Marketplace - U.S.-EU relationship status: It's complicated

Episode Date: January 19, 2026

President Trump has announced new tariffs on European Union countries, aimed at forcing a deal for the U.S. to acquire Greenland. But the EU could respond relatively quickly, with sanctions of their own. In this episode, the EU’s “bazooka” option. Plus: Trump’s recent housing proposals won’t fix the fundemental issue driving housing affordability, technology has changed how parents dole out kids’ allowance, and we explain the history of economic jargon.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.

On the program today, a look at the job market, how kids are getting allowances these days, and the latest on our relationship status with the EU. From American public media, this is Marketplace. From Oregon Public Broadcasting in Portland, I'm Rima Grace in for Kai Ristall. It is Monday, January 19th, Martin Luther King Jr. holiday. Good to have you with us. As part of his push to buy Greenland, President Trump is promising, new tariffs. In a post on Truth Social this weekend, the president said that starting February 1st, the U.S. will impose new 10% tariffs on Denmark, which Greenland is a part of, along with

seven other European countries that have opposed a U.S. takeover of the territory. He said that tariff will go up to 25% on June 1st and will stay in place until the U.S. has reached a deal to buy Greenland. Marketplace's Stephanie Hughes looks at what this could mean for the relationship with one of our biggest trading partners. The U.S. and the EU are the world's two largest economies, and for decades we've traded pretty well together. There have been little trade disputes, like siblings fighting in the backseat of a car. Emily Blanchard studies international economic policy at Dartmouth.

She says, like siblings, we trade just about everything. Fun stuff like French wine and Kentucky bourbon, but more so big heavy stuff, industrial machinery, airplane parts, cars, services like banking. Even after the Trump administration imposed widespread tariffs last year, it reached a preliminary trade deal with the EU. So we've been in a sort of cool detente since summer. But now, with these new threatened tariffs over Greenland, Blanchard says that trade truce is almost certainly on pause, if not out the window. And Europe could retaliate. So you may have heard the term of bazooka.

Uri Mantine is an analyst with the European Policy Center in Brussels. The trade bazooka is more formally known as Europe's anti-coergean instrument. Maitian describes it as a regulation that says if another country is putting some kind of financial pressure on the EU to force a policy change, the EU, which is not known for being quick, can quickly hit back, unleashing tariffs against certain goods or even restricting certain companies from operating in Europe. And that can be U.S. tech companies like meta, like Google, that provides services. My teen says before that can happen, the regulation requires that the EU try to negotiate with the U.S. Andy says European leaders don't really want to restrict trade. These are too big and highly trading partners.

So it would have nefarious effects, I think, for both sides. In other words, it would be bad for everyone if we stopped using each other's stuff. Even if the U.S. and the EU work past this, Carlton College Economics Professor Ethan Strube says this has profoundly hurt our relationship. I think that the U.S.'s credibility on trade with Europe is pretty shot. If it's not shot with European leaders, it is certainly shot with the European public. Strube says for trade to work, people need predictability, a clear set of rules that everyone follows. And when rules or deals get ignored, it's a lot harder to play nicely or even at all.

I'm Stephanie Hughes for Marketplace. U.S. markets were closed today for the holiday, so we'll do a spin around the world with a look at global equities. We'll have the details when we do the number. The World Economic Forum kicked off today in Davos, Switzerland. President Trump is scheduled to speak there on Wednesday. And reports say he's expected to announce a plan that would let Americans tap their 401Ks for home down payment without a penalty. A lot of economists are skeptical that this would actually make housing more affordable, just like they've been with some of the president's other recent ideas. So Marketplace's Samantha Fields asks, what would bring down the cost of housing? Trump has proposed several ideas in the last few months, 50-year mortgages, a ban on institutional investors buying single-family homes, and now letting people take money out of their 401ks to buy a house.

It makes a lot of sense that all these proposals are just coming out right now because we are in the midst of a housing affordability crisis. Chris Salviotti, chief economist at Apartment List, says housing has been an issue for a long time, but it's gotten increasingly unattainable for many people in the last five years. Now more than probably at any time in recent memory, housing affordability is kind of a top of mind issue. But he says some of the proposals the president has thrown out so far could actually exacerbate the problem by giving people more purchasing power. And that would, if anything, potentially even drive prices up further by bringing more demand into the market. And there's already more demand for housing than supply. Jenny Schutz at Arnold Ventures says that's why it's gotten so expensive to buy. There aren't enough homes to go around.

The problem that the federal government has, both the administration and Congress, is that they don't have a lot of levers over supply. Local governments and cities and towns are the ones with the most control over how much housing gets built. And Vanessa Perry at the George Washington University School of Business says local officials could help improve housing affordability by making it easier to build more homes more quickly. Anything that could be done to remove some of the zoning restrictions that exist and many markets across the United States, that would have a major impact. It would allow developers to come in and be able to increase the density, use land more efficiently. But Lisa Sturtevant, Chief Economist at Bright MLS, says getting people to support those kinds of changes is often a hard sell.

We did a survey recently that showed that the vast majority of people agree that housing affordability is a big issue. But when you ask them, is a good solution to allow your local community to build more housing in your community? A lot of people say no. I'm Samantha Fields for Marketplace. You could say that the economy has its own kind of language. There are the usual words you hear a lot on this show, like inflation, of course, growth, wages. But then there are phrases like soft landing or labor market churn, terms that are maybe a little metaphorical. So today we wanted to take a step back for a retrospective on the history of econ language.

Marketplace's Sean McHenry has that one. For this story, I went straight to the source, sort of. I don't know if you can see the yellow sort of, let me tilt it a little bit. The yellow thing. I'm the editor of this encyclopedia. It's really an encyclopedia, but it's kind of. Economists are not good, good language, and we call it a dictionary. That's Patias Fernengo. He teaches at Bucknell University, and he was holding up a book first published in 1894 called the Paul Grave Dictionary of Political Economy.

Paul Grave was the editor of the economist at some point, and he edited this, and it has published like 39 Nobel Prizes and whatnot. That dictionary kept getting republished. The latest edition came out in 2018, and it now contains approximately 3,000 articles written by economists representing several hundred years of thinking and, consequently, how we talk about the economy. And that dictionary includes the person who is the first stop on this vocab journey, Adam Smith, often known as the father of capitalism, who is writing in the middle of the 1700s. His ideas were heavily influenced by Newton. One of his first papers was on astronomy, and he was thinking of, he uses the term gravitation. Isaac Newton's ideas were trendy at the time, and that's reflected in Smith's writing, like in this signature idea.

Market prices gravitate around natural prices. So whenever you hear economists on the show refer to natural prices, you can thank Adam Smith. Okay, stop number two on this vocab journey. Fast forward 100 years to the rise of a movement called neoclassical economics. Here's Emma Cass at Bennington College. Neoclassical economics actually begins with a group of thinkers most people have probably never heard of. And she was right. She listed some names I had not, in fact, heard of, and I cover economics for a living. These figures were really trying to make economics into something objective and scientific.

They really start to use words like scarcity and utility, words that sound a bit more clinical. Gonzalo Fonseca at the Institute for New Economic Thinking brings us to stop number three in the 1900s. In the 20s, 30s and 40s, you start getting sort of the big categories, the GDPs, the consumptions, the investment spending and all that. A lot of these come from the Great Depression, which was a huge turning point for the economics profession, both in terms of what economists measure and how they talk about the economy.

There's this one guy who I love, is a guy called Ragnar Frisch, He's a Norwegian guy who was ahead of the econometric society in the 40s. And he just loves making up new words macroeconomics, microeconomics, econometrics. This is all his inventions. And that inventing isn't done. Here's Matthias Fernengo at Bucknell again. What is to be an economist? It's to be part of a professional group of people that define this that we do is economics.

We create vocabulary. For example, think about labor market vocab. We use the word churn to describe the rate at which people are a place in an industry. Now, if you think that feels too detached from the actual human experience of, say, losing a job, you're not alone. Vernango agrees. One of the things we're trying to do because there is a push in the profession is what we call decolonize the dictionary. Bring perspectives from other parts of the world. That's why he and his co-editors on the new Hellgrave Dictionary of Economics are coming out with a new edition next year. In Los Angeles,

I'm Sean McHenry for Market. coming up. I was so happy to get 50 people because I felt that I was screaming into the dark. Always good to have company. But first, let's do the numbers. U.S. markets were closed for the Martin Luther King Jr. holiday today. Over in Asia, Japan's Niki fell two-thirds of one percent. The Shanghai composite gained three-tenths percent. The Heng Singh lost one-and-one-tenth percent. In Europe, Britain's footsie dipped four-th-th percent. In Europe, Britain's footseat dipped four. 10th percent. Francis Kack 40 dropped one in eight tenths percent. Germany's Dax gave back one in a third

percent. When U.S. markets return tomorrow, they'll be looking ahead to some more belated releases from the Bureau of Economic Analysis. We'll get an updated estimate for the third quarter GDP on Thursday. Also, we'll get PCE data from November, which can give us a sense of inflation across a wide range of personal consumption items. The last available number was from September, which showed an inflation rate of 2.8 You're listening to Marketplace. Ever wish you could sit in on a private conversation between the world's top CEOs? The podcast Long Strange Trip, CEO to CEO, opens the door to the kind of candid behind-closed doors discussions you won't hear anywhere else. Real decisions, real pressure, and real leadership.

In each episode, Brian Halligan, co-founder of HubSpot, speaks with leaders to unpack the real stories behind scaling their companies. Expect candid conversations about hiring, culture, communication, strategy, and staying resilient when the pressure hits. Learn from leaders like Vlad Tenev of Robin Hood and Parker Conrad of Rippling. Whether you're an aspiring founder, a seasoned CEO, or simply curious about the stories behind CEOs on the long, strange trip of building enduring legendary companies, this is a show you can't miss. Tune in to Sequoia's new show, Long Strange Trip, to hear from some of the top CEOs who are defining the news. CEO rulebook. Long Strange Trip is available everywhere you get your podcasts. Listen to Long Strange Trip today. This is Marketplace. I'm Rima Grace. For a lot of families, giving kids an allowance, it's kind of a milestone, first attempt at teaching them how money works. A Wells Fargo survey from last year found that

more than 70% of respondents gave their kids some type of allowance. Though as times change, so to do the forms of payment. Michael Waters is an author and journalist who had a story in the Atlantic titled The New Allowance. Michael, thanks for joining us. Thank you for having me. Okay, so I don't know about you, but my memory of an allowance was my parents handing me, you know, $5, $10 every few weeks. It sounds like these days some families are using apps that are making allowances a lot more financially involved. What sorts of things are we seeing? What we've seen in recent years is this pretty significant and kind of under-noticed shift to more technology-based allowance payments. So, like, different kinds of peer-to-peer payments like Venmo.

Parents are giving kids allowances via checking accounts, and even in some cases, pre-paid debit cards. And there's also this segment of apps, like Greenlight, which parents can put their kids' allowance into and then sort of encourage their kids to do much more with these. allowances than, you know, we would have seen in recent history otherwise. Like what sorts of things? Many of these apps will encourage kids to perhaps in some cases like put money in investment funds.

There are also some apps, like an ETF, exactly. There are some apps that allow parents to give their kids almost like mock loans to sort of like approximate the experience of like giving and receiving credit. A lot of them also have different. Yeah, exactly. And a lot of them have like many games that would explain the difference between, you know, a credit and a debit card, even teach kids about what a credit score is, right? So they're kind of supercharged to explain and almost like give these kids like experiences of this very modern economy kind of through the like lens of allowance. So even though allowances can look a lot different with these apps and these tools, you wrote that the idea of an allowance has always shifted with the political economy of the time. How so exactly?

Yeah, so we see allowances first really come into vogue in the 1910s and 1920s. Kids, like for the first time, are being courted as customers by advertisers in the 1910s and 1920s. And because of child labor laws, like kids would have just fewer income streams than before. And so there was all this anxiety about like among parents about, oh, our kids want to spend money but don't actually know the meaning of money. Right. So what can we do about it? And so allowance as this sort of like weekly structured payment was born as a way to teach kids how to spend in kind of a more thoughtful and prudent way towards the middle of the 20th century when we see the beginnings of a like stronger credit-based economy. A lot of parents started using allowances as a way to teach kids about credit.

Like that became part of the lessons. Well, talk about how class plays into this because I imagine we're talking about one. group of families who tend to use these apps and these tools. What differences did you capture across families? I think allowance, maybe I should also just say as like a high level, not every child gets an allowance. And of those who get allowances, for families with some amount of money, like middle class, upper middle class families, there's an element of an allowance as a simulation of limit, right? So a parent is not necessarily giving their kids just the maximum amount of money that they can afford to spend on the kid that week or that month. It's more about

I'm giving you this arbitrarily limited amount as a way to teach you what it means to run up. Right, exactly. But then there's also for especially poor working class families. And a lot of cases allowances do seem to function. You know, it's absolutely wrapped up in lessons too, but is just also more practical of like this is the money that we can afford to spend this week. It's actually kind of more budgetary for the family rather than just kind of a simulated lesson for kids. Okay. So in the end, do you find that kids who get allowances actually grow up to be more financially literate since that's the idea, right? Is there an actual connection there? Yeah. So this is actually really kind of hotly contested in the literature. And I would say

that it kind of adds up to this pretty inconclusive picture about whether allowances work, which I think is fascinating because this is something that we've done. and parents have done, you know, for over a century. You know, there is research that shows that kids who receive allowance payments early in life don't actually, it doesn't really have a significant impact on their likelihood of carrying a credit card balance later or opening a bank account. That's surprising. Yeah, it doesn't necessarily have a market difference. This is quite a difficult thing to research because allowance is a really broad catch-all category. and you don't actually know exactly what each parent is doing and how devoted they are to it.

So it's harder to measure the outcomes that way. Okay, last question. After all this reporting, what is your personal take on allowances? Oh, that's a good question. I think my totally subjective read on allowances is that they are really a way for parents to work through some of their own, I think really right, and logical kind of anxieties about their kids and their kids' future, right? I guess I think of it a little bit more for the parents than for the kids because, you know, what do you even tell your kids to do, right? Like in this current moment and like what to study, how to succeed, I think the picture

feels really blurry right now. And it makes sense as like a way for parents almost to allay their own really rightful anxieties about this current economic moment. Makes sense to me. Michael Waters is a journalist and author writing about allowance for the Atlantic. Michael, thanks so much for joining us. Yeah, thank you for having me. That last point that Michael was making about how families are trying to navigate this current moment

and all the anxiety that comes with it, it really gets at the heart of the Marketplace Show that I host called This Is Uncomfortable. It's a weekly podcast where I talk with people about their money and how they're making sense of this economy. In one of our latest episodes, we hear from people who describe just how difficult it feels to find a job right now. I have been quite frustrated for almost six months now that I have been actively looking and haven't had any luck.

Overall, I think I applied to 350 to 400 jobs in the past month and have received nothing. My student loan grace period is going to end in about six months. Most of the job posting seem to be fake. I also have been very frustrated by how long it takes people to get back to you if they get back to you at all. January 3rd was when I got to let go. 2025 and financially

it's been ridiculous. After getting evicted, I stay in the hotel for two weeks. Emotionally, it feels like at the end. I've reached my limit. I've been ghosted between rounds of interviews and finding that even multiple personal referrals aren't issuing like they used to be.

That was Aitza, Caleb, Darcy, Adriol, and Amy who called in to share their stories. You can listen to This is on uncomfortable wherever you get your podcast. We've got a new episode out every Thursday. Among the voices you just heard of people looking for work, one of them mentioned being ghosted. You know, usually you hear that word in the context of dating when someone just disappears, stops replying altogether. But it's happening more and more in the job market. Sometimes employers

never get back to you. And other times, they're posting jobs that don't actually seem to exist. BBC's Megan Lawton has that story. When Eric Thompson was made redundant from his tech job in Washington, D.C., he expected the hunt for a new role to be tough, but he didn't anticipate being ghosted. Through November and December, I did the job hunting, looking for everything under the sun, applying for us many positions. I kept finding more and more jobs that just weren't responsive. The experience prompted Eric to create a support group, who are now calling for new U.S. laws to stop ghost jobs. Essentially, job postings that are misleading were never intended to be filled. In our bill, we have this information that is required to be part of every job posting.

And everybody who posts the job has to validate that information. His proposed Truth in Job Advertising Act would require expiration dates, proof a role is legitimate, and penalties for employers who aren't transparent. He's also launched a petition, which now has more than 50,000. signatures. It took my breath away and was a little overwhelming to know that I wasn't alone in the dark. I was so happy to get 50 people because I felt that I was screaming into the dark at one point. In the UK, Eilish, who works in marketing and was made redundant last year, says she's faced similar issues. I've been ghosted by small businesses and I've also been ghosted by big corporations.

Hiring platform greenhouse estimates a third of postings in the UK show signs of being in ghost jobs. Ilish explains she was once offered an interview but didn't ever hear back from the hiring manager. It does just knock you down when you've built your confidence back up with the potential of an interview to then be completely left in the dark. Career coach and recruitment experts Dr Jasmine Escalera, who is based in Miami, has surveyed hiring managers on why they offer ghost roles. They might be posting these positions to actually create a talent pool. It isn't that they don't want to hire, but they may not be hiring immediately. But they also could potentially be inflating numbers. So trying to show that the company organization is growing

when they're actually not. She's concerned ghost jobs may be misleading the data that governments rely on. We use this data to develop policy. And so if that data is somehow skewed, then we're not really able to create the policies or the support that job seekers and employees need right now. In Canada, some politicians are taking action. From January, employers in Ontario with at least 25 staff must update candidates within 45 days of an interview and state whether a job is genuinely being filled. Hopefully most employers will comply. Here's Toronto-based employment lawyer Deborah Hudson. My cynical side, just because I've been doing this for almost 20 years, says like, how are they actually going to monitor and regulate this? I don't think that the government

has resources to be having investigations on what's happening or not. However, if people see an issue, they can make a complaint and it will be looked into. Until measures come into place, career experts suggest job seekers should watch for red flags, roles reposted again and again, or listings left open for months. In Toronto, I'm the BBC's Megan Lawton for Marketplace. This final note on the way out can file it under, yeah, that's what we've been saying. Start off the show talking about President Trump's new tariff proposals. Well, a new study found that Americans are, in fact, bearing nearly all the cost of Trump's tariffs. The research comes from the Kiel Institute for the World Economy,

and it shows that foreign companies are covering just about 4% of the tariff bill. The rest shows up here on American importers for domestic customers, and of course on U.S. consumers. Amir Rabawi, Caitlin Esh, John Gordon, Noia Carr, and Stephanie Seek are the Marketplace editing staff. Kelly Silvera is the news director, and I'm Rima Jerez. We'll be back tomorrow. This is APM.

Hey, everybody, it's Kyle Risdahl, the host of Marketplace. It has been a year since the fires here in Los Angeles, and businesses that burned are still struggling. You know, I won't lie. I've looked. I've looked at, you know, hey, maybe maybe we move the storm. it wouldn't be the same hardware store. On the ground reporting and what the year ahead has in store for business owners still recovering,

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