Trump 2.0: the stage of moving fast and breaking things

A YEAR ago, we speculated the incoming Trump administration’s approach to policymaking in his second term would focus on “moving fast and breaking things”, drawing from Meta chief executive Mark Zuckerberg’s unofficial motto for Silicon Valley.

Indeed, in less than a year, Trump-driven policy shifts have dramatically altered the global landscape, eschewing historical status quos across global trade policy via tariffs, defence spending burdens (in Europe and Japan), and even regional geopolitical conflicts.

Meanwhile, they have provided sources for much of the volatility investors have experienced in global markets in the first year of his second term in office.

Recall in 2017, after being elected to America’s highest office, America’s 45th president was domestically focused, seeking to and succeeding in passing the Tax Cut and Jobs Act, America’s most significant reform of its tax code since the 1980s.

However, for most around the world, US President Donald Trump’s signature imprint on the global economy only came in the second year, when his trade war with China unofficially kicked off in early 2018, highlighting the pivot from domestic to global as the calendar flipped in Trump 1.0.

Just as in his first term, investors may see the global focus of Trump 2.0 shift – this time, perhaps closer to home, we suspect.

While most around the world look back at the “Liberation Day” tariff announcements and subsequent negotiations as all encompassing in nature, the developments left out two of America’s largest trading partners, Canada and Mexico.

Indeed, America’s focus should shift quickly back to trade across its land borders as the US-Mexico-Canada Agreement struck under Trump 1.0 is subject to its first joint review by July 2026.

Despite the headline conflicts especially between the US and Canada throughout 2025, effective tariff rates for Mexico and Canada and the US remain at less than 5 per cent – well below US baseline tariffs for the UK, Japan and the European Union at 10 to 15 per cent.

Thus, the US is likely constrained in terms of where tariffs on these nations with which they share a land border ultimately settle, while still maintaining North America as a preferred trade area for the largest economy in the world.

As a result, the contentious points of negotiation may instead focus on key non-trade US national security priorities. As seen in the recent Vietnam, Malaysia and Cambodia trade agreements, rules of origin, investment and transhipment rules will likely be a top American priority in the trilateral discussions.

Should Americans push aggressively to put a harder border around North America – for not only China goods, but also investments – the US-Mexico-Canada negotiations may rekindle tension and the weaponisation of trade across the US-China trade relationship, as the US seeks to finalise its vision for the structure of trade.

Just as the global trade narrative should begin moving closer to the American mainland in 2026, domestic developments within the US should likewise become more important for global investors.

The US Supreme Court should be on the radar in early 2026.

This is not a typical area of focus for global investors.

Most may assume this is due to the upcoming ruling on the constitutionality of the Trump reciprocal tariffs under the International Emergency Economic Powers Act.

However, it is important to note that what is not under review is US presidential tariff authorities under Section 301 of the 1974 Trade Act, which underpin many of the American tariffs on China.

This suggests that in the worst case, the Trump administration will need to pivot rationales but not the actual tariffs that have been imposed.

This suggests that tariffs will remain a component to American trade and foreign policy, irrespective of the Supreme Court ruling in the new year.

Instead, investors should focus on two US Supreme Court rulings – both attempts by the Trump administration to fire appointees at Federal agencies.

The likely first ruling to be made in early 2026 will be on Trump’s attempt to fire Rebecca Slaughter from the US Federal Trade Commission.

This ruling may have direct bearing on the second ruling, likely to come later in the year – Trump’s attempt to fire Federal Reserve board governor Lisa Cook.

A Trump administration able to unilaterally reshape specifically the US Federal Reserve Board would potentially serve as a catalyst for volatility in not only US interest rates, but also potentially the US dollar from their respective historically low levels.

Having weathered the 2024 US presidential elections only a year ago, global investors will likely have to familiarise themselves with more local US politics in the run-up to the November 2026 mid-term elections.

While the US House of Representatives is in jeopardy of losing its current Republican leadership in 2027, the 2026 US domestic legislative agenda under the still-Republican-controlled Congress should instead be a focus for investors.

In particular, permitting reform measures set to pass the House of Representatives in late 2025 and scheduled to be considered by the US Senate in early 2026 could lay the groundwork to accelerate deployment of the capital spending catalysed by Trump’s own “Big Beautiful Bill” passed over the summer.

Importantly, if passed, permitting reforms can help the US avoid the slow roll-out of fiscal initiatives seen in Europe throughout 2025 following the fiscal initiatives.

For investors, despite the relative calm that has emerged following the tariff negotiations over the summer and culminating with the US-China agreement in South Korea in October 2025, they should continue to be wary of the “move fast and break things” approach of the Trump administration.

As was the case a year ago, we continue to believe that gold remains the foundation of risk management, as the US and China move to recast the world order in their respective favours.

In light of gold’s 60 per cent rise year to date and the associated volatility that tends to follow such moves, investors may expect more volatile returns from gold in the year ahead.

Alongside gold, Swiss francs can continue to offer a haven for US dollar investors as this new world order takes shape.

Peter Kinsella, Union Bancaire Privee’s global foreign exchange strategist, expects the Swiss franc to continue to strengthen meaningfully against the US dollar in 2026, complementing gold as a refuge in an era of global change.

The writer is group chief strategist at Union Bancaire Privee (UBP), a private bank and wealth management firm