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Your guide to what the 2024 US election means for Washington and the world
What effect will the second coming of Donald Trump have on the world? The world is unpredictable. Trump is also unexpected. His first presidency changed the US and the world. The second may have a more profound impact.
“From this day forward,” Trump said in his inaugural address“The United States of America shall be a free, sovereign and independent nation.” We are so used to such self-pity statements from him and those around him that they have (almost) ceased to be surprised. 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 has shaped the world we live in. society? The answer, it seems, is self-imposed obligations and restrictions that are voluntarily accepted under its own authority. Now, he suggests, the US will do whatever it wants. The US ceases to have the pretense of moral leadership: it calls itself another great power under the old slogan: “might be right”.
How does the world view this event? To “You in a Trumpian World”, European Council on Foreign Relations has just published the results of a global public opinion survey. They are interesting. The people most worried about 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 that his return is a good thing for their country. Meanwhile, 84 percent of Indians, 61 percent of Saudi Arabians, 49 percent of Russians and 46 percent of Chinese think it is in the best interest of their country. (See charts.)
This, suggests the report, reflects “social acceptance of a world of multiple interactions”. However, for the US’s closest allies it marks the end of the bonds of trust they relied on. They can be free riders on US power no more. Maybe that serves them well. But this is about relying solely on them. Post-war Europeans really believed in “liberal international order”. For them, its disappearance is a great pity. The so-called “global south” has generally not done so and is more comfortable with Trump’s style of transfer.
In two key areas – trade and the global environment – Trump’s approach will present special challenges. In the first period, there was actually a liberal system, built around international organizations that promote trade freedom and provide more stability in the business policy environment. This was especially important in a small economy that depended on trade. As a result, the ratio of trade in goods to world production rose from 5 percent at the end of the second world war to 15 percent at the end of the cold war and 25 percent before the global financial crisis. Since then it has been stagnant.
How much damage will the tariff wars started by Trump cause? The business has failed before. Will it do so again? Trump has an idea (one of his many stupid ones) that foreigners will pay his bills. In fact, the Americans will: he is not only a champion, but an idiot. He took pity on the poor in Canada and Mexico. So how should victims respond? revenge, argues Dani Rodrik of Harvardit costs a lot of money for those who receive it. So, be careful.
The second important area is climate change. This, say Maga Republicans, is a lie. So, Trump declares “we’re gonna dig, baby, dig”. In 2024, according to NASAglobal temperatures were 1.28C above their 1951-80 baseline, the highest ever recorded. Atmospheric CO₂ levels are increasing. So, it should be “hot, baby, hot”. This indifference to the fate of the planet can cause great damage. That, in turn, is causing great concern throughout the world.
Meanwhile, will King Donald be able to enjoy the revival of the American economy? It won’t happen, however, because the economy he inherited is far from the crisis he constantly proclaims. In contrast, the US economy has outperformed its peers since the pandemic. In its January Development of the World Economic OutlookThe IMF states that “growth is expected to be 2.7 percent in 2025”. This is 0.5 percent higher than what was forecast in October and a rate that most economies can only dream of. Trump should thank Joe Biden for this request.
Given how good things are, the easiest way from here is down. In the short to medium term, the combination of ever-loosening fiscal policy and unregulated deregulation, tariffs and mass deportations are likely to trigger financial development. That would cause a confusing conflict between the president and the Federal Reserve. Combined with the new reduction in financial regulation, this could lead to further financial problems. This, in turn, could lead to a historic stock market crash, a metric that Trump cares about. In addition, Trump inherits the budget deficit forecast Congressional Budget Office with 6.2 percent of GDP this year, with public debt at 100 percent and rising significantly. This is an unstable path. The hope seems to be that more cuts will close the gap. But these will not be large enough and will come at the expense of his political supporters. Maybe, in his second term, he doesn’t care anymore. But they certainly will.
Trump is unpredictable. Perhaps, he will provide the right peace in Ukraine and the Middle East. Perhaps, he will put most of his threats and promises in the Oval Office wastebasket, hide his position and leave his country and the world on good terms. Major damage to the western alliance, global trade, the global environment, and the US and global organizations seem to be in the offing. However, he announced, in this speech, that: “My proudest legacy will be to create peace and unification. That’s what I want to be.” That’s what we all want him to be, including us.
