump delivering on his promises, with some resonance among Americans?

JC: The only positive is to make Europe more united. It’s a disaster across the board, and extremely damaging to the U.S. economically and politically. One reason is that it’s impossible for the U.S. to control China, which is in the ascendant and overtaking America in many sectors.

Tassos, what does that imply for the agri-food system and Europe? Where are you optimistic or pessimistic?

TH: It’s very positive that we recognize the strategic role of the EU agricultural system once again. It’s innovative, competitive and the only global system that has reduced emissions. I worry that we are trying to act on all fronts without clear prioritization. There’s no strong commitment to make sustainable productivity the number one priority in Europe. The one thing that surprised me about the Vision paper was that “competitiveness” appears 30 times, but “sustainable productivity” doesn’t appear once.

We have had 25 years when real prices have largely stabilized, but agriculture is not reaping the benefits because input costs are rising more than agricultural prices, and consumer food inflation is much higher than the return for farmers.

Historians may well see 2025 as a pivotal year? Is it, and what comes next?

JC: Indeed it is, and I’m afraid we’re going to see a serious worsening of the global economy in the next few years. History will also see that the political consensus was gone, and it won’t come back.

TH: The historians in the future to judge whether the Make America Great Again policy worked. Back in the 1930s, similar ideas had a very negative impact on the U.S. economy and the world economy.

If you have found this short summary interesting, there’s lots more to hear in the full conversation. It is available now on iTunes, Podbean or Spotify or on this website.