US foreign policy under Trump impacts geopolitical risks

The MAGA movement’s values shift US foreign policies

The return of Donald Trump and his MAGA movement to the US presidency has had a major impact not only on the global economy and trade, but also on the geopolitical situation. This is notably the result of a radical shift in US policies, which reflects a US administration operating on an entirely different set of values from the rest of the Western world regarding international cooperation, authoritarian stances and a prevalence of economic nationalism over free trade. Moreover, the pace of change has been unprecedented and has seen Trump use his expanding presidential power to unilaterally issue 140 executive orders, the highest number ever recorded in the first 100 days of any American president, despite a Republican-controlled Congress.

Geopolitical risks evolve under a dominating balance-of-power paradigm

The Trump administration’s stance on world affairs clearly embraces a view based on hard military power, which is in line with Russia’s world view and China’s coercive approach where large powers with the biggest military power have the right to dominate their neighbours and defend their sphere of influence. In terms of Ukraine, recent developments – notably the USA voting along with Russia in the UN, allegations that Ukraine started the war instead of Russia, Trump’s approval of Putin’s territorial ambitions and willingness to end the conflict rather than achieve a lasting peace, bilateral discussions between Russia and the USA that exclude Ukraine and the EU – represent a brutal U-turn for a key partner in the conflict, a sharp deterioration of US-Ukraine relations and, more broadly, of the transatlantic relationship. Amid delays in negotiating a peace deal, the risk is that the USA eventually withdraws from the Ukraine conflict, leaving the entire dispute unresolved and Ukraine without US military support, including much needed intelligence and technical support. At this stage, after decades of underinvestment in the defence industry, the EU lacks the defence and military capabilities to compensate for this reduction of US support.

Trump pledged to end the wars in Gaza and Ukraine within 24 hours. And while a successful truce was implemented in Gaza within weeks, Israel has since resumed and intensified its offensive on Gaza. Alongside the fragile ceasefire in Lebanon, high tensions in the West Bank, the intensification of the conflict with the Houthis and military operations in Lebanon and Syria, these events are raising regional tensions again. However, the major risk for the region is still uncertainty related to the ability of the USA and Iran to reach an agreement over Iran’s nuclear programme, where the failure to find a compromise between the parties could substantially increase risks of regional conflict.

The radical shift in geopolitics does not stop there. The US administration is openly discussing a takeover of the Panama Canal and Greenland, which threatens its allies on the military front. Moreover, the USA is interfering in domestic politics of allied nations (e.g. within the EU) and claims to be unwilling to intervene in foreign conflicts. This implies that it is no longer seen as a reliable security partner for NATO and other US allies, most notably in Asia (Taiwan, Japan and South Korea).

Alarmed by Russia’s threat and a possible end to the US security guarantee, the new European Commission has radically shifted its policy priorities from climate change to defence (competitiveness and simplification). During a special summit in March this year, EU leaders agreed to substantially increase defence spending and reduce fiscal obstacles thereto, and they agreed to jointly borrow up to EUR 150 billion. Furthermore, the EU and UK are collaborating closely on defence issues, as shown by the Franco-British “coalition of the willing”, which aims to ensure peace following a potential peace agreement in Ukraine. Collaboration with other liberal democracies – including Japan, South Korea, Australia and Canada – is also broadening, as they face the same disengagement with the USA.

The threat for Asia from the US-China rivalry

Asia is currently undergoing a rapid arms build-up, in China as well as in US allies (Japan, South Korea and Taiwan). The region remains the epicentre of the most severe potential conflict risks, particularly amid the increasingly tense US-China rivalry. In the South China Sea, tensions have picked up as a result of frequent maritime clashes between the Philippines and China, while Taiwan, the region’s top war risk, continues to face China’s heightened military pressures. Trump’s transactional approach in Taiwan, as for the other US allies in East Asia, has eroded, and has made the US security commitment more uncertain. As a result, Japan, South Korea and Taiwan are likely to win time by offering some concessions to the USA while expanding their defence spending for their own protection and developing their cooperation with other allies in the Indo-Pacific. The Korean peninsula also remains at risk due to North Korea’s advanced nuclear weapon development, the intensification of missiles firing and the recent mutual defence treaty with Russia. Moreover, war risks go beyond East and Southeast Asia, as shown by the recent escalation of military strikes between India and Pakistan. The reignited conflict between the two nuclear powers – with India supported by the USA and China as a key ally to Pakistan – is notably testimony of the risk posed by a new chaotic world order and emerging geopolitical blocs, which could increase risks of conflict around those unresolved geographical disputes between countries.

Finally, Donald Trump is attempting to influence the politics of other countries. Strong leaders, such as President Erdoğan in Türkiye and President Vučić in Serbia, are feeling emboldened enough to pursue their own agendas, knowing that Trump would likely approve and that the EU is too preoccupied with its own priorities and still needs them for its own national security – Türkiye, a member of NATO, has a powerful army and is a key location, while Serbia has recently approved the development of its lithium reserves in a project that is highly unpopular.

The US isolationist turn will accelerate world disorder

The first months of Trump’s second administration have been marked by a rapid shift in domestic and foreign policies and high unpredictability, meaning that US credibility and legitimacy are likely to be weakened in the long term while Western and ally countries start to build new military alliances without the world superpower. This redistribution of cards could benefit China and also the EU, but only if it remains united and is able to defend its territory. More broadly, recent developments have highlighted that the Trump presidency is definitively hastening the decline of the US-led international order due to his “America First” agenda, reluctance to provide security guarantees to US allies and preference for transactional deals and use of coercion. As a result, an acceleration of current trends is expected, such as an enhanced military cooperation between Russia, North Korea and Iran; less effective Western sanctions; a more informal and variable Global South that frequently opposes the West on various issues and demands greater influence; the expansion of BRICS; and also more conflicts in a world without a nation at the helm. In this uncertain and fast-changing world order, the likelihood of disruptive events is high, and in a world based on the balance of power, the weakest countries will be the most impacted.

Analysts: Pascaline della Faille – p.dellafaille@credendo.com; Raphaël Cecchi – r.cecchi@credendo.com; Jolyn Debuysscher – j.debuysscer@credendo.com; Louise Van Cauwenbergh – l.vancauwenbergh@credendo.com; Andres Hernandez Cardona – a.hernandez.cardona@credendo.com; Jonathan Schotte – j.schotte@credendo.com