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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 changed the United States and the world. His second decision is likely to have a deeper impact.
“From this day forward,” Trump said. In his inaugural address“The United States of America will be a free, sovereign, and independent nation.” We have become so accustomed to such expressions of self-pity from him and those around him that they have (almost) ceased to frighten them. However, 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 has helped shape the world in which we live. What prevented the United States from being a free, sovereign, and independent nation? nation? The answer seems to be self-imposed obligations and voluntarily accepted limits on her authority. Now, he suggests, the United States will do whatever it wants. The United States no longer made claims to moral leadership: it declared itself another superpower under the old slogan: “Might makes right.”
How does the world view this event? In “Alone in a Trump World” European Council on Foreign Relations The results of public opinion polls around the world have just been published. They are great. The people most disturbed by Trump's second coming are the citizens of his closest allies. Only 22% of European Union citizens, 15% of Britons, and 11% of South Koreans believe that his return is a good thing for their country. Meanwhile, 84% of Indians, 61% of Saudi Arabia, 49% of Russians, and 46% of Chinese believe it is good for their country. (See charts.)
This indicates “the masses' embrace of a more transactional world,” the report notes. However, for close US allies, it marks the end of the bonds of trust they rely on. They can no longer benefit free from the power of the United States. Maybe this serves them right. But it's about more than just their adoption. Post-war Europeans truly believed in the “liberal international order.” For them, his disappearance is a great disappointment. The so-called “Global South” has mostly not done so, and is therefore more comfortable with Trump’s transactional approach.
In two important areas – trade and the global environment – Trump’s approach will create special challenges. In the first, there was already a liberal order, built around global institutions that promoted trade liberalization and provided a great deal of stability to the trade policy environment. This was particularly important for small, trade-dependent economies. As a result, the ratio of trade in goods to global output rose from 5 percent at the end of World War II to 15 percent at the end of the Cold War, and 25 percent on the eve of the global financial crisis. Since then it has remained in stasis.
How much damage will Trump's tariff wars cause? Trade has collapsed before. Would he do it again? Trump has an idea (one of his many ridiculous ideas) that foreigners will pay his tariffs. The truth is that Americans will: he is not just a bully, he is a stupid person. Pity poor Canada and Mexico. So how should victims respond? revenge, says Dani Rodrik of Harvard UniversityIt is expensive for those who adopt it. So, be careful.
The second critical area is climate change. MAGA Republicans say this is a hoax. So, Trump declares: “We'll dig, baby, we'll dig.” In 2024, According to NASAGlobal temperatures were 1.28°C higher than the 1951-1980 baseline, the highest level ever recorded. Atmospheric carbon dioxide concentrations continue to rise. So, it should be “Burn, baby, burn.” This indifference to the fate of the planet could be devastating. This also creates major concerns for the rest of the world.
On the other hand, will King Donald be able to enjoy the American economic boom? Which is unlikely, not least because the economy he inherited is already very far from the disaster he keeps announcing. On the contrary, the US economy has significantly outperformed its peers since the outbreak of the pandemic. In January Updated global economic forecastsThe International Monetary Fund expects growth to reach 2.7% in 2025. This is 0.5 percentage points higher than the October forecast, a rate that other high-income economies can only dream of. Trump should thank Joe Biden for this commandment.
Considering how good things are, the easiest way from here is down. In the short to medium term, the combination of persistently loose fiscal policy with deregulation, tariffs, and mass expulsions of immigrants is likely to reignite inflation. This would then lead to a destabilizing conflict between the president and the Federal Reserve. If this is combined with a new wave of financial deregulation, it could lead to another financial crisis. This, in turn, would cause the historically high-value stock market, the only measure Trump cares about, to collapse. Moreover, Trump inherits a fiscal deficit projected by the Treasury Secretary Congressional Budget Office The debt ratio reached 6.2 percent of GDP this year, with debt in the hands of the general public reaching 100 percent and rising sharply. This is an unsustainable path. The hope seems to be that massive spending cuts will close the gap. But this will not be big enough, and will come at the expense of his political supporters. Perhaps he no longer cares in his second term. But they definitely will.
Trump is unpredictable. Perhaps he will achieve just peace in Ukraine and the Middle East. Perhaps he will put most of his threats and promises in the Oval Office trash can, bask in his status, and leave his country and the world in good stead. It seems likely that major damage will be caused to the Western alliance, global trade, the global environment, and American and global institutions. However, in this speech he declared: “My proudest legacy will be that of a peacemaker and unifier. That is what I want to be.” That's what we all want it to be too.
