2025 In Review: Geopolitics: 100 Days of Greatness: The Decline of an Idea

 IF ONE HAD to sum up America’s rollercoaster year, the period between April 2 and December 4 says it all. On the first date, Donald Trump in his second avatar unleashed tariffs on virtually all trading part­ners as well as barren islands. This was the so-called ‘Liberation Day’, the day the world would stop “suck­ering” the US through “unfair trade”. The second date marked the release of the US’ National Security Strat­egy (NSS), with its Trumpian stamp.

Between those two events came multiple flip flops against China. From high tariffs announced on Liberation Day, but not announced, to the meeting with President Xi Jinping in South Korea on October 30, Trump could not persuade China for a “fair trade deal”. All he could do was sell some extra bushels of soybean and, by the end of the year, lift the ban on the sale of Nvidia chips powering Beijing’s march to an Artificial Intelli­gence (AI) superpower.

In between came sanctions on India, a country that had as­siduously built relations with the US over the past two decades. This has, effectively, ended any endearment that Indians or India had for the US. But even here, the flip flops were evident. In his public pronouncements, Trump has snubbed India and its leaders multiple times. But in a longer, secret, version of the NSS, reviewed by some reporters, Trump wants to allegedly pursue the idea of a new grouping of countries, the ‘Core 5’ or C5, instead of the old club of G7. India, along with Japan, China, Russia and the US, will be part of the new group, if and when it sees the light of day. The idea of US primacy, more fashionably labelled as hegemony, has been given a quiet burial. Unnecessary needling of China is out even as the transatlantic partnership, the lynchpin of the post-1945 world order, comes under tremendous strain.

When the year began, with Trump’s inauguration as US presi­dent for the second time, the world braced itself for some turbu­lence on the trade front. By April, this had turned into a frontal assault on the global trading system. By the end of the year, there is a question mark over American support for Ukraine. In the midst of all this, Europe has begun firming up plans to rearm.

It would be hard to find a year when a great power executed so many somersaults in such a short span of time. Never has the US, the country that ordered the world system for 80 years since the end of World War II, seemed so bereft of strategic thinking. Domestically, too, the US finds itself in turmoil with political po­larisation not abating after a high-pitched campaign. The pursuit of illegal immigrants has now turned into an open witch hunt across states marked by intense political divisions.

How this emerging situation is viewed is also fragmented. In the US, liberal opinion considers Trump’s actions as paving the way for Chinese hegemony and raising the probability of Rus­sia’s victory in Ukraine. India, never high in US calculations, is considered to be collateral damage from Trump’s wanton actions.

Globally, the US is no longer considered a trustworthy partner but as a country that one avoids needling if only for the military menace it poses to those who question it. In the Global South—a term Trump and most American strategists disparage—the pre­ferred alternative to American or Chinese hegemony is a multilat­eral order where middle powers—Brazil and India among others— find space to grow economically while preserving their freedom. Trump and his cohorts, of course, dismiss this idea wholly.

The trouble for Trump and his brand of American national­ism (which has roots in the ideas of Andrew Jackson, the seventh president of the US from 1829 to 1837) is that the US is not in the pink of economic health. Over the past 35 years, it has lost out to countries like China. In innovation, economic growth and macro­economic management, the US finds itself in a tough spot. Trump blames the “globalist elite” for the woes of his country. But the march downwards began a while before the US became a peerless power in the last decade of the 20th century. It is a counterfactual question as to what Trump would have done if the US had the economic heft it did before the multiple crises of the past 25 years. The answer, even if it is in the realm of speculation, is that it would not be pretty. But the US is no longer that country and Trump, his waywardness and wishes notwithstanding, cannot do much. But 2025 was a year of great uncertainty.

THE CONTOURS OF descent, so visible under Trump, had a much longer gestation period, spanning decades. It is a story of how the US failed in using the chance given to it to reshape the world order in a lasting fashion to its advantage. The last time a great power had such an opportunity was in the 19th century when Britain lorded over an empire. The American imperium, shorn of a peer, had a much shorter shelf life. If one dates its existence, the start would certainly be December 25, 1991, the day Mikhail Gorbachev resigned as leader of the Soviet Union. The end of the Cold War was in sight some years earlier when Gorbachev signed on the dotted line in Washington DC on December 8, 1987, leading to the Intermediate Range Nuclear Forces Treaty.

 Then came the “unipolar moment” when in 1991 the colum­nist Charles Krauthammer boasted, “The immediate post-Cold War world is not multipolar. It is unipolar. The Center of the world power is the unchallenged superpower, the United States, attended by its Western allies.” That world lasted more than 30 years. It is questionable if it left the US in better shape than in 1991.

The US is now a highly unequal country, measured by any sta­tistic. In 2024, the highest quintile had 52.2 per cent of aggregate income while the bottom three quintiles had less than half of that. The last quintile—the bottom 20 per cent—had an aggregate in­come share of just 3.1 per cent. Median real personal income has grown from $27,010 in 1980 to $45,140 in 2024, a 67 per cent increase over 44 years or by about 1.5 percentage points every year. The av­erage income of the 1.5 million households in the top 1 per cent is incomparably higher at $731,492, while the median income (not adjusting for inflation) was $83,730. Little wonder the Gini Coef­ficient has kept its steady upward march in the US all these decades.

While the political unipolar moment, when the US remained unchallenged, lasted more than 30 years, the ‘economic unipolar moment’, when the US called the shots, was much shorter. The apotheosis of that moment can roughly be dated to the year 2000 when Michael Mussa, one of the longest-serving chief economists of the International Monetary Front (IMF), spoke at the Jackson Hole conference that year, extolling the virtues of global integra­tion and the economic forces impelling the world to becoming one seamless entity. Four years later, in 2004, Paul Samuelson, one of the most influential economists of the 20th century, warned against the dangers of runaway globalisation to the US. In a famous paper in the Journal of Economic Perspectives that year, he showed how productivity gains by China in a single sector— where the US had comparative advantage earlier—would lead to permanent loss in per capita income, that is, jobs. This was a remarkable u-turn for a Nobel-prize winning economist who had spent his life explaining how free markets and trade led to gains for everyone. Truth be told, Samuelson had for long harboured doubts on this score. Two year after winning the Nobel in 1970, he delivered a lecture titled ‘International Trade for a Rich Country’. For the first time, he outlined the pessimist’s case for the emer­gence of “winners and losers” from international trade. His hope at that time was: “Displaced workers can be given jobs in public employment; or, as budget deficits lower overall thrift, they can find jobs in expanded output of those few lines in which we do still have comparative advantage.” This was the classic Keynesian remedy of the time. As long as the US imports stayed in the vicin­ity of 5 per cent of its Gross National Product (GNP), that would not affect more than a couple of points of growth.

Today, in contrast US imports amount to 14 per cent of its GDP (2024), deficits have ballooned, debt has soared and growth has stalled. The well-paying industrial jobs, the mainstay of Ameri­can prosperity, have long disappeared and no one bothers about laid-off workers or Keynesian nostrums for that matter. In many ways, Samuelson, the neoclassical economist, had warned against runaway globalisation even if he did not make that point stark.

Trump of vintage 2024 contra 2016, wants to fix these problems. But these are almost im­possible challenges to meet in a span of four years. All that can be done is to hand over some cheques to Americans even as workers and erst­while members of the middle class in the coun­try pursue a nativist strategy for the remaining jobs and work. The ledger at the end of the first year of Trump’s second presidency is racism at home, antagonism with partner countries abroad, and the miasma of corruption around the First Family.

The contradictions of what Trump wants to achieve were best summed up by commenta­tor John Ganz in the updated edition of When the Clock Broke (2025), his study of American political and cultural life: “On the one hand, there’s a conception of the party as a national populist movement on behalf of the Middle American working class led by a Caesarist president to smash the power of the ‘globalist’ professional and managerial elite and, on the other, a radical libertarian project of admin­istrative state demolition behind a populist façade.” Ganz concluded by saying it is yet to be seen how stable this coalition would be and if these goals are compatible at all.

Even if one tries very hard to interpret events between Liberation Day and the permission to sell Nvidia chips to China again, they cannot be described by the word strategy. In truth, there is no strategy at all in Trump’s actions. There are, of course, tendencies that are ‘encouraged’ to keep his restive base in check. The bile and racist attacks against Indian immigrants are one ex­ample. The military attack on Venezuelan boats is another. The latter makes an excellent political point—Trump is doing something about checking the flow of drugs into the US, even if it is suspect factually. Then there are attacks on indepen­dent institutions like the US Federal Reserve, something that will inflame inflationary pressures. If that comes to pass, Trumpism may face its first real challenge.

There, obviously, cannot be a coherent strategy if one dis­mantles the struts that have held America’s power and global pre-eminence in place for 80 years. If that were not enough, the in­ability to coherently think through the challenge posed by China has made it even more difficult to prevent America’s political and economic decline. China is now a near-peer to the US. Militarily, China’s moves in East Asia and Western Pacific are now an open challenge to the US. If China decides to invade Taiwan at some point in the coming years, one cannot be sure if the US will do anything about it. A short-sighted Trump can cut his losses and let China do what it wants, but that will be the end of American power as the world knows it. That cannot be ruled out anymore.