Elba Astorga, The Conversation

The Fundéu (Urgent Spanish Foundation) has just chosen the word of the year in Spanish: “aranceles” (tariffs). Which, coincidentally, is also the favorite word of US President Donald Trump. And how! In fact, it was he who brought it into the debate after decades of free trade.

For our annual summary of global economic content, we might prefer to start with a name rather than a word: that of the aforementioned Trump, the 47th president of the United States, who, during the first year of his second term, has altered the world economic order by imposing universal tariffs.

When Trump was re-elected president in November 2024, the issue of tariffs was already looming. It was known that he would use them to attack China, and Mexico, his southern neighbor and trading partner, along with Canada in the United States-Mexico-Canada Agreement (USMCA), expected more tariffs, controls, and interventionism.

On April 2 , the “Liberation Day” was celebrated in the White House gardens: Trump presented the tariffs to be applied to “all unfair partners” who, in his words, for decades caused the gigantic US trade deficit and “stole countless American jobs ”.

With this measure, the US president put an end to the free trade policy that had been the hallmark of US leadership since the end of World War II.

A historical review of the effects of protectionism and the imposition of tariffs shows that their application leads to an increase in prices for consumers, the destruction of jobs, and a reduction in global economic growth due to the decline in international trade.

Iberian blackout: the economic event of the year in Spain

On Monday, April 28, at approximately 12:30 p.m., a widespread power outage occurred across Spain. This energy failure kept citizens and institutions on edge and prompted us to take a closer look at the design of the country’s electrical system.

The chain begins with the energy-generating companies, from there it passes to the transporters, who carry it through high-voltage networks to the distributors, who transmit it from the electrical substations to the point of consumption, and, finally, the marketing companies participate, who sell and invoice the final consumer for the electricity purchased in the wholesale market.

This market brings together electricity generated from different energy sources and with different technologies and production costs: nuclear, renewables, and fossil fuels.

This event taught us the lesson that maintaining balance in all phases of the electrical system is a complex and delicate matter, and that the digitalization and technological advancement of society continue to generate greater energy demand and require guaranteeing the security of the electricity supply.

This need may bring the use of nuclear energy back into the spotlight, as it is stable and continuous. However, let’s not forget that it also carries risks of long-term pollution.

Technological society: AI, chips, and bubbles

In early 2025, China won a major battle against the US in their particular technological war: without access to Nvidia chips, the Chinese company DeepSeek was able to develop a fast and powerful AI with fewer resources than its competitors.

Beyond the technological euphoria, it’s worth remembering that major disruptions have two main phases: installation and deployment. The first, rapid and frenetic, usually generates a bubble (like the dot-com bubble of the early 2000s) that eventually bursts. At the beginning of this year, analysts were already wondering if the microchip bubble would be a potential new technological bubble.

The truth is that the market has maintained its unstoppable trajectory throughout 2025: Nvidia’s shares have increased in value 13-fold since the beginning of 2023 (and Wall Street analysts believe they can still rise). This growth has been driven by factors such as the rapid development of new technologies and low interest rates, which lead investors to seek more profitable options than the markets.

The point is that, after excessive market growth, there is usually a price correction (which can be smooth or violent) when a sufficient number of investors realize that many assets are overvalued.

Fashion, labubus and luxury

A similar process to that of microchips has occurred in the fashion, luxury, and trends sector with Labubus dolls, which have gone from being products for geeks to objects of desire for fashionistas. Born as a novelty in 2015, they exploded into a fashion trend in 2025. The big winner in this saga is Wang Ning, owner of PopMart, the company that created these sharp-toothed dolls, who has seen his net worth grow by $20 billion.

In the luxury sector, the year began with some concern: a certain slowdown was observed after the meteoric rises of recent years. On the one hand, there was talk of the weakening of Asian economies, major drivers of the sector. But also of the TikTok effect, given the proliferation of videos that questioned the relationship between quality and price in the luxury sector.

This is where the importance of intangible value comes into play, whether we’re talking about luxury or eccentric dolls. It’s something unseen but deeply felt, encompassing aspects like the brand, its history, its origins, its values, and its aesthetics. This value can make a product desirable even if its tangible attributes (such as aesthetics or quality) aren’t extraordinary.

Nobel Prize 2025: Economic Development and Creativity

On October 13, the Bank of Sweden announced the awarding of the Nobel Prize in Economics to Joel Mokyr, Philippe Aghion, and Peter Howitt for explaining innovation-driven economic growth.

On the one hand, Mokyr is a professor of economic history who has spent years studying the circumstances that made the Industrial Revolution possible: what happened, why in England, and why at that time. He argues that the true driving force behind development was not machines, but curiosity, ideas, and a belief in progress.

On the other hand, Aghion and Howitt have described in their work how innovation paves the way for progress. Both are disciples of J.A. Schumpeter (promoter of the idea of ​creative destruction, which is not about destroying but about letting what is no longer useful die so that something new and better can emerge). Aghion argues that economies that reward innovation and its associated risks are the most dynamic, while Howitt has shown how this support for innovation translates into long-term prosperity.

This Nobel Prize reinforces the idea that entrepreneurship should be supported and promoted.

To start a business, you need creativity, experience, and risk.

Entrepreneurship requires an optimal balance (sometimes determined by age) between creativity (to generate innovative ideas), considerable experience (to make well-founded decisions), and risk tolerance (to take on the challenges of entrepreneurship).

Social stereotypes and gender also play a role: in most societies, entrepreneurship is associated with the expression of characteristics typically considered masculine (competitiveness, aggressiveness, risk-taking). This influences the initial predisposition to start a business, but then, beyond the initial interest, men are significantly more likely than women to take action to create the company.

Entrepreneurs’ business ideas often require external funding. A key factor in securing this funding is knowing how to sell their ideas to potential investors. The emotions entrepreneurs display when communicating their projects influence investors’ decisions.

When it comes to crowdfunding, two factors come into play: in addition to what the entrepreneur says about their project (and how they say it), micro-investors are attentive to the signals of more experienced investors and copy their investment behavior.

Let’s hope that in the new year, the news surrounding tariffs and trade wars is more reassuring than it was in 2025. And that creativity and innovation prevail as driving forces behind the economic development of countries.

Elba Astorga, Editora de Economía, The Conversation

This article is republished from The Conversation under a Creative Commons license. Read the original article.