Playing the Trump card

WHEN US President Joe Biden met the former and soon again-to-be president Donald Trump, he promised a transition that would see his team do “everything we can to make sure you’re accommodated”. This seems to be the stance not only of the outgoing administration but everyone.

Foreign governments from China to Mexico and Canada, as well as in Europe, have already begun gearing up for and accommodating Trump preferences and likely initiatives – whether on tariffs, fentanyl or defence spending. The thinking about the ongoing wars in Ukraine and the Middle East has turned now to ceasefires and possible settlements. While economists warn about possible Trump policies triggering inflation and a return to higher interest rates, the markets have been surging.

Trump’s inauguration ceremony will take place only on Jan 20 next year. But for almost all intents and purposes, the current administration is already in the rearview mirror, and all are trying to anticipate a Trump-centric future.

This is not without reason. Remember that on the first day of the first Trump presidency, he tore up the Trans-Pacific Partnership. Higher tariffs on China soon followed, and then he strengthened trade relations with neighbours Mexico and Canada. Things moved fast.

As Trump II approaches, the incoming president has already announced he would slap tariffs on those three countries – China, Canada and Mexico – on his first day in office. Things are moving fast and in ways that cannot be easily predicted.

Great again (and now)

What is clear is that the aim to Make America Great Again is more than an acronym and slogan. The Republican Party is now dominated by MAGA acolytes, with few “old style” centrists. The Republicans, moreover, enjoy majorities in both the Senate and the House of Representatives.

The incoming Republican Senate leader, John Thune, has publicly stated that he is willing to push back on issues such as federal spending. But even back in 2016, most Republican legislative leaders capitulated and, in the present mood, internal friction against Trump’s agenda will be low to zero.

Next, consider Trump’s personnel picks – from vice-president JD Vance, and now the Cabinet. Trump has eschewed established Washington DC Beltway names, and has picked candidates who, instead, may seem relatively unqualified and in some cases, even wholly unsuitable. The Senate has yet to confirm the nominations, and some names may be hindered.

But in the wake of a clear win, no political body or individual politician can risk obstructing all of Trump’s choices. Moreover, the selections are not a mistake but a method. By choosing loyalists to himself and to the MAGA cause, Trump ensures that the Cabinet is aligned to what he wants and prepared to make sweeping change.

Is there anything that might thwart the Trump agenda?

Not the Supreme Court, where there is a majority of conservative judges, including a number who were appointed during his first term. There have been past legal challenges and prosecutions, and resistance from the military and intelligence community – many past national security advisers, including those who served under Trump I, have openly opposed him, with some drawing comparisons to Hitler.

But Trump loyalists are being nominated to head these agencies and ensure they align. Some commentators see this as being motivated by revenge. Maybe, but it is equally a pre-emptive strike against these institutions.

The Democratic Party, losing by much wider margins than projected, has yet to regroup under viable leadership and the mood for now seems something between despondence and self-flagellation. For the present, Trump seems to hold all the cards.

Looking ahead to the mid-term elections of 2026, some predict a shift, especially in the House of Representatives where the Republicans hold only a slim majority. The former Republican speaker of the House, Paul Ryan, suggests that Trump’s grip is temporary. But temporary can be a long enough time, especially as Trump will almost certainly double down and move quickly.

The changes aim to make large-scale impacts. Trump, never modest, intends that his second and final term as president should be of the greatest consequence, a historic landmark in changing politics. Surviving an assassination attempt (there was an apparent second bid on his life two months later) may indeed make for messianic zeal.

Ways of managing

Can anything constrain Trump?

Perhaps the biggest factor will be from the markets. Take the expected initiative to impose high tariffs on China and other trade partners. Trump is serious about this and about bringing manufacturing jobs back into the US. Arguments about the benefits of globalisation have no suasion, nor do theoretical models that show how high tariffs will rebound on the US economy.

But Trump disparaged Biden’s economic policies and “runaway inflation”, and wants very much for Americans to feel that he is putting the economy on the right path and delivering benefits to them. He will not be blind to effects on market and consumer confidence.

Holding these different goals, the real restraint on Trump’s initiatives will not be political but market-driven. The tangled tale of his choice for Treasury secretary shows this, with his eventual pick – Scott Bessent – buoying market confidence.

If and when Trump’s initiatives on tariffs or migrant workers and other matters conflict with delivering a feel-good economy, expect him to take note and pull back. After all, the man has never been held to the strict letter of every word of every statement or tweet he’s made.

So don’t expect a steady and consistent voice, or the checks and balances that are usual for American democracy. Expect action, fast and thick, at the speed of a tweet. In the upcoming Trump II days, what could emerge is not only politics that matters to business, but also a showcasing of how business and markets matter to politics.

The writer is chairman of the Singapore Institute of International Affairs