The first 100 days of Trump’s second presidency have ushered in historic shifts. The Trump 2.0 administration is not a rerun of his first term; instead, it represents a total recalibration of American power on the global stage. The United States is charting a course focused on exuding economic might and leveraging its position to fortify national strength. This approach has become the new fungible currency of international relations.
Whilst this model is reminiscent of 19th- and 20th-century power dynamics, it has left many in the business and political worlds navigating uncharted waters. Long-standing principles such as globalisation, free trade and reciprocity are being upended, replaced by tariffs and brute economic forces as the Trump administration’s primary tool of influence. Here, old friendships or alliances offer little protection.
A Fractured Global Economy
As a result, global investor and consumer confidence have been shaken, as businesses and governments grapple with an increasingly fragmented global economy. New trade blocs are taking shape from the deepening of the Regional Comprehensive Economic Partnership (RCEP) through considerations of a Korea-China-Japan FTA to the solidification of intra-EU trade. Mistrust among nations is growing. And the costs of commerce are rising. At the same time, cascading vulnerabilities—from regional conflicts to the escalating impacts of climate change—are compounding the strain and posing amplified risks to businesses and states alike.
For many, the outlook appears grim. Corporate boards, particularly those reliant on the principles of the post-War economic and international order, are feeling the pressure. Yet, despite the uncertainty, opportunities are emerging. Businesses that embrace agile and adaptable supply chains and licences to operate in various markets will find ways to thrive in this shifting landscape. Likewise, political leaders that seize opportunities to engage with new allies, or create new international partnerships, can be rewarded.
A Door Closes, a Window Opens
On 2 April, dubbed “Liberation Day” by the Trump administration, the announcement of sweeping tariffs on 135 U.S. trading partners sent shockwaves through global markets. The message was clear: Dependence on the United States is no longer a given for global trade partners.
While this upheaval has deepened mistrust between the United States and its largest and oldest trading partners, it has also opened the door to new trade corridors and markets. Major blocs, including the EU and MERCOSUR, are establishing FTAs that could enhance global commerce, whilst major economies such as China, Japan and South Korea and Canada and the EU are eying pacts to address trade threats from the United States as concerns loom. These shifts present an opportunity for businesses to tap into emerging markets, forge new alliances and position themselves as leaders in this evolving trade environment.
From Partnerships to Independence
As old alliances falter, new regional blocs are gaining strength, making strange economic bedfellows. Nowhere is this more evident than in Europe. The EU, long reliant on its transatlantic partnership with the United States, is accelerating efforts to assert its independence and strategic autonomy. This trend, which began during Trump’s first term, has been catalysed by Trump 2.0’s policies, with the administration continuing to underscore its belief that Europe in its current form is “pathetic.”
In response, the EU is undergoing a transformation, seen particularly in the defence sector. The new ReArm Europe initiative, with a projected budget of €800 billion, is revitalising European defence industries and potentially reducing its reliance on American defence suppliers. This renaissance in European innovation is not limited to defence, however; it is fostering a broader wave of economic and technological self-reliance. Businesses, particularly those in Europe, are poised to be the primary beneficiaries of this new wave of publicly backed innovation, as the EU seeks to bolster its competitive base.
Aimed at establishing itself as a “safe haven” against market uncertainty spurred by the Trump administration, the EU is further complementing this historic transformation by signalling it will act as a safe, reliable, and stable partner that is backed by the rule of law. All of these things are now weaker in the United States yet needed for long-term business planning and investment.
The Upside of Deregulation
Despite its aggressive trade stance, the Trump 2.0 administration continues to operate under the belief it follows a pro-business agenda. Mirroring this, Trump’s approach to deregulation, supported by influential “tech-bro oligarch donors,” continues to diverge from the EU’s more regulation-heavy philosophy. Acts of deregulation and the close proximity of large tech donors to White House dealings—including in positions of power—seem emblematic of this understanding.
As tariff policies grow increasingly unpopular, the new administration will continue to engage with businesses on regulatory issues to offer opportunities. New executive orders focused on repealing “unlawful regulations” and “reducing anti-competitive barriers,” as well as tariff exemptions for major U.S. firms and tech businesses, reflect this logic.
These potentially looser regulatory frameworks will likely impact innovation across multiple industries, such as tech, health care, finance, transportation and logistics, creating a new testing bed for innovation. However, possible benefits are being counteracted by cuts to federal funding of technology and health institutes and attacks on higher education—all of which make the United States a less attractive place to pursue high-level research.
National concerns over critical technologies will further fuel these efforts in the race for competitiveness. Trump has already debuted ambitions like the $500 billion Stargate initiative to transform the United States’ artificial intelligence infrastructure and the Golden Dome, an effort to jumpstart a Manhattan Project scale mission to bolster U.S. missile defence. As concerns grow, the administration may continue to tap into federal-private partnerships to further grow the U.S. industry base.
Thriving in Uncertainty
The Trump 2.0 era is reshaping the rules of global commerce, presenting both challenges and opportunities for businesses. Companies that are nimble, strategic and forward-thinking can leverage this disruption to innovate and adapt. To thrive, these businesses must proactively engage with governments, anticipate changes in the political landscape and secure necessary licences to operate in various markets. In doing so, companies can position themselves to navigate uncertainty effectively and harness new opportunities.
