OPINION – Trump 2.0 – The world must learn how to deal with a different America

By José Luís de Sales Marques
Economist

The much-anticipated inauguration of Donald Trump as the 47th president of the United States of America was a super MAGA (Make America Great Again) show, with the first official part at Capitol Hill in Washington D.C., the second at the parade at Capital One Arena, with thousands of supporters chanting and cheering as a great number of executive orders were signed by the new president, and continued at the Oval Office, with more executive orders and live commentaries about the policies and actions they are intended to accomplish. It was a most unusual inauguration ceremony! Trump’s long speech was dedicated firstly to himself and his achievements, proclaiming his presidency would make America great again every day for the next five years, and also directing virulent attacks at the outgoing administration, as his predecessor, the defeated Biden, and his VP Kamala Harris were seated just next to him. The tone of those attacks might have been even harsher if the new president knew—apparently he did not—that before leaving office, Biden took the morally questionable move to preemptively pardon for life all his family, after doing the same for his own son, whose misconduct is allegedly criminally accountable. This late Biden action is also a scary sign of how fractured America has become, with no remedies in sight!

The inauguration day started on quite a gentle tone, with the two presidents and their spouses having tea at the White House and sharing limousines on their way to Capitol Hill. The choreography was carefully designed to convey the image of a peaceful transition in contrast with what happened five years ago. In a twist of fate, Washington’s inclement winter dictated that Capitol Hill would be the inauguration venue, when the same place was a “crime scene” in 2020, invaded and seriously damaged by a mob of Trump supporters rioting to overrun the electoral results that gave Biden the presidency.

The first days of the new president’s agenda have been filled with the signing of a great number of executive orders, which are indicative of his priorities as well as policy decisions. Most of these policies are similar to those of his first term; therefore, those directives were cooked up for some time, and were just waiting to be formalised. However, there is some caution on the issue of tariff increases on imports—broadly announced for a number of countries—but not yet signed at the time of this writing. Tariffs seem to be at the core of his international trade policies, since, seemingly, trade balance is, in his view, the heart of a nation’s economic health. Punitive tariffs were introduced in his first term as president, targeting Chinese imports but also imports from other nations, including those of the European Union. It doesn’t really matter that, as John Bolton, his former National Security Adviser and now a declared enemy, has recently said, “tariffs are indirect taxes on American people.” Therefore, executive orders on that matter have so far covered instructions to his administration to examine the causes of U.S. trade deficits, identify unfair trade practices and make recommendations, potentially including “a global supplement tariff.” It also covers reviews of the US-Mexico-Canada Agreement and the US-China Agreement on trade, both signed in 2020 under the previous Trump administration. The former will be renegotiated in 2026 and soon it will be known if Trump will effectively impose a 25% tariff on Canadian and Mexican goods. Trump also threatened to impose tariffs as high as 60% on goods imported from China, but his most recent comments on the matter are more contained, leaving the idea that there will be hard bilateral negotiations on the issue. Included in the first batch of executive orders was the 75-day pause on the implementation of the U.S. ban on the Chinese app TikTok, a law passed by Congress in 2020, which reveals the transactional side of Donald Trump that many commentators expect will somehow moderate the outcomes of his administration.

Most of the executive orders signed in his first week in office are directed to the domestic realm. They focus on immigration, social, and cultural domains, such as the restoration of the “Remain in Mexico” policy and measures approved during his first presidency on control and further militarisation of the southern border; the cancellation of the DEI “diversity, equity, and inclusion” programme; government restructuring by creating the “Department of Government Efficiency,” which is expected to be led by Elon Musk; and energy directives restoring and further exploring oil and gas resources, including in Alaska.

There are, however, a significant number of those orders with foreign policy implications. First and foremost, the executive order directing U.S. withdrawal from the 2015 Paris Agreement on climate change echoes his 2017 directive of similar nature, which will deal a blow to worldwide efforts to combat global warming and once again distance the U.S. from its closest allies. Another directive with global consequences is the U.S. withdrawal from the World Health Organisation (WHO). The designation of drug cartels and transnational gangs as terrorist organisations seems to be directed primarily at those based in Mexico, associated with fentanyl contraband. Implications on American foreign policy will depend on its implementation—whether there will be some kind of intervention on foreign soil, or whether the control on the financial and supply chains of these organisations will lead to sanctions on foreign companies and even third countries. Trump’s verbal attacks on his neighbours Mexico and Canada, accusing them of a series of faults and misconduct, are indications that his administration will put a lot of stress on those countries and their respective governments, which are not favoured by the new team at the White House.

Amidst many uncertainties, there is also some hope that Donald Trump’s presidency will contribute to ending the war in Ukraine, which is seen by him and his supporters as a waste of public American money and a senseless carnage, as he has definitely contributed to the settlement of the ceasefire in Gaza, striking a deal between Israel and Hamas in the last days of Biden’s presidency.

As the US ‘beacon of freedom mantra has dimmed, the world will have to learn how to deal with it, particularly its traditional friends and allies. It is an America that will be domestically tough on a majority of its citizens—many of whom actually voted for Trump—and internationally will try to dictate the terms of engagement with third parties, mostly by prevailing bilateral relations and staying away from multilateral organisations, to get the most material benefits from those relations. Contrary to belief, Trump is not trying to isolate America from the world but to dominate it according to his own unconventional beliefs of America’s exceptionalism—which is his exceptionalism—and unipolarity, and how international economics and politics work. What the world needs to do is learn how to live in peaceful and cooperative co-existence with this new version of America, respecting differences but also striving to keep a good balance of diverse interests.

Let us hope that the Year of the Snake will bring wisdom and wealth to all parties and peace will fall on Earth!

Kung Hei Fat Choi!

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As the US ‘beacon of freedom mantra has dimmed, the world will have to learn how to deal with it, particularly its traditional friends and allies. It is an America that will be domestically tough on a majority of its citizens—many of whom actually voted for Trump—and internationally will try to dictate the terms of engagement with third parties, mostly by prevailing bilateral relations and staying away from multilateral organisations, to get the most material benefits from those relations