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This was the year populists made real efforts to challenge the economic consensus that has set the terms of the global economy for decades.
How are they doing?
It’s a mixed bag. President Trump’s trade war achieved some gains but has yet to deliver the type of change many populists have called for, like a rollback of China’s interventionist industrial policies. Britain’s plan to leave the European Union has not made it through the country’s Parliament. But Italy’s populist government this week reached a fiscal deal with the European Union that appears to be a slight win for the country. And some of the populists’ economic ideas appear to be gaining ground.
Mr. Trump’s trade wars.
Populists have long contended that the global system of free trade hurt the livelihoods of many American workers. Mr. Trump’s trade war showed that it was not easy to force big changes in the arrangements that underpin the flow of trillions of dollars of trade.
Mr. Trump has yet to bag anything big, like a credible commitment from China that it will move away from its Made in China 2025 program, which his administration views as particularly unfair and protectionist.
The Trump administration began by imposing tariffs on countries to force them to agree to his demands. But that confrontational strategy did not press China or the European Union to surrender. Instead, the Trump administration struck truces with China and the European Union and got mild concessions from other countries.
The recent declines in the stock market, and the Republican loss of the House of Representatives most likely played a big role in persuading the administration to opt for détente.
Still, the United States did win some concessions from China in recent weeks, and since the country’s economy appears to be weakening, it may give more ground.
On the battlefield of ideas, Mr. Trump’s trade war has helped increase skepticism about free trade. Congress did not mount much resistance to his trade policy. And the most recent annual statement from the Group of 20, a forum for governments, said the international trade system was “falling short of its objectives.” Notably, it did not include a regular commitment to fight protectionism.
Rome is not burning (yet).
After taking office in June, Italy’s populists quickly let the European Union know that they would not stick to the previous government’s fiscal targets for next year. Italy’s new government said it expected its budget deficit to grow to 2.4 percent of gross domestic product in 2019. That number was too high for the European Union, and the tension between Rome and Brussels caused a plunge in Italian government bonds and appeared to weigh on Italy’s economy. But this week, Italy and the European Union agreed on a deficit of 2.04 percent of G.D.P. for 2019. True, the figure is lower than the populists’ desired target, but it’s significantly larger than the deficit target (0.8 percent of G.D.P.) Italy’s previous leaders agreed to.
Italy’s case was helped by developments in France, where President Emmanuel Macron recently promised to lift spending to try and quell populist protests. France’s budget deficit is now expected to reach 3.4 percent of G.D.P. next year.
Will “Brexit” fail?
Populism would face a big defeat if Britain ends up staying in the European Union after it voted to leave in 2016. Prime Minister Theresa May’s government forged a departure agreement with the bloc last month, but it appears to lack the votes to get approved by the British Parliament.
Several possible paths lie ahead. Britain could leave the European Union without a deal, an outcome some populists might favor. Perhaps more likely, Parliament, fearing an economic crash, would vote for Mrs. May’s deal or a similar deal that ties Britain closer to the bloc. And the probability of a second referendum, in which voters may be asked if they still want to leave, continues to rise.
Even if voters opted to remain in the European Union, the furor that might arise from holding a second vote could fuel populism in Britain for years to come.