The US president has forced America’s friends and foes alike to reassess their strategic and economic options
Brahma Chellaney
Brahma Chellaney
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04 Apr, 2025
US President Donald Trump signs an executive order imposing tariffs on imported goods in the Rose Garden of the White House, April 2, 2025
Since his return to the White House, US President Donald Trump has unleashed a blitz of policy actions that has shocked the Washington establishment and roiled international relations, including sending stock markets swinging sharply worldwide. Trump is playing tariff roulette and threatening to take control of the Panama Canal, Greenland, Gaza and even Canada, whose border with the US, he says, constitutes an “artificial line of separation.”
At home, the ‘deep state’ hobbled Trump’s first presidency and then concealed the cognitive impairment of his successor Joe Biden until it burst into public view with a ruinous debate performance. Trump’s second-term barrage of domestic policy actions has targeted ‘deep state’ institutions, including the Federal Bureau of Investigation (FBI), Central Intelligence Agency (CIA), Department of Justice, USAID, and the National Intelligence Program.
More fundamentally, Trump is seeking a seismic shift in American governance, including by downsizing the federal bureaucracy to cut waste and fraud. And by introducing significant shifts in US trade policies and foreign relations, he has sought to revitalise America’s economic and military security and arrest its relative decline. As part of that effort, he is seeking to end American entanglement in the armed conflicts in Ukraine and the Middle East.
The speed and scale of the changes introduced by Trump—from freezing foreign aid to imposing tariffs on US allies after calling them leeches on the US economy—is unprecedented in American modern history.
In less than 100 days in office, Trump has upended international rules and the post-World War II, US-led global system, as he seeks to remake patterns of international trade and cooperation, as well as rejigger the world order. He has left the world reeling from his actions, often referred to as the “Trump Revolution”.
Trump’s approach to the world is vividly different from the one he pursued in the first term. His new administration is more nationalistic, more protectionist and more clear-headed about what it seeks to achieve in his second term.
For example, tariffs are front and centre on Trump’s agenda as he seeks to revamp the global trading regime in an effort to secure American advantage.
To be sure, Trump is not the first American president to deploy tariffs as a weapon against trading partners. His predecessors, including Biden, also employed tariffs as a handy tool. Indeed, in the 19th century and the first decades of the 20th century, high tariffs were an American norm with trading partners.
Trump is seeking a seismic shift in American governance, including by downsizing the federal bureaucracy to cut waste and fraud. And by introducing shifts in US trade policies and foreign relations, he has sought to revitalise America’s economic and military security and arrest its relative decline
Through tariffs, Trump is seeking to reverse US deindustrialisation, which resulted from outsourcing manufacturing to China and other countries, devastating America’s industrial heartland. Today, China continues to rapidly accumulate economic and military power as an industrial powerhouse.
Trump’s tariffs seek to beat back the flood of imports and force American companies to invest in domestic production capacity and bring supply chains back to the US. Also, he is deploying tariffs as a negotiating instrument to extract concessions from trading partners. And some of the trading partners have already wilted under his pressure or threats.
Trump’s tariff-related actions are in keeping with what he promised in his inaugural speech. “I will immediately begin the overhaul of our trade system… we will tariff and tax foreign countries to enrich our citizens. For this purpose, we are establishing the External Revenue Service to collect all tariffs, duties and revenues,” he declared, adding that “nothing will stand in our way.”
While some of his tariffs are designed to be a negotiating tool, other tariffs are expected to stay in place as a regular source of revenue for the US—to help cut the trade deficit and balance the budget.
REMAKING THE WORLD
With its profound international impacts, Trump’s second term is reshaping global dynamics. A new world is being ushered in, with little prospect of a return to the world we had before. The policy shifts in Washington are compelling other countries to make necessary adjustments.
A key component of Trump’s agenda is to reshape global trade patterns by punitively employing the tariff instrument. The aim is to reduce reliance on foreign goods and bring manufacturing back to the US. While his administration asserts that the tariffs and other economic measures will encourage domestic investment, American households face potential price increases and income reductions.
While some countries, from India to Britain, have sought to cut trade deals with Washington, other affected nations are responding with retaliatory measures. All this indicates that global economic uncertainty will likely linger.
The fact is that the Trump administration’s focus on what it calls “fair trade” and “reciprocity” has resulted in several developments. One is increased trade tensions and potential tariff wars, threatening to disrupt global supply chains. There is also some movement away from free trade agreements (FTAs) by embracing more protectionist policies. As part of readjustment, some countries are seeking alternative trade partnerships or to strengthen regional trade blocs.
Tensions between the US and Canada following Trump’s threats to annex Canada have altered the Canadian political landscape, including reviving the fortunes of the Liberal Party and helping Mark Carney to succeed Justin Trudeau as Prime Minister
Britain and the European Union (EU), for example, have stepped up efforts to clinch FTAs with India, one of the world’s largest markets and fast-growing economies. The outreach to India explains how Europe is attempting to establish stronger trade ties with the non-Western regions of the world.
The significant impacts from Trump’s policies are forcing Europe to make economic and defence readjustments.
US Vice President JD Vance shocked European leaders by questioning European values and then warning that Europe was at risk of “civilizational suicide”. Europe also received a jarring wake-up call in February from US Defense Secretary Pete Hegseth, who warned that “the US will no longer tolerate an imbalanced relationship which encourages dependency” and that Europe must take “responsibility for its own security” by leading “from the front” so that America prioritises “deterring war with China” in the Indo-Pacific region.
Alluding to the paradox that Europe today confronts, Polish Prime Minister Donald Tusk said recently, “500 million Europeans [are] begging 300 million Americans to defend them against 140 million Russians,” adding that Europe today lacks not economic power but the conviction to be truly a global force.
However, the blunt warning from Washington to cut reliance on the US for European security is forcing Europe’s hand. The EU is encouraging member states to increase their military budgets and issue debt for defence purposes. This shift towards stepped-up militarisation is likely to stimulate European economies, with European defence stocks already surging. For example, two German armament companies, Rheinmetall AG and Thyssenkrupp AG, have seen their share prices double in the first quarter of this year.
Meanwhile, tensions between the US and Canada following Trump’s veiled threats to annex Canada as America’s “51st state” have altered the Canadian political landscape, including reviving the sagging fortunes of the Liberal Party and helping Mark Carney to succeed Justin Trudeau as prime minister. The economic woes from Trump’s protectionist policies, including the new tariffs, have pushed Canada towards political and economic recalibration, underscoring the broader impacts of the “Trump Revolution”.
Trump has also upended US energy policies and international environmental agreements.
Just hours after he was inaugurated, Trump signed an executive order—titled ‘Putting America First in International Environmental Agreements’—that directed immediate US withdrawal from the Paris Agreement and other international climate commitments. And Trump’s new mantra of “drill, baby, drill” demands that more oil and gas be extracted in the US, thus keeping the world hooked on planet-warming fossil fuels. The US withdrawal from combating climate change has heightened concerns about the future among low-lying developing countries that are vulnerable to climate-related disasters.
US Vice President JD Vance said Europe was at risk of ‘civilizational suicide’. Europe received a wake-up call in February from us Defense Secretary Pete Hegseth, who warned that ‘the US will no longer tolerate an imbalanced relationship which encourages dependency’
Meanwhile, the Trump administration’s scepticism towards multilateralism, by impinging on the ability of nations to work together on global issues, could affect efforts to address transnational challenges, provide humanitarian aid and enforce international norms.
Trump’s unilateralism also risks weakening American soft power and diminishing the attractiveness of the US as a global leader. The perception of the US as a reliable partner and defender of international norms has already eroded.
It is apparent that Trump and his team are reviving the interventionist Monroe Doctrine in US relations with the Western Hemisphere. The 19th-century Monroe Doctrine, unveiled by then-President James Monroe, declared the Western Hemisphere a US sphere of influence to the exclusion of other powers. In a first-term speech at the United Nations in 2018, Trump had called the Monroe Doctrine “the formal policy of our country”.
Trump’s ‘Monroe Doctrine 2.0’ today may explain his expansionist itch, including taking back the Panama Canal and buying Greenland from Denmark or just seizing that resource-rich, semi-autonomous territory, located strategically near Arctic waters used by Russia and China.
Asked days before his inauguration whether he would rule out employing coercion to achieve his expansionist goals in Greenland or Canada, Trump had said, “I’m not going to commit to that,” adding, “You might have to do something.” Trudeau, before leaving office, said that Trump was seeking “a total collapse of the Canadian economy because that will make it easier to annex us.”
In his inaugural speech, Trump invoked the notion of “Manifest Destiny” which drove America’s 19th‑century territorial expansion as a God-given right. “The US will once again consider itself a growing nation—one that increases our wealth, expands our territory, builds our cities, raises our expectations, and carries our flag into new and beautiful horizons,” Trump declared in the speech. Trump also praised William McKinley, the president who grabbed the Philippines in the Spanish-American War, saying “McKinley made our country very rich through tariffs and through talent.”
To be sure, Trump is not the first post-World War II US president to pursue American expansion. Almost a quarter million American troops are presently stationed in at least 172 countries and territories because of the global expansion undertaken by his predecessors since the second half of the 1940s. The Biden administration, seeking a military base in the Bay of Bengal, reportedly sought to acquire St Martin’s Island from Bangladesh, a factor that Sheikh Hasina claims contributed to her ouster from power.
The erosion of trust between the US and its allies has been dramatic. For example, Carney, Canada’s new Prime Minister, has declared that ‘the old relationship we had with the United States’ is now ‘over’, while Friedrich Merz, the incoming German Chancellor, has said that his government would seek ‘independence from the USA’
The difference is that, unlike his predecessors, Trump has publicly outlined his expansionist agenda. Trump isn’t scripted, as his freewheeling speeches and news conferences underscore, with his complex personality blending refreshing candour with deliberate combativeness and braggadocio.
Today, the Trump administration is clearly reviving the “spheres of influence” concept, at least in relation to America’s dominance in the Western Hemisphere.
More fundamentally, Trump’s preoccupation with the problem of allies free-riding on American security and exploiting US generosity is having wide-ranging impacts. It is transforming the Transatlantic, Trans-Pacific and US-Canadian Alliances, which have been built on trade interdependencies and close security ties, including American nuclear umbrella protection.
The erosion of trust between the US and its allies has been dramatic. For example, Carney, Canada’s new prime minister, has declared that “the old relationship we had with the United States” is now “over”, while Friedrich Merz, the incoming German chancellor, has said that his government would seek “independence from the USA.” French President Emmanuel Macron, meanwhile, has signalled that France could extend its small nuclear umbrella over Europe because the US may no longer be relied upon. Trump, for his part, has said that the EU was formed “to screw” the US.
The split in the Western camp has been reinforced by fundamental differences between the Trump administration and many European states over the Ukraine war, especially Washington’s efforts to normalise relations with Russia in an effort to end the US-Russian proxy war in Ukraine.
The present divergence in the official US and European perspectives on the war is rooted partly in the fact that, for America, China is the main threat while much of Europe views adjacent Russia, not distant China, as its primary threat. Seen through the European lens, the Chinese threat is somewhat alleviated by Russia’s location between Europe and China. (The majority of Russians actually live in the European part of Russia that makes up almost one-quarter of the country’s total area.)
Biden, while deepening US involvement in the Ukraine war, acknowledged in his national security strategy that China, with its resolve and capability to surpass the US as the foremost world power, is America’s primary challenger. Trump, meanwhile, has portrayed his effort to end “the savage conflict in Ukraine” in altruistic terms—for the good of the world—but, in reality, he is seeking to cut America’s losses and prioritise the China challenge.
CHINA IS THE MAIN TARGET
Trump’s administration is seeking to shift US strategic focus from Europe to the Indo-Pacific, the world’s economic and geopolitical hub where America’s global pre-eminence is at stake. Ending the Ukraine war would free US military resources for the Indo-Pacific, particularly from Europe, where over 100,000 American troops remain stationed. The war, far from advancing the US objective to degrade Russia’s military power and derail its economy through unprecedented sanctions and military aid to Ukraine, is distracting Washington from more pressing challenges and promoting an unholy Sino-Russian alliance against America.
America’s status as the world’s preeminent power is under increasing challenge not from Russia, whose revanchist ambitions are largely confined to what it calls its “near abroad” (or the former Soviet space), but from a globally ascendant China. In this light, extricating the US from the Ukraine war and prioritising deterrence against Beijing makes strategic sense.
Today, the Trump administration is working to reorient the US military architecture towards the Indo-Pacific to prepare for and win a potential war with China, including deterring a Chinese attack on Taiwan, according to the leaked ‘Interim National Defense Strategic Guidance’ signed by Hegseth.
“China is the [Defense] Department’s sole pacing threat, and denial of a Chinese <fait accompli> seizure of Taiwan—while simultaneously defending the U.S. homeland is the Department’s sole pacing scenario,” Hegseth wrote in the guidance. In planning contingencies for a major power war, the US, according to the guidance, will consider conflict only with China, while leaving the Russia threat largely to European allies to address.
America’s status as the world’s preeminent power is under increasing challenge not from Russia, whose revanchist ambitions are largely confined to what it calls its ‘near abroad’, but from a globally ascendant China. In this light, extricating the US from the Ukraine war and prioritising deterrence against Beijing makes strategic sense
Trump, in his first term, reversed the 45-year US rapprochement with Beijing by identifying China in his national security strategy as an adversary and initiating a trade war with it by imposing tariffs on Chinese goods. This marked a significant shift towards a more confrontational approach.
Now, in his second term, Trump’s policies are increasingly focused on countering China. The new rounds of tariffs imposed since February reflect this shift, as does his emphasis on ending the Ukraine war in order for the US to pivot to the Indo-Pacific.
A recent Trump-signed memorandum on America’s investment policy was more about the China threat than about anything else. Singling out the People’s Republic of China (PRC) as a foreign adversary directing investments in American companies to obtain cutting-edge technologies, it said that “PRC-affiliated investors are targeting the crown jewels of US technology, food supplies, farmland, minerals, natural resources, ports and shipping terminals.” The memorandum has proposed imposing several economic restrictions—from stopping US companies and investors from investing in industries that advance Beijing’s military-civil fusion strategy to preventing “PRC-affiliated persons from buying up critical American businesses and assets.”
Trump has repeatedly described himself as a dealmaker, and he appears open to cutting deals with Beijing that would help reduce China’s huge trade surplus with America. His approach to China will be very different from Biden’s Cold War-style Russia policy. Trump is likely to seek to limit the influence and power of China without resorting to open hostility.
Instead of broad sanctions, Trump will likely deploy targeted economic restrictions, thus permitting continued engagement with Beijing in less sensitive areas while still applying pressure where needed.
Leveraging tariffs and trade policies to disrupt China’s export-driven economy could compel Beijing to negotiate on fairer terms or risk shrinking market access. Trump could also incentivise American companies to reshore manufacturing through tax breaks or subsidies, further weakening China’s role as the world’s factory.
The Trump administration has begun tightening controls on technology and capital flows to China. Such curbs could hinder Beijing’s ability to innovate in key industries. Washington has also proposed greater scrutiny of Chinese investments in US technology sectors to limit China’s access to American intellectual property.
The American military posture in the Indo-Pacific, for its part, is likely to be defined by deterrence, not provocation. Strengthening US alliances in the Indo-Pacific, especially with India, Japan and Australia, would create a formidable counterbalance to Chinese expansion through geopolitical encirclement.
In conclusion, the consequences of the ‘Trump Revolution’ are still unfolding, but many countries are beginning to reassess their strategic and economic positions.
Trump’s dramatic reorientation of US foreign policy, with its maelstrom of actions and responses, including recriminations and alienation, is having significant international impacts. This is apparent from the emerging shifts in global trade, geopolitical alignments, defence strategies, and environmental commitments. The impacts are being accentuated by Trump’s rejection of both the logic of multilateralism and any self-restraints on the exercise of American power.
Nations worldwide today are navigating the developments unleashed by the ‘Trump Revolution’, seeking to readjust their policies and strategies in response to the changing geopolitical and geo-economic landscape.
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