THE WORLD HOLDS ITS BREATH AS TRUMP 2.0 BECOMES A REALITY

As the world learned from Trump 1.0, the only predictable thing about Donald Trump is his unpredictability.

LONDON: Tomorrow starts the open season of political vandalism in the United States as Donald Trump assumes office as President for the second time. The so-called “deep state”is in line to be gutted, following Trump’s announced intention to purge the federal bureaucracy and administrative state of professional civil servants, who he believes were behind politically motivated attacks on him. These will be replaced by Trump loyalists, battle-hardened people who not only adore him, but also know how to wield the levers of bureaucratic control. Trump 2.0 will stretch the norms of Washington to their breaking point and ensure that not only willthe power ministries be used to shield him and his allies from accountability, but they will simultaneously be used to intimidate and persecute anyone who dares to criticise him. His “America First” policy will accelerate the country’s abdication of the role of champion of free trade and the defender of global values.

Although Trump repeatedly disavowed the infamous 900-page Project 2025 over a backlash of some of its more radical proposals, many believe that this publication by the Heritage Foundation, one of Washington’s most prominent right-wing think tanks, will be the blueprint for Trump’s four years in office. More than 100 conservative organisations contributed to the document, including many that will now be hugely influential in Washington. Watch out for the four main policy aims as the new administration takes office: “restore the family as the centrepiece of American life; dismantle the administrative state; defend the nation’s sovereignty and borders; and secure God-given rights to live freely”.While fewwould criticise three of these, the idea of dismantling the administrative state is causing deep concern among those US citizens who believe in American democracy.
Project 2025 proposes that the entire federal bureaucracy, including independent agencies such as the Department of Justice (DOJ), be placed under direct presidential control. The job protection of thousands of government employees will be eliminated, leaving them exposed to being replaced by political employees. If Trump takes charge of the DOJ, many will see it as his revenge for the Department daring to declare him a convicted felon. This resulted from a jury finding Trump guilty of falsifying documents in his hush-money payment to porn actor, Stormy Daniels, who claimed the two had sex. The Federal Bureau of Investigations, FBI, is also in the sights of Project 2025, which described the Bureau as “a bloated, arrogant, increasingly lawless organisation”. Trump will almost certainly order the overhaul of the agency along with several others, including the complete elimination of the Department of Education.

Trump is arriving at the White House more experienced and better organised than in 2017, emboldened by the scale of his 2024 electoral triumph and the firm support of a unified Republican party. The populist J D Vancewill is his vice president instead of the evangelist Mike Pence. The Supreme Court will have a 6-3 conservative majority, three of whom he appointed in his first term. And most importantly, Trump will have the growing influence of Elon Musk’s Twitter/X and populist podcasts to help him advance his agenda and maintain his narrative throughout his second term. Already, Trump has rewarded Musk, the planet’s richest person and arguably its most powerful private citizen, by allowing him to join in calls and meetings with global leaders and technological rivals.
The unelected Musk will delight his master as he slashes “government inefficiency” and wields his powers to effectively veto legislation. Having noted that the “rules of the game” are changing under Trump, a succession of CEOs have already made the ritual pilgrimage to Mar-a-Lago, offering multi-million dollar contributions to Trump’s inaugural fund in the expectation of having to “pay-to-play” under Trump.

Donald Trump is returning to the White House with the US economy in strong shape. Inflation is on track to return to the 2 percent target of the Federal Reserve, unemployment remains low at about 4 percent and GDP growth above pre-pandemic levels at 3.1 percent. But alarm bells are ringing. If Trump carries out his promises to hike tariffs, which he calls “the greatest thing ever invented”, in order to reduce the US trade deficit and correct “unfair” competition, many economists believe that America’s economy will suffer. During his election campaign, Trump threatened a whopping 60 percent blanket tariff on all Chinese imports. Even if this is reduced to 50-60 percent on only some goods, with an overall increase across the board of 25 percent on all other Chinese imports, Beijing will inevitably retaliate by first raising tariffs on all US imports and then targeting US dependencies on critical minerals and supply chains. This will turn out to be a disaster for America, with consumers and businesses paying the price. US inflation will rise as will interest rates, the dollar will strengthen making US exports less competitive as trade between the two countries becomes uncoupled. Already Chinese trade officials reported in December a surge to record levels of exports to the US and Europe as traders stockpiled shipments of Chinese goods in anticipation of a trade war between the world’s economic superpowers.

And then there’s the issue of immigration and its effect on the US economy. In the lead-up to the election, Donald Trump banged on relentlessly about immigration, especially that across the US’s southern border, promising to not only make it difficult for would-be immigrants to make the trip, but also promising to bolster funding for enforcement agencies to conduct mass deportations of undocumented migrants already in the country. By putting two committed immigration hawks in charge of the process, the US Immigration Service Department could well deport up to a million immigrants this year and upward of 5 million over the course of Trump’s rule.

While satisfying public demand, mass deportation and reduced illegal immigration will inevitably shrink the US workforce, drive up wages and consumer prices, and in all probability lower the productive capacity of the country.

The most likely areas of the economy affected would be those most dependent on migrant labour, such as agriculture, hospitality, and construction. Economists are warning that as the undocumented immigrants pay billions in local, federal and state taxes, as well as contributing to Social Security and Medicare, mass deportation will not only widen the federal deficit, but also hurt the growth in demand. If you add to this Trump’s pledge to cut taxes, calculated to create an economic stimulus of about $8-10 trillion, the net result will inevitablybe increased inflationary pressures, a slow-down in the pace of Fed interest-rate cutting, and a much reduced economic growth. The long term economic implications of Trump’s domestic and international governance, however, could be a lot more serious – a severe loss of confidence in US governance.

In his victory speech after his stunning electoral victory last November, Donald Trump vowed he would “govern by a simple motto: promises made, promises kept. We’re going to keep our promises”. One particular promise he made during the election campaign, which will dismay millions around the world, was to cut environmental regulations, vowing to increase production of US fossil fuels – “drill, baby, drill” – on day one. Arguing that climate change is a hoax, even while Los Angeles is on fire, Trump wants to open up areas such as the Arctic wilderness to oil drilling, which he argues would lower energy costs.
As president-elect, Trump has refused to rule out the idea of military force to seize Greenland – an autonomous territory of NATO ally Denmark, as well as the Panama Canal, the vital waterway which the United States handed over 25 years ago. Trump has also taunted NATO ally and long-friendly neighbour Canada, suggesting that it should become the 51st state of America – or face tariffs – his favourite tool to pressure both friend and foe.

True to form, Donald Trump has already thrust himself to the front of the world stage, shattering diplomatic niceties even before returning to the White House tomorrow. He has demonstrated yet again his capability of jaw-dropping statements, an approach that has rattled allies, while pleasing his supporters, who see this as a way to force results.Only time will tell how much of what he has said is bluff and how much he will carry out during Trump 2.0. As the world learned from Trump 1.0, the only predictable thing about Donald Trump is his unpredictability.

John Dobson is a former British diplomat, who also worked in UK Prime Minister John Major’s office between 1995 and 1998. He is currently a visiting fellow at the University of Plymouth.