Xavier Vives warns of rising protectionism and urges EU reforms, AI adoption

Xavier Vives participates today in the 23rd Family Business Forum to discuss the new international context under a second Trump presidency, the rise of China and Europe’s role, and the reforms Europe still needs to undertake.

He described a shift toward protectionism, intensified by Trump’s return but rooted in longer trends: decades of globalization, rapid technological change and the integration of China into world trade. These economic shifts, combined with social factors, have helped fuel the rise of far‑right movements. In that environment, security and strategic autonomy have moved to the center of political debate.

On Europe’s position, Vives said the bloc is a confederation of often conflicting interests. It lacks an independent defence capacity and remains dependent on the United States, as illustrated by the response to the war in Ukraine. That dependence weakens Europe’s leverage in negotiating trade deals and other strategic issues.

Vives argued that Europe still has much to do on defence, on completing the single market—which he said is far less integrated than commonly assumed—and on prioritising economic prosperity rather than trying to regulate every aspect of activity. He also sees an opportunity to promote the euro as an international currency, but warned this would require a large market for safe European assets that does not yet exist.

For microeconomies such as Andorra, Vives said defence is not a viable option; instead the country should seek to be part of the European framework under the best possible terms. Economically, he recommended focusing on more innovative and technological sectors and upgrading tourism toward higher‑quality models. Regarding any agreement with Europe, he described it as delicate but felt Andorra “hardly can turn its back on Europe.” The outcome, he said, will depend on the details: which directives are applied, under what conditions and with what adaptations to preserve national interests.

On specific sectors, Vives singled out the digital economy as an obvious bet, especially remote activities that can attract high‑value professionals to locate in the country. He stressed that artificial intelligence must be adopted: countries or firms that do not embrace AI risk falling behind. Overall he expressed cautious optimism that AI can raise productivity and create jobs, while noting the main challenges are training and organisational change within firms—processes that take time.

He acknowledged the possibility of a bubble in technology valuations and warned that a correction could have wide effects given the scale of investment and the importance of tech to US economic dynamism. Whether the world is headed for recession, he said, is unclear: there are forces pushing both ways and outcomes will depend heavily on economic policies adopted.

Vives concluded by voicing concern about rising protectionism and geopolitical tensions, particularly those related to Ukraine and China, which increase global uncertainty. “The world is today more uncertain and more fragmented than ever, and that is worrying,” he said.