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Your guide to what the 2024 US elections mean for Washington and the world
What impact will the second coming of Donald Trump have on the world? The world is unpredictable. Trump is also unpredictable. His first presidency transformed the United States and the world. His second will likely have a deeper impact.
“From this day forward,” Trump said in his inaugural speech“The United States of America shall be a free, sovereign and independent nation.” We are so accustomed to such expressions of pity from him and those around him that they have (almost) ceased to surprise. Yet he is talking about the most powerful country in the world, which has been at the forefront of innovation for a century and a half and which has shaped the world we live in. What stopped the United States from being a free, sovereign, and independent country? nation? The answer, it seems, lies in self-imposed obligations and voluntarily accepted constraints on his own power. From now on, he suggests, the United States will do what it wants. The United States ceases to have pretensions to moral leadership: it proclaims itself another great power under the old motto: “might makes right.”
How does the world perceive this event? In “Alone in a Trumpian World,” the European Council on Foreign Relations has just published the results of public opinion surveys around the world. They are fascinating. The people most disturbed by Trump’s second coming are the citizens of his closest allies. Only 22 percent of EU citizens, 15 percent of Britons and 11 percent of South Koreans think his return is a good thing for their country. Meanwhile, 84 percent of Indians, 61 percent of Saudis, 49 percent of Russians and 46 percent of Chinese think it is good for their country. (See charts.)
According to the report, this demonstrates “the public’s embrace of a much more transactional world.” Yet for America’s close allies, it marks the end of the bonds of trust they rely on. They can no longer take advantage of American power. Maybe it serves them well. But it’s not just about their simple addiction. Postwar Europeans truly believed in the “liberal international order.” For them, his disappearance is a huge disappointment. The so-called “Global South” has virtually never done this and is therefore more comfortable with Trump’s transactional approach.
In two important areas – trade and the global environment – Trump’s approach will create particular challenges. In the first case, there was indeed a liberal order, built around global institutions that promoted trade liberalization and provided substantial stability to the trade policy environment. This was of particular importance for small, trade-dependent economies. As a result, the ratio of trade in goods to world output rose from 5 percent at the end of World War II to 15 percent at the end of the Cold War and to 25 percent on the eve of the crisis. global financial sector. Since then, it has stagnated.
What damage will be caused by the tariff wars launched by Trump? Trade has already collapsed. Will he do it again? Trump has the idea (one of his many idiotic ideas) that foreigners will pay his tariffs. In fact, Americans will: he’s not just a tyrant, but a stupid one. Too bad for Canada and Mexico, poor. How then should victims react? Reprisals, says Dani Rodrik of Harvardis expensive for those who adopt it. So be careful.
A second crucial area is climate change. This, say the Maga Republicans, is a hoax. So, Trump declares that “we’re going to drill, baby, drill.” In 2024, according to NASAglobal temperatures were 1.28°C above their baseline from 1951 to 1980, the highest on record. Atmospheric concentrations of CO₂ continue to increase. So it’s “burn, baby, burn.” This indifference to the fate of the planet could prove devastating. It also creates huge concerns for the rest of the world.
Meanwhile, will King Donald be able to benefit from an American economic renaissance? This is unlikely, especially because the economy he inherited is very far from the disaster he keeps proclaiming. On the contrary, the US economy has significantly outperformed its peers since the pandemic. In January World Economic Outlook Updatethe IMF states that “growth is expected to be 2.7 percent in 2025.” That’s 0.5 percentage points higher than in its October forecast and a rate that other high-income economies can only dream of. Trump should thank Joe Biden for this legacy.
Given how good things are, the easiest path from there is down. In the short and medium term, the combination of a still lax fiscal policy with wild deregulation, customs duties and the mass expulsion of immigrants is likely to revive inflation. This would then trigger a destabilizing conflict between the president and the Federal Reserve. Combined with a new wave of financial deregulation, this could trigger a new financial crisis. This, in turn, would cause the collapse of a historically highly valued stock market, the only measure Trump is interested in. Additionally, Trump inherits a budget deficit forecast from the Congressional Budget Office to 6.2 percent of GDP this year, with public debt at 100 percent and rising sharply. This is an unsustainable path. The hope appears to be that massive spending cuts will narrow the gap. But these measures will not be significant enough and will come at the expense of his political supporters. Maybe in his second term he won’t worry about it anymore. But they surely will.
Trump is unpredictable. Maybe he will bring just peace to Ukraine and the Middle East. Perhaps he will put most of his threats and promises in the Oval Office wastebasket, take advantage of his status, and leave his country and the world in good shape. Substantial damage to the Western alliance, global trade, the global environment, and U.S. and global institutions appears more likely. Yet he proclaimed, in that speech, that: “My proudest legacy will be that of a peacemaker and a unifier. This is what I want to be. It’s also what we all want it to be.