Trump Incoming

Introduction

2024 oversaw what, at first, appeared to be a tightly contested competition between the Democratic and Republican presidential nominees. In a result that surprised many, the victory ultimately went to Donald Trump, marking one of the most remarkable political comebacks in modern history. Whilst Trump’s first term was marred by controversy, it largely unfolded without major events on the global stage. However, judging by the rhetoric since his second presidential victory, the President-elect’s behaviour suggests a shift towards a far more volatile and unpredictable future. As Trump prepares to assume the most powerful seat in the world, we ask: what can we expect from his first few months in office?

This blog seeks to shine a light on some of these areas and forms part of our five-piece article series on the new Trump administration. This series started with our Trump election win post from November, followed by this piece taking a look at policies on the table as Trump prepares to enter the White House. We will then follow with articles covering Trump’s first 10, 30, and 90 days in office, as we collectively seek to develop an understanding of the true policy agenda of the incoming administration, and how this is likely to affect global macroeconomics and markets

Economic Policy and Ambitions Beyond U.S. Borders

A central pillar of Trump’s economic strategy has long been the use of tariffs to reshape global trade relationships. Since the U.S.-China trade war began in 2018, tariffs have affected over $250 billion worth of Chinese imports, with Beijing retaliating on $110 billion of U.S. goods. Trump’s second term is expected to see a revival and expansion of these tactics, potentially escalating tensions with China and sparking new tensions with Mexico, Canada, and Europe, with trade in the $850bn of goods potentially being in the crosshairs.

His administration’s rhetoric indicates that tariffs will remain a key weapon in asserting U.S. economic dominance, with potentially widespread implications for global trade and markets. At the time of writing, Trump is reportedly contemplating the use of executive orders to impose widespread tariffs against both allies and adversaries through the International Economic Emergency Powers Act.

Trump’s geopolitical ambitions have raised eyebrows, particularly his refusal to rule out military intervention to acquire Greenland or Panama. These potential aspirations, supported by segments of the MAGA base, reflect a bold and controversial vision of American expansionism. Greenland’s strategic importance to NATO makes it a focal point of Trump’s interest, and as global warming continues to reshape the arctic climate and open new sea routes its importance is likely to only increase. While control of the Panama Canal, a 51-mile waterway that cuts across Central America and significantly reduces the time it takes for ships to traverse from the Pacific to the Atlantic Ocean, also has clear economic benefits. With 300 million tonnes of cargo passing through each year, any disruption will have a global economic and political impact.

Trump has repeatedly mocked Canada by calling it the 51st state and touted annexing the sovereign nation through economic force, as opposed to military intervention, a move that members of the Canadian government are calling the most serious threat to Canadian sovereignty since the war of 1812. One potential strike point could be their automobile industry; as it stands Canada currently produces 20% of the cars sold in the U.S., a figure which Trump has openly criticised.

Whilst implementing tariffs will benefit some domestic industries such as automotive, steel, aluminium and textiles, many products (particularly electronics) have a global supply chain that may inadvertently increase prices to U.S. consumers.

As with many of Trump’s claims, his true intentions are harder to decipher. Does he fully intend to carry out his threats? Or is this just sabre-rattling to bully countries into beneficial terms for U.S. economic and foreign policy? Time will tell.

Energy Policy and the Environment

Environmental policies are set to undergo a dramatic shift under Trump’s leadership. For example, the President-elect has pledged to reopen the Arctic National Wildlife Refuge for drilling. Restrictions on fossil fuels are also expected to be lifted, while Trump is reportedly considering executive orders to withdraw the U.S. from the Paris Climate Agreement, for a second time. These moves, aimed at bolstering traditional energy sectors, are likely to spark fierce domestic and international opposition.

However as noted in our previous blog on this topic, while Trump is likely to provide support for carbon-intensive industries, we don’t think this will necessarily be combined with an aggressive stance against the green energy sector, given this is one of the leading industries in the U.S., and the key role it plays in contributing to the U.S.’s energy sovereignty. Once again, time will reveal the true outcome in this area.

Elon Musk and the Tech Influence

Trump’s relationship with high-profile tech leaders, specifically Elon Musk, is poised to shape his administration. Musk’s vocal criticism of the UK government and his push for new elections, alongside support the UK’s Reform party, have drawn international attention. These dynamics appear to signal a broader alignment between Trump and leading technology figureheads such as Amazon’s Jeff Bezos and Meta’s Mark Zuckerberg, who have made significant donations to Trump’s inauguration fund, with a seemingly apparent goal of seeking influence and favour with the incoming administration.

A New Administration and Key Appointments

Trump’s second-term administration is set to feature notable figures, including Robert F. Kennedy Jr., who is expected to oversee public health agencies. This appointment, alongside others, signals a willingness to embrace controversial and unconventional choices. As the new team takes shape, the dynamics within Trump’s cabinet will be critical in determining the administration’s direction. The current U.S. Supreme Court has 6 justices appointed by Republican presidents giving them a conservative majority, as the highest-ranking judicial force, this gives the Republican Party immense power over federal legal rulings and will likely further drive the gap between Democratic and Republican viewpoints.

Foreign Policy and Global Conflict

Trump’s foreign policy agenda is ambitious, featuring a 100-day plan led by Keith Kellogg to
address the war in Ukraine. While the specifics remain unclear, the strategy may involve a withdrawal or reduction in U.S. support, potentially pressuring Ukraine to make concessions for peace.

His alignment with leaders like Viktor Orbán, who wields veto power in NATO, may challenge European cohesion. Meanwhile, Trump’s approach to China and Iran may involve heightened tensions. Reports of Iran conducting drills believed to prepare for a U.S. or joint invasion with Israel highlight the precarious state of international relations. Trump’s “America First” policy also raises concern for Taiwan, without the mutual defence treaty between the United States and Taiwan, China’s promise of reunification may come through force, with other nations unwilling to come to the defence of Taiwan in fear of China’s growing military might.

UAP Disclosure

To end on a somewhat alternative note, one of the other areas Trump has expressed support for is the disclosure of Unidentified Aerial Phenomena (UAP). This initiative has sparked significant public interest, particularly of late with mass “drone” sightings across the U.S., with some individuals anticipating unprecedented transparency regarding UAP-related information under the new administration. While largely seen as a fringe issue, this would undoubtedly captivate newsrooms across the globe. As such, time will tell as to what extent there is something, or nothing, to be revealed.

Conclusion

As Donald Trump prepares to enter his second term, his agenda promises sweeping changes across domestic and international fronts. From bold economic strategies and energy reversals to controversial foreign policy moves and deregulation, the next few months will set the tone for a presidency that is likely to be as unpredictable as it is transformative. The world watches with bated breath to see how Trump’s vision is realised, and we look forward to sharing analysis of this with you as the situation unfolds.

Disclaimer

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