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Fareed Zakaria GPS

Trump's Frenzied First 100 Days; Historical Parallels to Trump 2.0. Interview With Former Canadian Liberal Party Leader Michael Ignatieff; Interview With Brookings Institution Senior Fellow Tanvi Madan. Aired 10-11a ET

Aired May 04, 2025 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[10:00:36]

FAREED ZAKARIA, CNN ANCHOR: This is GPS, the GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria coming to you from New York.

(BEGIN VIDEOTAPE)

ZAKARIA: Today on the program.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I, Donald John Trump.

ZAKARIA: The first 105 days of the second Trump presidency. How will history look back at all that has happened and not happened since Inauguration Day.

I'll get an early assessment from two eminent historians, Jon Meacham and Niall Ferguson. And America's neighbor to the north sends a powerful electoral message to the White House.

MARK CARNEY, CANADIAN PRIME MINISTER: President Trump is trying to break us so that America can own us. That will never ever happen.

ZAKARIA: I'll talk to the one-time leader of Canada's Liberal Party, Michael Ignatieff. Also, two nuclear tipped neighbors at risk of grave escalation once again. India and Pakistan are both on high alert after a militant attack in disputed territory left 26 dead.

Will the tensions turn into war? We'll explore.

(END VIDEOTAPE)

ZAKARIA: But first, here's "My Take."

Let's step back for a moment and recognize where we are right now. The United States has launched a trade war with the world's second largest economy, China. Together, the two countries account for almost 45 percent of global output and more than 20 percent of global trade. And it's entered this battle with remarkably little planning and forethought.

Do we have a sense of where these growing tensions will lead?

It would be easy to blame the Trump administration alone for shooting first and thinking later. More than 80 percent of all smartphones imported by the U.S. come from China, as do 78 percent of all computer monitors.

Can we find new suppliers for these in the next few months?

Meanwhile, China imports lots of oil, gas, soybeans and pork from America, which can be easily bought from other countries around the world.

The truth is, the United States has been sleepwalking into increased economic warfare with China for several years now, probably starting around Barack Obama's second term. All previous measures, though, were small bore compared to where we are now. Tariffs against most Chinese goods are at 145 percent, and China's tariffs against most American goods are at 125 percent.

As Secretary of Treasury Scott Bessent has said this basically amounts to an embargo, which he admitted is unsustainable, which, of course raises the question, why did his boss initiate a strategy that cannot be sustained?

China and Xi Jinping play an important, maybe central role in the rupturing of relations. In 2015, before Donald Trump was first elected, Xi announced his major new made-in-China economic project, an ambitious set of policies explicitly designed to make China less dependent on Western technology. Xi had already aroused American suspicions by making a series of foreign policy moves that were more ambitious, adventurous and militaristic than his predecessors.

Add to this the reality that trade with China had caused job losses in America, especially in electorally important states, and the rise of more hawkish U.S. views around China was inevitable.

But would a less entangled relationship reduce strategic risk? First, decoupling of the two economies would make the U.S. poorer. Under one tariff scenario Oxford economics says U.S. GDP could be 1.4 percent less than it would be otherwise. That's hundreds of billions of dollars of wealth lost annually.

There are also second order effects. Inflation as companies shift supply chains, productivity losses from diminished specialization, and the opportunity cost of disrupted innovation ecosystems. Trade flows will get distorted as Chinese companies set up new ventures in Southeast Asia, Mexico and other places to bypass tariffs. Smuggling will boom.

[10:05:05]

Every American action will produce a Chinese reaction. Consider technology. While Washington has valid reasons to limit Beijing's access to the highest end chips, has it been effective? In chip making and in A.I., Chinese firms like Huawei and DeepSeek appear to be able to produce results that are close to the cutting edge, but often at a fraction of the American cost.

Nvidia's CEO, Jensen Huang, this week noted that half of all A.I. researchers in the world are Chinese, and that China is just slightly behind the U.S. He also explained, more crucially, that sometimes in technology, the country that wins is the one that applies innovations fast and well, not the first mover.

So have Washington's expensive and cumbersome bans on technology only spurred China to innovate, become a fast follower? And could it end up in a better place than if these bans had never been enacted in the first place? It's an uncomfortable question, but it must be asked.

Finally, what would a world in which the U.S. and China had little economic relationship with each other look like? Keeping the two countries deeply intertwined economically, trading, investing and interacting with each other, is a force that makes outright conflict more complicated. It's not a guarantee against war, but surely it is a disincentive.

A cautionary tale comes from the past. In 1940, as Japanese aggression in Asia grew, the U.S. placed an embargo on the trade of certain items with Tokyo. In July 1941, Washington froze Japan's assets and cut off oil exports to Tokyo in response to Japan's invasion of Southeast Asia.

Now, Japan imported nearly 90 percent of its oil from the U.S., and the embargo left it with very limited strategic reserves. The result was not Japanese capitulation. It was Pearl Harbor. Cut off from critical imports and seeing no diplomatic off-ramp, Tokyo concluded that war was preferable to strangulation.

It is not a perfect analogy. A militaristic Japan was choosing war to build an Asian empire, but it is a reminder that sanctions, tariffs, decoupling and isolation do not have a history of ending in peace and prosperity.

Go to CNN.com/Fareed for a link to my "Washington Post" column this week, and let's get started.

When Donald Trump was sworn in for a second presidential term just over 100 days ago, he proclaimed a new golden age for the United States.

(BEGIN VIDEO CLIP)

TRUMP: We will be the envy of every nation.

(END VIDEO CLIP)

ZAKARIA: Today, the question of whether this golden age has arrived depends on whom you ask. But one thing is clear, Trump has profoundly shaken up American domestic and foreign policy.

I want to bring in two great historians and authors for their viewpoints on the start of Trump 2.0. Jon Meacham won a Pulitzer Prize for biography, and most recently, he has written introductions to new hardcover editions of "The Federalist Papers" and "The Declaration of Independence and the Constitution of the United States." Both come out later this year. And Niall Ferguson is a historian and senior fellow at Stanford University's Hoover Institution.

Niall, fair to say that this is the most consequential 100 days since Franklin Roosevelt's?

NIALL FERGUSON, SENIOR FELLOW, STANFORD UNIVERSITY'S HOOVER INSTITUTION: I think that is fair, Fareed. It's hard to think of any 100 day opening in our lifetime that has been so impactful. One of the most striking things to me is that Donald Trump has executed almost on all the commitments he made on the campaign trail, and I counted 37 video commitments on his campaign Web site, which pretty much predicted what he would do, most of it in the form of executive orders or other executive actions.

In terms of the sheer volume of activity, it certainly bears comparison with FDR's first 100 days. But the sign is reversed because we've come out of a boom. Roosevelt came out of a depression. And Roosevelt had a mandate to expand the federal government, whereas Donald Trump campaigned on shrinking it. So in a way, it's like the new deal, but with the sign reversed or the direction of travel exactly the opposite.

ZAKARIA: Jon, that is it seems to me the striking feature, not just that that Trump is sort of trying to tear down while FDR was trying to build up, but Trump is really, after 85, whatever it is, years trying to deconstruct the edifice that Franklin Roosevelt built.

[10:10:13]

JON MEACHAM, PULITZER PRICE-WINNING HISTORIAN: And I'd argue that it's beyond Franklin Roosevelt, that, in fact, what President Trump is doing is tearing down an order both at home and abroad, that has its roots in 1933, but which ratified in 1953, when Dwight Eisenhower becomes president after a 20-year Republican drought and yet refuses, in a classically conservative way, refuses to undo reality.

He wants to manage the world as he finds it, as opposed to revolutionize it, and that creates a conversation really. A kind of consensus about the role of the state and the marketplace, about America's role in the world. That really was the dominant conversation until 2017, until the first Trump term. A brief restoration of that conversation under President Biden and now a re-interruption, I guess, if that's the right term.

And I think that that's what we have to conjure with. And I think what Americans, through the economic prism are conjuring with is, do we really want to undo the entire new deal, fair deal, Eisenhower and indeed Reagan order?

ZAKARIA: Niall, you point out in a piece you wrote on Substack that while there is a lot of flurry and some of these executive orders have big effects on something like the core fiscal issues that actually hasn't been very much done. FERGUSON: Well, the key problem that Donald Trump faces in his second

term is that the debt is much larger than it was eight years ago. It's over 100 percent of GDP. It's like the debt at the end of World War II, and interest payments are absorbing a rising share of government spending and of GDP. In fact, they exceed the Defense budget at this point for the first time in a long, long time.

The other problem, which is closely related, is that, although Donald Trump is radical on certain issues, notably trade, he long ago committed to keep his hands off Social Security and Medicare. And as those are the two biggest line items in the federal budget, that means it's not really full repeal of the new deal in the way that Jon has just said. It's a partial turning back of the clock.

But the key issue, Fareed, and I think we need to focus on it, is the tariffs. The way that Trump most obviously wants to turn the clock back is to turn it back to the time of William McKinley, the one president he referred to most frequently in the campaign last year. McKinley was president in the late 1890s. Before he became president, he was associated with protectionist tariffs.

Now, tariffs have been presented by the president as a number of different things. A source of revenue is one of them, but also as a way of re-industrializing America. The question is, how much damage did he inflict on the U.S. economy on liberation day, April 2nd, when he threatened to hit just about every trading partner of the United States has, with very high reciprocal tariffs?

And I think that's going to determine whether the first 100 days turns into the overture to a golden age or in fact, the overture, the prelude to a recession.

ZAKARIA: When we come back, I'm going to ask Jon and Niall to tell me who Trump looks like in foreign policy, Richard Nixon, Andrew Jackson, Ronald Reagan, when we come back.

(COMMERCIAL BREAK)

[10:18:19]

ZAKARIA: And we are back with our pair of superstar historians, Niall Ferguson and Jon Meacham.

Jon, looking at the world, Trump is sometimes compared -- he compares himself to McKinley. But you wrote a wonderful biography of Andrew Jackson, and there seems to me a lot, a lot in Trump that is Jacksonian. And he puts Jackson up on -- in the Oval Office as one of the presidents he admires because of the kind of unilateralism, the, you know, the sense of fortress America. But, you know, if you mess with us, we'll beat the hell out of you.

Who do you think is the best historical parallel?

MEACHAM: President Trump really defies a glib historical parallelism. I don't think he is as Jacksonian as he thinks he is, chiefly because Andrew Jackson, for all of his manifold sins and weaknesses, for all of the negative things we can say about him, believed fundamentally in the constitutional order. He lost a very close election. He hashtagged it, instead of Stop the Steal, it was corrupt bargain. But he did all that after he left Washington and didn't have a mob storming the Capitol. He believed in the supremacy of the union, in the fact that we were in, as he put it, one great family.

President Trump doesn't, it seems to me, see the country that way. I think we're in a nationalist phase where we value -- too many people value allegiance not to the creed of Americanism, which is one definition of patriotism, but to their own kind.

[10:20:03]

And I think that we're in a fundamental struggle in this hour between nationalistic impulses and patriotic ones.

ZAKARIA: Niall, I want to ask you, I want to hone in more specifically on something. You wrote that one of the challenges Trump faces is that he has been unrealistic about Ukraine, and he's felt that the pressure needed to be put on Ukraine rather than Russia. And you have a wonderful line, and I think in your Substack column where you say the negotiations that Steve Witkoff is undertaking resemble those between the First Little Pig and the BIG BAD Wolf.

How do you think it's going now?

FERGUSON: Well, I certainly was very skeptical about the way that the Trump administration approached ending the war in Ukraine, a desirable objective. But my concern was that much too much pressure was being put on President Zelenskyy of Ukraine, and not nearly enough on President Putin. And I got into something of a fight with Vice President Vance on that issue.

I then said, look, I'll give you guys the benefit of the doubt. And I must say, things are looking better than they did early on because at last, it seems, President Trump is losing patience with Putin's way of talking while fighting and fighting while talking.

But the president's foreign policy seems to me to be very contradictory and hard to understand because part of it is a kind of braggadocio where President Trump talks about annexing Canada and Greenland and taking back the Panama Canal. But when you look closely, his foreign policy is really based on a sense of American weakness.

And here I want to give you an alternative analogy to the one with Andrew Jackson. How about, how about Richard Nixon? It's interesting that some of the president's supporters talk about a reverse Nixon move, meaning that the reason he's so inclined to be nice to President Putin is he's trying to peel him away from Xi Jinping, trying to drive a wedge between Russia and China.

A little bit, though it's a poor parallel like Richard Nixon exploited the Sino-Soviet split in '71 and '72. And I do think there's an element of President Trump, which is Richard Nixon's revenge. They have the same enemies after all. "The New York Times," Harvard, the Department of Justice, the bureaucracy. And I think in many ways Trump remains influenced by Nixon, who was in some ways one of the first people who had influence over him when he was a young real estate guy on the make in New York, back in the twilight years of Richard Nixon's life.

So that's the analogy that I find helpful. Now, I don't think it's very likely that Russia and China are going to split just because President Trump is on the scene. I think it's unlikely that that part of the strategy works. But I do think there's something very Nixonian about shocking the European allies and the Asian allies by your foreign policy.

ZAKARIA: Jon, how do you see Trump's kind of, the overall philosophy, looking at the world? Because there, again, it does feel like it's an effort to very fundamentally undo the kind of FDR, Truman, post-1945 world at some level.

MEACHAM: And again, I think it's not just undoing Democrats, right? I mean, this is Ronald Reagan's world that is being assaulted as well. Free trade, free men, free flow of ideas and goods, standing up to totalitarianism in Moscow. So this is not a red versus blue. This is a Trump versus American consensus. And I think that's important. Perhaps that's what the country wants to do.

But there are an extraordinary number of Republicans in this country I believe, I know a lot of them, who think Ronald Reagan belongs on Mount Rushmore. And yet they are supporting someone who is trying to undo the world that Ronald Reagan wanted to build.

What I think the president is doing is turning inward. And I think that we're going to see -- it may just be that a blow at American prosperity at home will be what makes the country say, let's not turn against a world and an engagement with the world. That, in fact, has created a remarkable story of American influence and American prosperity.

ZAKARIA: Jon Meacham, Niall Ferguson, always a pleasure to listen to both of you. Thank you.

Next on GPS, Canada's conservatives went from a massive lead in the polls to a massive election defeat on Monday.

[10:25:01]

We'll be back in a moment to explore why many say Donald Trump was to blame.

(COMMERCIAL BREAK)

ZAKARIA: Just four months ago, Canada's Conservative Party enjoyed a 26 point lead in the polls. But when Canadians voted in Monday's federal elections, it was the archrival Liberal Party that was victorious.

The explanation for that massive reversal of fortune many say it was Donald Trump. Trump's trade war with America's neighbors to the north and his insistence that Canada would become the 51st state have clearly antagonized many Canadian voters and fueled a rare wave of nationalism there.

Observers say that is what swept the Liberals to victory. In his victory speech, Prime Minister Mark Carney declared that Canada would never yield to Trump's threats.

Joining me now is Michael Ignatieff, a former leader of that same liberal party. Michael, welcome. Give us a sense of the dynamic. So, you know, we don't think of Canadians as highly nationalistic people. What happened?

MICHAEL IGNATIEFF, FORMER CANADIAN LIBERAL PARTY LEADER: I think it's like the laws of physics here. Every action produces an equal and opposite reaction.

You know, Trump's basic campaign is an economic nationalist campaign strongly America first. And this produced a very strong reaction in Canada. On the opposite side, it stimulated a wave of nationalism that I haven't seen in my own adult life.

The country is very different from America, but if you poke it and Trump definitely poked it you got a very, very strong reaction, which I think even surprised Canadians. But there's no question that's what carried Mark Carney back into the prime minister's seat.

ZAKARIA: You know, Mark Carney well. He is -- he's unusual in this role in that he has been a senior government official, a central banker in two countries, Canada and Britain. Do you think that gives him -- is he well qualified to take on Trump?

IGNATIEFF: I think that's what the Canadian public liked about him, sobriety, calm, and obvious economic competence. He's a crisis manager. He was involved in the Bank of Canada stabilizing the economy. After the 2008 crisis he was in Britain stabilizing the British economy after the Brexit crisis.

Canadians looked at that and thought, wow, we really you know, that's what we -- that's who we need in the chair. And the other thing he did, which I think was interesting, you know, he was up against a trained professional politician, Pierre Poilievre, and he was the novice. But it turned out that the novice had a better ear for what the country was saying, and he had a better ear for the sense of betrayal and anger in the country. And so, his language was extremely tough.

But I think beneath that is another message which is, Canada, we're in a very, very tough fight. You know, we're the 10th the size of the United States' economy. He's going to go to Washington. He's got a very tough fight on his hands. But I think he goes to Washington with a country that really does stand behind him.

ZAKARIA: Do you -- you pointed out in an essay in "The Economist" that this -- that this focus is Canada also on a lot of internal problems it has to solve if it's going to have this more, confrontational or more independent relationship with the U.S., Can it -- can it manage that? IGNATIEFF: I think it can manage a lot of things. But it all takes time. And the critical political question is, how much time Mark Carney has got? He doesn't have a majority in the House of Commons. I think he can manage that. But fixing the productive challenges that an economy faces is, you know, takes five -- 10 years.

You've got to change the taxation system. You've got to break down the internal barriers. I think your viewers may not realize how broken apart, how broken up our national economy is with internal barriers. They just need to come down.

All this can be done. But it -- but it -- but it takes time. And there's a -- I think a consensus in Canada that there's been a growing gap between our productivity and the productivity of the United States. This becomes existential to us to the degree that a gap opens up between the standard of living of Canadians, the standard of living of people to the south.

If that gap grows too large, Canadians are going to, you know, move with their feet, they're going to move south. And that would be a threat to the survival of our political experiment. So, this is not just something that ought to be done or we ought to get to one day. It's become existential to our survival.

And Carney knows that. And I think there'll be -- there's quite a lot of consensuses in Canada about what needs to be done and what needs to be done fast.

ZAKARIA: Are there people in Canada who think, look, let's just hunker down, this is sort of maybe two years, maybe, you know, until the midterms, maybe four years until Trump leaves office and we can get through this?

IGNATIEFF: You know, I think there are people thinking that let's -- let's just wait until the 2026 congressional elections and watch Trump get a bloody nose and then hope that he transitions out in 2028. But, A, there's J.D. Vance in the background. And secondly, and more importantly, the Biden administration pursued a very mercantilist, protectionist, put America first use of federal power to boost the economy.

[10:35:00]

It was a -- it was very much a shock to Europe. And so, I think we're not in a world in which we will return to, you know, happy days are here again. We're not going back to a free trade globalizing world. We're going into a -- forward, into a world in which, you know, national sovereignty -- defense of national economic welfare becomes the key priority of states.

And that means it's -- you know, it's every nation for itself. And Canada has to discover that it has got cards to play. When it goes to Washington, it has got to say, look, you need things from our country. You can't function as an economy without us. So, let's make a deal.

But it's not any more a free trade deal as part of a global free trade environment. We're in a new, new world. And I think Canadians are slowly waking up to that rather painful reality.

ZAKARIA: Michael Ignatieff, thank you so much.

IGNATIEFF: Pleasure.

ZAKARIA: Next on GPS, the world watches as tensions are sky high between India and Pakistan. Are the nuclear armed neighbors careening toward war? When we come back.

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[10:40:51]

ZAKARIA: Tensions between India and Pakistan are at a boiling point once again after a militant attack last week in Indian administered Kashmir left 26 people dead, mostly Hindu tourists from India. Indian authorities accused Pakistan of being involved in the attack.

(BEGIN VIDEO CLIP)

PRIME MINISTER NARENDRA MODI, INDIA: We will pursue them.

(END VIDEO CLIP)

ZAKARIA: And Prime Minister Modi vowed to pursue the attackers to the ends of the earth. Pakistan denies any involvement and has called for a neutral investigation into the incident. Kashmir is a disputed region which has already been the site of three wars between the two nuclear armed countries.

Joining me now is Tanvi Madan, a senior fellow at the Brookings Institute. Welcome, Tanvi. Let me ask you the last two times something like this happened 2016 and 2019. India did respond militarily. Do you suspect that that is essentially all but inevitable?

TANVI MADAN, SENIOR FELLOW, BROOKINGS INSTITUTION: That is the expectation that Prime Minister Modi, along with making some diplomatic moves, some economic moves against Pakistan, that he is contemplating a range of options.

ZAKARIA: But does that then risk an escalation in the -- in the past experiences, there was this almost performative, you know, strike -- counter strike, but both sides seemed determined to not let it get out of hand. Do you think that's likely to be the same situation this time?

MADAN: We've seen both sides essentially indicate that they do not want an all-out war or conflict. For India, it is not an Indian interest to get diverted from its broader strategic and economic objectives, including tackling its rivalry with China as well as economic growth and the need to create jobs at home and to play a leadership role in the region.

For Pakistan as well, it has been facing political and economic headwinds. It is -- it has very few partners these days that are backing it. And so, going into a war situation for neither side would make sense.

Having said that, you have seen calls at least to exercise a military option of some sort, to have that calibrated kinetic option on the part of India. Pakistan has made clear that it will respond.

ZAKARIA: What is China's role in all this? Pakistan has been growing closer and closer to China. It has been felt, you know, kind of abandoned by America, which is cozying up to India. Has China played a role in this incident?

MADAN: We've seen China in previous crises back Pakistan supplied with military weapons and spare parts, intervened diplomatically on Pakistan's behalf, but not militarily in the last few years.

What we've seen this time is China back Pakistan, condemned what they've called, and they have identified it as a terrorist attack, but they have backed Pakistan saying they will support Pakistan's legitimate security interests and sovereignty and call for all sides. And this is an indication to India called for restraint as well as supported Pakistan's call for an international investigation into the attack.

ZAKARIA: Is there a role for the U.S. to help defuse tensions? It has played that role in the past.

MADAN: You've already seen, I think, the U.S. play somewhat of a role. You saw the U.S. and several officials initially condemned what they labeled as a terrorist attack, support Indian efforts to combat terrorism.

Vice President Vance was in India when the attack took place, and almost immediately there was a call between President Trump and Prime Minister Modi. What the U.S. is going to be weighing is, on the one hand, not wanting to say that India doesn't have the right to defend itself, but at the same time, perhaps some concern in terms of how India might respond.

And so, the way you heard Vice President Vance talk about it is saying that, you know, he hopes that India will shape its response in a way that doesn't lead to a broader conflagration and hoped that Pakistan, and the way he put it is, to the extent that it is responsible, also responds to Indian asks in terms of counterterrorism action.

[10:45:21]

That also tells you, however, that the U.S. government hasn't seen enough to assign responsibility to who has perpetrated that attack just yet. And they have, for instance, intervened. And there does seem to have been some success in at least pulling Pakistan back from its initial allegation that this was a false flag operation on the part -- on the part of India.

So, you have seen the U.S. play a role but it is -- also seems to be clear that they are not entirely confident that they will be able to restrain India, and they have not even called for that at this stage. ZAKARIA: Tanvi Madan, pleasure to have you on. Next on GPS, would a $5,000 baby bonus persuade you to have a child? The White House is wondering if it would. That story when we come back.

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[10:50:50]

ZAKARIA: And now for the last look. Amid the Trump administration's dizzying efforts to transform the country, one may have escaped your notice. Here is Trump describing it in 2023.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We will support baby boomers, and we will support baby bonuses for new baby boom. How does that sound? That sounds pretty good. I want a baby boom.

(END VIDEO CLIP)

ZAKARIA: "The New York Times" reports that the Trump administration is actively considering so-called pro-natalist policies, including a $5,000 baby bonus to mothers for each new birth.

There is a logic to it. America, like much of the rich world, has a problem. America's fertility rate, the number of children the average woman has is 1.62. That's far less than the so-called replacement rate, the number of children it would take to keep a nation's population stable, which is 2.1.

Population decline means lower economic output. It also leads to more elderly people compared to working age people, which means fewer able bodied workers paying taxes and more old folks drawing retirement.

Some of these problems can be allayed by immigration, but too much immigration comes with backlash, as we've seen throughout the western world. America is far from alone in its fertility crisis. Every advanced economy in the OECD falls short of this mark, except for Israel, due in large part to its ultra-Orthodox community, where the average woman has 6.4 children.

The world's wealthiest man, Elon Musk, says this demographic crisis is, for most countries, the single biggest problem they need to solve. He has fathered at least 13 children to do his part for humanity.

Different countries have found different ways to try to solve the problem. Let's look at Hungary, a place the Trump administration loves. Hungary's Viktor Orban led government offers a sum that is roughly equivalent to five years minimum wage for those who pledge to have a child. Once they have children, new parents can stay at home for up to three years with full pay. Families who want to buy cars and homes are eligible for subsidies.

But as Eva Fodor from the Central European University points out, many of these benefits are not universal. They apply only to heterosexual married couples, and some have income requirements. The results are mixed. Hungary did experience a boost in fertility, reaching a rate of 1.61 in 2021, but that number has sunk to 1.38 in 2024.

Consider another country France. It has been pro-natalist for decades. The country's policies include extremely generous tax breaks for families, cash transfers every month until a child turns three, 16 weeks of maternity leave and four weeks of paternity leave. Since 2000, France has consistently spent around 3.5 percent of its GDP on family benefits, making it the highest spender on this stuff in the OECD.

These policies have paid off. France has among the highest fertility rates in the European Union and 1.66 children per woman in 2023. Demographers say that part of France's success is based on the consistency of its policy over the years, and the sheer amount of money devoted to it.

But money alone doesn't solve the problem always. In South Korea, the government has spent hundreds of billions of dollars on pro-natalist policies, including monthly cash transfers and housing support to families. It has also increased parental leave.

Nonetheless, its fertility rate was 0.7 children per woman in 2023, the lowest in the OECD. This is a legitimate crisis. The country's workforce could shrink by half in the next 40 years.

Why is this happening? Well, there's a fascinating possibility flagged by Michelle Goldberg in "The New York Times." According to the Nobel winning economist Claudia Goldin, the lowest fertility countries are ones like South Korea that modernized quickly.

[10:55:00]

In these countries women gained access rapidly to advanced education and career opportunities. But gender norms have still not caught up. Family structures remain patriarchal, and mothers don't get much help with childcare from fathers. That may make them decide against having more children.

One policy that does seem to make a difference in the fertility rate is paid parental leave. Maybe that's something the Trump administration should consider. The U.S. is the only OECD country that does not offer a national maternity leave, and it spends very little on family support policies, among the least in the bloc.

In other words, however desirable a baby boom may be the U.S. will need a lot more than $5,000 to pull it off. Meanwhile, however Trump may feel about it, immigrants are filling the demographic gap.

Thank you for being part of my program this week, and I will see you next week.

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