Ng Han Guan/AP

A woman passes by a ZTE building in Beijing, China on May 8, 2018. President Trump's weekend social media musings about China injected new uncertainty into Washington’s sanctions against Chinese tech giant ZTE and planned trade talks between the two countries.

After President Trump reimposed sanctions on Iran – potentially restricting sales of its 4 percent of the world oil production – oil markets surged. But gas prices in Waltham, Mass., did exactly nothing.

Hours ticked by. A day. The filling station signs dotting the Boston suburb’s main drag remained unmoved. After a week, prices had pushed upward a few pennies per gallon – noticeable, but hardly dramatic.

Last month, US soybeans initially lost nearly 5 percent of their value after China threatened new tariffs on US goods if the White House carried out its broadside on Chinese imports. Then prices quickly stabilized.

And on Monday, share prices of US tech companies initially hit hard by a US ban on doing business with China’s ZTE phone manufacturer continued their recovery after Mr. Trump’s surprise tweet that he wanted to keep ZTE from closing down.

It is now a hallmark of US foreign policy that this president stakes out aggressive positions but follows up with less-sweeping actions or policy proposals stated so vaguely that they may or may not be game-changers. It’s a high-risk, high-reward vision for bargaining, which could lead to breakthroughs that boost US jobs and businesses and lessen geopolitical tensions. Or ignite a trade war.

“There’s a lot of uncertainty until we know what he means,” says Stephan Haggard, a trade expert at the University of California at San Diego. He is speaking of Trump’s proposed sanctions against Iran, but he could just as easily be talking about his trade negotiations with Canada and Mexico over NAFTA, the tense trade standoff with China, or nuclear talks with North Korea.

The challenge is that this uncertainty comes at a cost. The cloudier the future looks, the more companies pull back or delay new investments until the outlook is clearer.

“Even if the United States avoids a full-blown trade war, the country is already incurring economic damage by raising uncertainty about future economic policy and eroding its authority in international policy making,” writes Matthew Slaughter, dean of the Tuck School of Business at Dartmouth College, in Foreign Affairs.

There’s little question that uncertainty has risen. According to the US Policy Uncertainty Index, created by economists at Northwestern, Stanford, and the University of Chicago, jitters have increased 37 percent since Trump’s election, Mr. Slaughter points out.

How big a drag it represents is difficult to measure, especially at a time when US capital investment is rising, as the Trump tax cuts kick in atop an already healthy economy. Kiplinger last month forecast that core business fixed investment would rise 7 percent this year, after last year’s solid 5.3 percent increase, as long as trade tensions with China abate.

That optimism seems to be the prevailing view in the stock market, which has recovered about a third of its losses since January, when concerns about a trade war with China began to weigh on investors.

Clearly, some initial fears have proved overblown. China’s threat to impose a 25 percent tariff on US soybeans, for example, is not as dire for American farmers as it sounds because US competitors (Brazil and a drought-ravaged Argentina) can’t replace US exports. If they supply China, then US soybeans will flow to the European and other markets that Brazil and Argentina abandon.

Where the threat matters is upstream from the farmers, says Alex Breitinger, a commodity broker with Paragon Investments in Silver Lake, Kan. He has clients who are looking at buying soybean export facilities but have been stymied by the uncertainty over trade. Should they invest in facilities geared toward sending raw soybeans to China or those that cater to Europe, which prefers processed soybean meal? “They suddenly are faced with very drastic changes here,” says Mr. Breitinger.

Even if these issues are eventually resolved, there’s a drag on the economy from deals averted or postponed. Sometimes governments may impose delays because of the trade tensions. On May 17, for example, China’s antitrust officials approved the sale of part of Toshiba to investors led by US-based Bain Capital. That was eight months after the troubled Japanese conglomerate concluded the deal. And it was widely viewed as a signal of China’s willingness to ease trade tensions, coming just days after Trump’s own concessionary move – the controversial surprise tweet saying he would work with China to help ZTE, the Chinese company the US was effectively putting out of business because of its prohibited sales to Iran and North Korea.

If and when Trump does bring this period of uncertainty to an end – either with breakthrough deals or increased trade sanctions or some combination of the two – he will continue to face trade challenges as new industrial winners and losers emerge. Already, his tariffs on steel and aluminum are raising voices of alarm within his own party as the sanctions begin to bite.

“While I agree that we must punish China for its abuses, I also believe that tariffs can create overwhelming damage to Americans and must be used cautiously,” Rep. Kevin Brady (R) of Texas, chairman of the powerful House Ways and Means Committee, wrote in an op-ed last month. “Like taxes, they curtail economic growth, discourage new investment, delay new hiring and put American workers at a huge disadvantage to foreign competitors.”

Small businesses – from boat manufacturers to auto-part makers – are also complaining loudly.

“I am a business owner, a proud Republican, and a voter who supports President Donald Trump’s campaign to level US trade imbalances. I am also angry, frustrated and a little scared, because the unintended consequences of the president's $50 billion tariffs on China would cripple my business in Auburn Hills and strip my 50 employees of their good-paying jobs,” Mary Buchzeiger, CEO of a Detroit-area component manufacturer for the auto industry, wrote in an op-ed this week.

Some of the biggest impacts of trade sanctions, however, would fall on big multinational corporations whose supply chains depend on operations in nations around the world. For example: 16 US companies, including high-tech stars such as Apple, Intel, Microsoft, and Qualcomm, made a combined $105 billion from China alone last year, nearly a quarter of their entire sales, according to a new analysis by investment bank Jefferies.

Tariffs or other protectionist measures could prompt them to adjust their supply chains, presumably to more expensive locations, which will prove another drag on the economy.

“Trump's moves are affecting large companies in cross-cutting ways,” Ted Moran, a nonresident senior fellow with the Peterson Institute for International Economics, a Washington think tank, writes in an email. “The tax cut has given them more cash. But … multinational corporations have designated supply chains across borders, and they cannot shift production from one country to another very rapidly. Adverse measures – or the threat of protectionism – slows down their networks. Political successes ... will not make up for this uncertainty.”

Murat Alptekin chases after his son at a community playground. Hair still damp from a recent swim lesson, 2-year-old Isa climbs up the nearest set of steps and races to the tallest slide, Mr. Alptekin right behind him. The pair stop by every few days to use the swings and spend time outside. 

It’s clear father and son share a strong bond – one that Alptekin attributes to being able to take time off work the first few weeks after Isa was born. It was, Alptekin recalls, a “pretty hectic” time, with its mountains of diapers and sleepless nights. But he’s grateful, because he was able to be there for his son’s first, most important moments – without worrying about the bills.

And thanks to California’s progressive paid family leave program, he can do it all again when his second child is born in July. Without paid family leave, he says, “I’d have to take leave without pay, [and] that’s not an option now.”

Currently, California is one of four US states that provide paid family leave. But the idea is gaining ground – and men are taking advantage. Part of it is cultural, as gender norms shift and more men take a larger role in raising their children. There’s also a growing sense that the United States, and its female workforce, is being left behind. The nation is the only country in the 35-member Organization for Economic Co-operation and Development (OECD) without a national paid maternity leave policy, as more evidence emerges about the advantages to families when such programs are in place.

“Contrasting the US case with the OECD finds that it’s really the lack of access to family-friendly policies ... that’s holding women back [in the US labor market],” says Aparna Mathur, an economist with American Enterprise Institute. Paid family leave, she says, “tells you it’s OK to take that time off and come back – I think [that] is critical today in a generation where people are, in most cases, both parents working and there are lots and lots of responsibilities at home and at work.”

The drive has mostly taken place at the state level. In the past three years, New York, Washington State, and Washington, D.C., have passed paid family leave legislation, and more than 20 are considering legislation, including Colorado and Massachusetts. Those that already have programs in place are looking to take them further. New York, which implemented a paid family leave program in January, plans to extend the maximum time off from eight weeks in 2018 to 12 in 2021. California, which implemented paid family leave in 2004, recently expanded the benefits of the program, eliminating a seven-day waiting period before pay begins and increasing the wage replacement rate from 55 percent to between 60 percent and 70 percent depending on income.

Jeff Chiu/AP/File

Kim Turner holds her daughter Adelaide Turner Winn before a rally supporting paid family leave at City Hall in San Francisco, on April 5, 2016. California Paid Family Leave (PFL) provides up to 6 weeks of partial pay to employees who take time off from work to care for a seriously ill family member or to bond with a new child. On Jan. 1 2018, California expanded the paid family leave benefits and decreased the wait time.

Some cities are coming up with their own policies, too, independent of state laws. In San Francisco, for example, employees can now receive full pay during leave. The city ordinance, instituted in January, requires employers to fill in for the 40 percent of pay that the state program doesn’t cover.

There's a glimmer of movement at the federal level. In February, Sen. Marco Rubio (R) of Florida and Ivanka Trump were collaborating on a paid family leave proposal which would use Social Security benefits to pay for paid leave. “For the first time at the federal level we have at least proposals on both sides of the political aisle – they’re very different proposals – but that’s new,” says Christopher Ruhm, a professor of public policy and economics at the University of Virginia in Charlottesville.

“There’s a lot of momentum,” adds Ruth Milkman, a professor of sociology at the CUNY Graduate Center in New York. “Working people are really feeling the pinch of trying to balance out their family obligations with their paid work.”

More dads are opting in for paid family leave when they can get it. In California, Alptekin is one of about 77,152 men who took paid leave in 2017, double the number in 2009, according to numbers published by the California Employment Development Department. The surge is part of a generational shift in the way Americans view men’s role in the family: More than 80 percent of Americans ages 18 to 29 support paternity leave compared with just over half of Americans older than 64, according to a report by the Urban Institute. 

“The new dads that are becoming dads now are just more likely to think they’re supposed to play a role,” says Jenya Cassidy, a project director at California Work & Family Coalition. “Paid leave itself is impacting it, but I think we’re also seeing a shift in how parenting happens because both parents work so often and they have to play that role, too, and they like to play that role.”

There’s evidence that family leave programs improve participation rates for mothers in the workforce, and labor market outcomes generally, Professor Ruhm says. The policy also extends the amount of time mothers have to breastfeed their children and increases bonding time for both parents, Ms. Cassidy says.

It’s also helpful financially. “I don’t have to wait the seven day period [to get paid], and that will help out,” Alpetkin says, “because last time I burned through a lot of vacation [hours].” Vacation hours can be used to supplement the partial pay to still obtain 40 hours of pay each week.

Still, some are concerned that low wage earners, for instance, may have less to gain than their middle- and high-earning counterparts. “Low wage workers are going to not be able to stay out of work for very long because they don’t think that [55 percent wage replacement] is a high enough amount,” says Dr. Mathur, referring to California's former wage replacement rate. Some may not even know the option is available to them: It’s estimated that 50 percent of residents don’t know they are eligible for taking the state leave, says Mathur.

Small-scale employers also say that the program is yet another requirement in California’s long list of regulations that make it hard to start and succeed in business in the state. “Small employers should have flexibility to work with their employees on health care, leave, and other programs that work best for their business,” says John Kabateck, California state director for the National Federation of Independent Business.

Some scholars say paid family leave has had little effect on businesses in general, especially as an employee payroll tax. In California, 90 percent of businesses said it had no impact on profitability, no impact on productivity, a positive impact on morale, and a positive impact on turnover, Professor Milkman finds. 

As they prepare to welcome their second child, Alptekin and his wife are scheduling out who will take paid leave and when. It’s important to take on new challenges together, says Alptekin, and he likes being able to support his wife, her work, and their growing family. “She shouldn’t have to be the one to sacrifice everything … there should be an opportunity for fathers to do the same and [contribute] toward the family,” he says.

Editor's note: This story has been updated to reflect a more accurate number of men in California who took paid leave in 2017. 

At the moment, it's nothing more than a huge construction site on the outskirts of Warsaw. But when it’s done, commuters will have smooth new platforms that they’ll access via an underground tunnel that won’t sit underwater every time it rains.

“It was in really bad shape,” says Piotr Chyralecki, who works at a kiosk near the station.

The transformation of this commuter hub is just one of hundreds since Poland joined the European Union in 2004: 4 billion euros ($4.7 billion) in EU funds over the past decade have supported nearly 600 projects in Warsaw alone. In the period 2014 to 2020, the EU has earmarked 86 billion euros ($102 billion) for Poland, making it the largest recipient of aid in the bloc. The budget is making it easier and safer for Poles to travel, connecting once remote villages to cities, and opening up new business opportunities across the country.

The upgrade in Polish infrastructure is the physical manifestation of what it means to belong to the EU.

And now the bloc is considering a new budget that would cut funds for member states that undermine the rule of law. As Poland's ruling Law and Justice party (PiS) and Hungarian Prime Minister Viktor Orbán clash with Brussels over attempts to rein in their judiciaries, media, and civil society, billions of euros are at stake.

The proposals are a sign of just how significant the rift between Eastern and Western Europe has become in the EU, as former Soviet countries grapple with state capture and stunted democratic transformation.

While the funding proposals are controversial and could be viewed as a power grab itself by the EU, many also point to them as a new instrument that might finally crystallize the stakes for the public. The rise in populism in this part of the EU is often explained as a consequence of failed communication about what accession to the bloc really meant – that it’s more than just an economic transaction. If those concrete benefits are under threat, the public might begin to question more deeply how committed they need to be to the so-called core values of Europe.

“The attitude in many of the new member states ... is a bit more transactional than you find in Belgium or France or Luxembourg,” says Stefan Lehne, a visiting scholar at Carnegie Europe in Brussels, who focuses on relations between the EU and member states. “For them their wish to belong to the EU was always linked to expectations of concrete benefits.... If important benefits would be under threat, the governments would come under pressure.”

The post-Soviet poster child

According to the proposals for the 2021-27 budget, funds could be withheld from countries that don’t abide to treaty obligations on rule of law, such as maintaining independent courts. How much money is in jeopardy would only become clear after difficult negotiations, but the intention is clear: the EU wants the measures to be proportionate to the threat a country’s actions pose to the rule of law.

The proposal comes amid criticism that the EU is not doing enough to ensure democracy in its own house. The bloc took the unprecedented step of triggering Article 7 for the first time in response to Poland’s controversial judiciary reform, which in theory would cost the country its voting rights. But the mechanism requires unanimity, and Hungary – which has been charting its own illiberal path – has long said it would block any such measure.

Kacper Pempel/Reuters

Warsaw citizens attend an open house at the construction site of one of the stations along the capital's second metro line in Warsaw in September 2013. A

The disciplinary action, and threat of more, are an embarrassment for the poster child of post-Soviet transformation. Piotr Nowina-Konopka, who was deputy negotiator on Poland's accession to the EU, says that the principle of rule of law was “obvious” at the time Poland joined the EU. “When you join the club you have to obey its rules,” he says. Only a decade out from communism at the time, he says, "we knew that this criterion was the most important, a condition without which there was no sense of thinking about EU membership.”

Pro-EU sentiment still runs high across Poland. At a celebration of Europe Day (May 9) in Warsaw, Poles gathered recently to sing the EU anthem, “Ode to Joy.” “Poland has made a huge step forward thanks to the EU,” says Beata Wolszczak, a teacher at the annual march.

But anti-EU sentiment is also growing, and on many issues there is a clash between Polish identity and a culture many feel Brussels imposes on them. A CBOS poll published in December 2017, for example, showed that 74 percent of respondents were against taking refugees from Muslim countries even if the EU would cut funds in response.

And Ms. Wolszczak, like many, worry about the EU's plan fueling more populism. The plan envisions governments making up for the loss of EU funds from their own pockets, but it becomes an easy political football. The Polish government has already staked out the position that the EU funds are “compensation” due Poland for the opening of its market to the bloc. “I'm afraid that Poles would turn away from the EU if Brussels cuts the funds, because the government's propaganda against the EU will be very strong,” Wolszczak says.

This could, in turn, lead to what Mr. Nowina-Konopka calls a “soft Polexit”: not loss of membership but loss of engagement. He laments that already Poland is no longer invited to participate in informal meetings of the five biggest countries in the EU about the budget.

Leverage against Orbán?

Anti-EU propaganda has helped Mr. Orbán consolidate power in Hungary since 2010. On many fronts he has gone much farther than PiS – with both more time and more political leeway – and is seen as thus harder to tame.

Benedek Jávor, a Hungarian opposition member of the European Parliament, says that the threat of withholding funding could finally shift the narrative. “To put it simply, it would end an era when a few corrupt and illiberal states are able protect one other,” he says. Mr. Jávor complains that newer member states faced a higher bar to prove democratic credentials to join the EU than they do as members and says the European Commission has been “too soft.”  

The Hungarian government has not elaborated on potential funding cuts. “There are EU treaties in force, and we work on the basis of these,” says Zoltán Kovács, spokesman of the Hungarian government, refusing to go into further detail.

Orbán attempted to downplay the EU's proposals to the Hungarian public. “Keep calm,” he said in his Friday morning interview on the government-controlled National Public Radio after the budget proposals were unveiled. “The debate will be long and drawn out, but ultimately it has to have unanimous support,” he said.

Krisztian Szabados, director of Political Capital Policy Research and Consulting Institute, says Orbán is incorrect that Hungary's consent is required. Rather, Mr. Szabados says, amendments were intentionally devised to require a qualified majority, not unanimity, in order to avoid the complications that Article 7 have posed.

Orbán has spent more time since the EU's budget proposals on his bread-and-butter issues, like railing against George Soros, the Hungarian-American philanthropist who helped grow Hungary’s democratic institutions after the fall of the Iron Curtain. Orbán claims Mr. Soros wants to send millions of migrants to Hungary. This week Soros’s Open Society Foundations announced that, facing government hostility, they were moving their Budapest-based operations to Berlin.

Robert Grzeszczak, a professor who specializes in EU law at the University of Warsaw, says that threatening funds could force governments to end their double speak: bashing the EU while taking its money. “I think that the government will not go to war with the EU and will try to find a compromise,” he says. In fact, only recently PiS has softened its tone on cooperating with the EU on the bloc’s legal concerns.

A threat to national sovereignty

But challenges remain, and not just within the countries where funding is at stake. The proposal would empower the European Commission to judge the rule of law in sovereign countries, which could backfire since the EU itself is often faulted for its own democratic deficits. “The judgment of whether rule of law is functioning or not goes to the heart of national sovereignty,” says Mr. Lehne in Brussels. “Many countries would say ‘We don’t want to give the Commission the power to tell us if our judiciary is independent or not.’”

“All of these countries who feel European integration has gone too far and powers need to be returned to member states would be …  quite reluctant to go down that road,” Lehne says.

It could also generate claims of hypocrisy and a sense of “us” v. "them." Western Europe is not immune to corruption: The recent legal woes of Silvio Berlusconi in Italy or Nicolas Sarkozy in France underscore that point.

The funds were intended to bridge divides between poorer and wealthier Europe. On a recent day on the Krakowskie Przedmieście, one of the most prestigious streets of Warsaw thanks to an uplift with EU funds, Jerzy Szafranowski, a doctoral candidate in history at the University of Warsaw, says the funds have completely changed the landscape of his country. Yet while he supports the plan, he also believes it’s a minefield.

“Poles feel that this money is due to them,” he says, and not just because of what they contribute into the common budget but because Poland was not helped under the Marshall Plan after World War II. He believes withholding funds could aggravate resentments already on the surface – the reason populism has thrived in Poland in the first place.

“Poles still have complexes when they compare themselves with Western Europe, many of us don't feel like real Europeans," he says, “and maybe that's why some want to underline their Polishness, that this is a real value.”

AP Photo

Femmei Niahosa, left, of the Tsao people of Taiwan, attends the United Nations forum on indigenous issues April 16 at U.N. headquarters.

A country’s attractiveness to the rest of the world can come in many forms, such as cultural exports, foreign aid, high-tech inventions, or its degree of freedom. One type of “soft power,” however, is often overlooked: a generosity toward languages.

In recent months, the island nation of Taiwan, which has been conquered by several foreign forces in recent history, is moving fast to embrace its language diversity. Last year, it gave “national status” to the mother tongues of minority indigenous groups, many of whom live in the mountains. And soon legislators are expected to define Taiwanese, which is widely spoken, as a national language.

The move may seem strange, but it is an effort to free Taiwan of a language imposed on it – Mandarin Chinese – in 1949 when the army of Chiang Kai-shek fled from the mainland to escape the takeover of China by the Communist Party. Chiang tried to end the use of Taiwanese and other languages, enforcing Mandarin in schools and official documents on the assumption that his Nationalist Party would eventually rule the mainland again.

If anything, it is now Beijing’s ruling party that is bearing down on Taiwan and its 22 million people, claiming the island is simply a renegade province. In recent months, China has sent war planes and naval ships closer to the island’s maritime border.

Taiwan has never officially declared independence out of fear of retribution from China. Yet it has effectively claimed independence in other ways. Since 1987, it has moved steadily toward democracy. It maintains diplomatic ties with many nations. And now it has broadened its official languages beyond Mandarin.

Its language policy is in sharp contrast with that in China, where a law enacted in 2000 requires Mandarin as the sole national language – despite the presence of more than 100 local languages. Beijing has imposed the language in the classrooms of ethnic minorities and has jailed at least one activist, in Tibet, who campaigned to maintain the local language. And the policy has caused a backlash in Hong Kong, whose identity is embedded in the Cantonese language.

Many nations, such as Canada and India, have learned how to tolerate different languages while still finding a way to conduct business and the work of government. Their openness to other tongues is an attraction more than a nuisance, especially in a global economy.

Young people in Taiwan have taken to calling themselves the “natural independence” generation. They do not need to declare official independence from China, only to claim an identity based on the values of tolerance and empathy toward others on their island.

Its military power cannot match that of China’s. But Taiwan’s soft power keeps getting stronger.