After winning the 2024 U.S. presidential election, the second Trump Administration is poised to be more prepared, powerful and agile than the first. Having learned from his initial term and supported by a Republican-led Senate and House of Representatives, Trump will navigate the political landscape with greater acumen and fewer constraints.
Hallmarks of Trump II
The second Trump Administration will be characterized by protectionism, economic nationalism and the “America First” philosophy. Expect unilateral actions on tariffs, immigration and taxes, along with deregulation and policies that favor American businesses. There will be an increased use of executive power over government institutions, with people loyal to President Trump and aligned with his populist vision driving policy.
New World Order for Business
Companies will need to aggressively negotiate for their interests in a global environment ripe for bold and unconventional deal-making. Businesses will benefit from tax cuts and deregulation, with anticipated regulatory rollbacks and a softening of anti-trust reviews welcomed by many corporations. Onshoring may overtake friend-shoring and balancing conflicting shareholder interests, stakeholder expectations and geopolitical sensitivities will become a constant challenge for corporate leaders.
Six Global Policy Paradigms
We have identified six policy areas that are particularly relevant for global businesses. These paradigms reflect a commitment to prioritizing American interests in various domains, from trade and defense to technology and climate policy:
1. Trade: The most pressing question on Trump’s trade agenda is the extent to which he will follow his campaign promise of imposing debilitating tariffs versus dropping them in return for concessions. Tariffs on $3 trillion in imports could decrease GDP by 0.8%, spurring inflation and increasing consumer costs.
2. Defense: The second Trump Administration will aim to prioritize American military strength while introducing elements of unpredictability on the global stage. Immediate defense priorities include achieving a swift deal to end the conflict in Ukraine, further increases in U.S. defense spending, reassessing U.S. military partnerships based on transactional interests and broadening alliances that benefit U.S. defense industry interests.
3. Tech and AI: The Trump Administration’s global approach to technology and AI is expected to focus on advancing national security interests. Additionally, it may support a more freewheeling domestic AI industry, giving benefits to players aligning with his agenda. And it will undoubtedly focus on bringing tech manufacturing to the United States.
4. Climate and Energy: President-elect Trump is openly antagonistic toward climate action, emphasizing “American energy dominance.” Anticipated actions include re-withdrawing the United States from the Paris Agreement, increasing domestic fossil fuel production, rolling back regulations and dismantling the Biden Administration’s climate policies. These approaches could strain relations with allies committed to climate action and lead to higher global greenhouse gas emissions.
5. Food and Agriculture: The Trump Administration is expected to prioritize the economic and trade interests of U.S. farmers. Anticipated actions include passing a new Farm Bill, extending tax cuts, focusing on food security and farm productivity over environmental concerns and weakening regulatory oversight of the EPA, USDA and FDA.
6. Global Health: The incoming Trump Administration will look to revise the Affordable Care Act, lower costs, restructure public health agencies like the CDC and NIH, potentially restrict federal funding for gender-affirming care and limit access to abortion medications. Lowering prescription drug prices will continue from the Biden Administration.
Global Reactions
The global community is bracing for significant shifts in U.S. foreign policy under the second Trump Administration. Allies and adversaries alike are preparing for a more unilateral and transactional approach from Washington, which will likely reshape international relations and economic dynamics. Here’s a look at how different regions might respond:
- China: Trump plans to adopt a unilateral approach toward China, targeting economic imbalances in the U.S.-China relationship.
- Asia Pacific: The Trump Administration may apply tariffs and also extend some exemptions to allied U.S. trading partners, such as Japan and South Korea and countries aligning with the United States against China.
- MENA: Trump is likely to adopt a more transactional approach to the Israeli-Palestinian conflict, pressing for concrete gestures as part of a broader strategy to advance normalization with Saudi Arabia.
- Europe: The Trump Administration threat to apply 10-20% across-the-board tariffs on EU exports would be met with retaliatory measures from the EU as well as the use of the new anti-coercion mechanism.
- Ukraine and Russia: The Trump Administration is likely to alter U.S. policy towards Russia and Ukraine, favoring a peace deal that gives recognition to Kremlin interests and potentially reduces U.S. support for Ukraine.
- Latin America and the Caribbean: The Trump Administration will prioritize combating illegal immigration “from day one” and has promised to embark on a program of mass deportations for undocumented individuals in the United States.
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