Cover image: Port cranes in Rotterdam. © Raimond Spekking / CC BY-SA 4.0 via Wikimedia Commons.

What Matters in 2025

The age of leverage—without losing your moral compass

Leverage can move markets; only legitimacy keeps them stitched together.

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Table of Contents

1. Introduction
2. The Leverage Playbook
3. The Trump Doctrine
4. The Hidden Costs
5. When Pressure Is Justified
6. A Responsible Playbook
7. A Quick 2×2
8. What Matters Most
9. Sources
10. TL;DR

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Introduction

2025 feels like the year leverage became the operating system of both politics and business. Tariffs, sanctions, executive orders, app bans, platform rules, supply-chain chokepoints—everywhere you look, power is exercised by tightening (or threatening to tighten) a screw someone else depends on. The logic is simple: if leverage gets results, get more of it. The danger is equally plain: if win comes to mean coerce, legitimacy and trust begin to leak out of the system.

This essay looks past the headlines to the habits forming underneath—how leverage works, what it leaves behind, and the guardrails that keep power from corroding the institutions that wield it.

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The Leverage Playbook

Modern economies are built as hubs and spokes. Sit at a hub—payments, semiconductors, platforms, logistics—and you can both see more and squeeze more. In practice, three moves dominate:

Governments deploy tariffs to impose visible costs and create bargaining chips; they wield sanctions and export controls to weaponize access to finance, technology and markets—the classic chokepoint; and they use administrative power—rulemaking, investigations, procurement, licensing—to quietly reward allies and discipline opponents. In a tightly wired world, these tools bite fast and travel far. The network logic is what scholars call weaponized interdependence.[^5]

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The Trump Doctrine

Whether you cheer it or dread it, the second Trump term normalized leverage as a first resort. Spring opened with a 25% tariff on imported autos (announced March 26, 2025; implementation beginning April 3).[^1][^7] Summer broadened the canvas: on July 12, 2025, the administration said 30% tariffs would apply to EU and Mexico.[^3] By early autumn, a U.S.–EU deal confirmed 15% on autos and parts, retroactive to August 1—with carve-outs for critical goods—formally implemented on September 24, 2025.[^2]

An April 2 package outlined a baseline global tariff with country surcharges, signaling a generalized leverage strategy rather than a narrowly targeted one.[^4] The figures matter, but the posture matters more: pressure first, terms later. That choreography has migrated into boardrooms and ministries well beyond Washington.

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The Hidden Costs

Leverage is not free. Coercion accelerates de-risking: partners diversify suppliers, financing and tech stacks to escape your grip, and the hub’s edge dulls as others route around it. Empirical and model-based work in 2025 points to trade contraction, welfare losses (notably for the U.S. itself), and supply-chain fragmentation even when headline rates later step down or carve-outs appear.[^6][^8][^9]

Less visible costs accumulate inside institutions. When pressure becomes reflex, people tell leaders what keeps them safe rather than what is true. Innovation slumps as teams optimize for compliance, not creativity. Systems turn brittle; retaliation hardens into habit. Short-term wins are easy to count; long-term losses arrive quietly and everywhere.

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When Pressure Is Justified

There are moments—human-rights abuses, security risks, market manipulation—when pressure is warranted. But “it works” is not enough. A defensible policy must satisfy three tests at once:

Outcomes must meaningfully outweigh costs; Duties & rights (law, proportionality, due process) must be respected; and Character must be shaped, not corroded, by the habits power creates. Pass one test and you may win the moment. Pass all three and you preserve the capacity to govern tomorrow.

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A Responsible Playbook

Name the aim. State the non-negotiable public good at stake and why lighter tools won’t suffice.
Escalate last. Start with transparency, rulemaking and open standards; climb the ladder only as needed.
Keep it narrow—and reversible. Scope tightly; time-box; publish relief criteria and a credible appeal path.
Publish who pays. Make visible the costs for consumers, workers and allies—and how you will cushion them.
Use allies to make law, not whim. Coordination converts pressure into persuasion.
Sunset and audit. Build in expiry and independent evaluation against a real counterfactual.

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A Quick 2×2

High leverage × High legitimacy → Use sparingly; explain publicly.
High leverage × Low legitimacy → Redesign or back off: quick wins, long isolation.
Low leverage × High legitimacy → Build coalitions and capacity until it scales.
Low leverage × Low legitimacy → Don’t do it.

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What Matters Most

In a world organized by networks, leverage can move markets. Only legitimacy keeps them stitched together. The leaders who last will treat coercion like a scalpel, not a hammer—and be able to point, on the record, to the guardrails they honored on the way to results.

Leverage wins the moment. Legitimacy wins the decade.

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Sources

[^1]: Associated Press — “Trump places 25% tariff on imported autos” (Mar 26, 2025). https://apnews.com/article/e53823ef7bbb7b3c46d11eca90aaa638
[^2]: Reuters — “U.S. confirms EU autos & auto parts 15% tariffs began Aug 1” (Sep 24, 2025). https://www.reuters.com/sustainability/society-equity/us-confirms-eu-autos-auto-parts-15-tariffs-started-aug-1-2025-09-24/
[^3]: Forbes — “Trump Imposes 30% Tariffs On EU And Mexico” (Jul 12, 2025). https://www.forbes.com/sites/alisondurkee/2025/07/12/trump-imposes-30-tariffs-on-eu-and-mexico/
[^4]: European Parliament — “US tariffs: economic, financial and monetary repercussions” (Briefing, Apr 2, 2025). https://www.europarl.europa.eu/RegData/etudes/IDAN/2025/764382/ECTI_IDA%282025%29764382_EN.pdf
[^5]: Farrell, H. & Newman, A. — “Weaponized Interdependence”, International Security 44(1):42–79 (2019). https://direct.mit.edu/isec/article/44/1/42/12237/Weaponized-Interdependence-How-Global-Economic
[^6]: CEPR VoxEU — “Roaring tariffs: The global impact of the 2025 US trade war” (2025). https://cepr.org/voxeu/columns/roaring-tariffs-global-impact-2025-us-trade-war
[^7]: KPMG TaxNewsFlash — “White House announces 25% tariffs on automobile imports” (Mar 27, 2025). https://kpmg.com/us/en/taxnewsflash/news/2025/03/white-house-announces-25-percent-tariffs-automobile-imports.html
[^8]: NBER Working Paper — “The 2025 Trade War: Dynamic Impacts Across U.S. States and the Global Economy” (2025). https://www.nber.org/papers/w33792
[^9]: Federal Reserve Bank of San Francisco WP — “Dynamic Effects of the 2025 U.S. Tariff Increases” (2025). https://www.frbsf.org/wp-content/uploads/wp2025-09.pdf

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TL;DR

• 2025 normalized a pressure-first, terms-later playbook in policy and business.
• It works—until partners reroute supply, finance and technology around your chokepoints.
• Durable power needs outcomes and fair process; otherwise trust and capacity erode.
• Use leverage narrowly, temporarily and with a path to “yes,” plus burden-sharing, sunsets and audits.
• Legitimacy compounds; leverage decays.