The Trump comeback is redefining global politics, shifting policies, power dynamics, and public discourse in ways that could influence the world for years to come.
A New Normal or a Temporary Storm?
K Kumar
Retired Partner of Deloitte, India
A couple of weeks ago, Fareed Zakaria remarked that the new Trump Presidency has been nothing short of breath-taking. Every morning, we wake up to a fresh tweet, executive order, or announcement—each more startling and unprecedented than the last. From wanting to back Greenland or the Panama Canal, to making Canada the 51st state, imposing tariffs, redefining citizenship, pulling out of the Paris Accord, the ICC, and the WHO—it’s been a whirlwind. Even ideas like building a riviera in Gaza have been floated. The pace and intensity of change is unlike anything we’ve seen in our lifetimes.
Markets in Flux
Why is it so important for us to understand this? First, from an economic standpoint, and second, from a geopolitical one. Let’s start with the economics. The United States accounts for 25% of global GDP, but a staggering 75% of global market capitalisation. Less than a decade ago, that figure was closer to 50%. Over the past six or seven years, that number has shot up—and of that 75%, just 10 companies account for nearly half. That’s a huge concentration of capital. And the fact that many of their leaders were standing beside Trump during his inauguration is not just symbolic—it could fundamentally reshape global trade, commerce, and industry.
This makes it essential to not only understand broad policies, but to zoom into how these few dominant companies are aligning with the administration. Just recently, Vice President Vance made a speech in Paris. He claimed to champion small businesses, but his statements were music to the ears of oligarchs. Clearly, the proximity between big business and the White House is tighter than ever.
What does this mean for investors? It creates massive uncertainty. No rational investor would commit capital to building a supply chain today when, with a stroke of a pen, the rules of the game can change overnight. In India, private investment has already been sluggish over the last 4–5 years. This kind of unpredictability only makes it worse. It doesn’t inspire confidence—it stifles the so-called animal spirits.
Another concern: capital flight. Foreign Institutional Investors have been pulling out funds from India in large volumes. You wake up at night in a cold sweat wondering—have we hit bottom, or is there more pain ahead? No one knows if this volatility will last two months or stretch to six.
With the U.S. being the de facto safe haven, capital is flowing out, weakening currencies like the rupee. In just a few months, the INR has lost significant value. According to experts, the rupee might still be overvalued by 9%. Will we see a steep correction in the short term, or a slow depreciation of 3–4% per year over the next few years? Either scenario wreaks havoc on our fiscal planning and budget projections.
Then there’s tech. If Vice President Vance’s comments on AI are implemented—where the U.S. essentially dictates terms and expects the world to follow or face consequences. That’s a chilling proposition for a country like India. For instance, 50% of Infosys’s revenue comes from the U.S. market. For some firms, it’s as high as 60%; even the lowest is around 40%. If this uncertainty continues, our pride which is our tech industry will face serious headwinds.
Retreat of a Superpower
For decades, U.S. dominance in economy, military and through soft power made it the world’s stabilizer. But now, we see them withdrawing from multilateral institutions, most of which they helped create—the Paris Accord, WHO, NATO, and others. This creates a power vacuum. Every country has made serious green energy commitments based on the Paris accord. If the U.S. pulls out, what happens to global efforts on climate change? The WHO may have faltered during COVID, but it’s still the only global health institution we’ve got. Without U.S. funding, it’s weakened.
A Medieval Conqueror
Gopal Ratnam
Journalist based in Washington, D.C.,
I will cover three major themes: first, explain the domestic political context in the U.S. and how, if institutions function properly, some of Trump’s more extreme moves could be restrained. Second, I’ll explore what Trump 2.0 could mean for India and the world. Third, I’ll briefly touch on why Trump seems bent on dismantling institutions, both global and domestic institutions that have traditionally been the bedrock of U.S. strength.
Trump isn’t behaving like a President elected to lead a democratic government. He’s acting more like a medieval conqueror—wielding executive orders like swords, aiming to dismantle and dominate institutions. While the headlines are often terrifying, the actual impact of some moves has so far been less dramatic—but that may not last.
Let’s run through what Trump has done in just the past month. He’s signed a flurry of executive orders. Now, in the U.S., executive orders don’t have the weight of law—they can be challenged in courts or reversed by future presidents. Trump has done both: rolling back Biden’s orders and issuing his own. One major move was an attempt to withhold nearly $3 trillion in federal assistance from the $10 trillion annual budget. States sued, and courts blocked the move.
Then it was followed by the widely-circulated executive order to end birth right citizenship, which understandably alarmed immigrant communities. But this right is enshrined in the U.S. Constitution’s 14th Amendment, passed after the Civil War. A President cannot revoke it. Only children of foreign diplomats are exempt, because they aren’t subject to U.S. jurisdiction. Again, the courts stepped in and blocked the order.
Trump also threatened to slap tariffs on Mexico and Canada. Both countries, already managing issues like migration and drug trafficking, appeared to appease him—so he delayed the tariffs. Then there was a proposal to slash $4 billion from the National Institutes of Health (NIH), a key agency responsible for major breakthroughs, including the funding of mRNA vaccine research during COVID. That, too, was blocked in court.
Still, some changes have gone through. USAID has been gutted, 75,000 government employees have been laid off, and diversity programs across federal agencies are being dismantled. Legally, Trump can’t shut down agencies like USAID outright because Congress created them. Republicans control both the House and the Senate, and the opposition are wary of opposing him, they aren’t exercising their checks and balances.
Is There a Restraining Force?
Now, the big question: Was Trump actually elected to do all this? Did voters give him a mandate? Mandates are usually judged by vote share. In the U.S., the President isn’t elected by popular vote, but through the Electoral College. Even by the popular vote count, Trump got just 49.8%, while Kamala Harris got 48.3%. That’s a plurality, not a majority.
In poll after poll, voters said their top concerns were inflation and the economy. Trump promised to address inflation on Day One. But nearly a month in, inflation hasn’t been tackled. In fact, it’s rising. His executive actions don’t seem to address voter concerns at all. Is there anything that might restrain him? Possibly. In the House of Representatives, Republicans hold a slim three-seat majority—218 to 215. In the Senate, they hold 53 seats to the Democrats’ 47. These thin margins mean that even a small group of Republicans breaking ranks could limit Trump’s actions. But whether that happens is still an open question.
Congressional elections in the U.S. take place every two years. The next round is due in November 2026, when all 435 seats in the House of Representatives—the lower house—will be up for election. In the Senate, one-third of the 100 seats come up for re-election every six years, which means 33 Senate seats will be contested in 2026.
Of those 33 Senate seats, 20 are currently held by Republicans. Many of those senators are eager to get re-elected, so they’re likely to be cautious about supporting Trump policies—like tariffs or budget cuts—that could cause economic pain to their own constituents. But it also depends heavily on how effective the Democratic opposition is at presenting an alternative narrative to voters. These are pressure points that foreign governments are well aware of—and in some cases, actively exploit.
China’s Strategic Moves
Take China, for example. Trump has imposed tariffs on Chinese goods, and China has retaliated. But their retaliation has been strategic: they’ve targeted American sectors located primarily in Republican strongholds. A recent Brookings Institution study found that the areas most intensely impacted by Chinese retaliatory tariffs are concentrated in energy and manufacturing-heavy counties across states like North Dakota, Indiana, Ohio, Kentucky, Alabama, and West Virginia—all of which are strong Trump-supporting regions. So China’s countermeasures are designed to maximize political pressure on Trump and his allies.
Meanwhile, Trump has also threatened to roll back electric vehicle (EV) incentives introduced by the Biden administration. That’s already causing unease in the auto industry. Many of Trump’s economic actions could end up hurting his own voter base—through rising unemployment, higher inflation, and declining industrial investment.
The Art of Distraction
In a normal political environment, this would be a recipe for electoral disaster. But the Republican Party has, over time, mastered the art of voter distraction. Rather than directly addressing economic grievances, the party often shifts the conversation to cultural and identity issues. There’s an old political saying: politics only has two buttons—hope and fear. And the modern Republican strategy is all about pushing the fear button.
They’ve demonised immigrants, invoked foreign threats, targeted LGBTQ+ communities, and stirred up anxieties around race and religion—all to distract voters from the fact that Republican economic policies are often detrimental to working-class Americans. And it’s worked remarkably well for them. Now, voters aren’t the only constituency the Republican Party serves. The other major one is the ultra-wealthy donor class and corporate lobbyists—many of whom surround Trump and bankroll his campaigns.
Crossing The Budget Hurdle
That brings us to the next big political moment coming up: Congress has to pass the federal budget for 2025. On one side, there are hardliners who are deeply opposed to increasing the national debt which currently stands at $36 trillion. On the other side, there are factions that want to extend these tax breaks regardless of the fiscal cost.
To reconcile the two positions, they’d have to slash spending, especially on social welfare programs. But that would hurt low-income voters who rely on these government services. At the same time, there’s another Republican faction pushing to increase defence spending, which is already at $900 billion annually. That means the national debt will grow quickly. You can’t make all of this add up without internal conflict over how to balance the books.
Manufacturing Threats
To make matters worse, Trump and his allies keep manufacturing new threats. Just last week, Trump designated several Mexican drug cartels as foreign terrorist organizations. What that label means is the U.S. could theoretically send military forces into Mexico to confront these gangs—essentially creating another war. But not everyone in the Republican Party supports that kind of aggressive foreign policy. There are isolationists within the party who want nothing to do with overseas military operations—they just want America to be left alone.
Now, if the Democratic Party in opposition can stay united, it will be difficult for Trump to push through his entire agenda without at least some bipartisan support. And if no compromise is reached, that could once again lead to a government shutdown. In fact, the longest shutdown in U.S. history—35 days—occurred during Trump’s previous term.
Reciprocal Tariffs
Trump has also issued a new executive order on reciprocal tariffs, which would impose the same tariff rates on foreign goods that those countries apply to American goods. But it’s still unclear how this would work in practice. Implementing such a policy could become incredibly complex and messy. The outcome could be rising prices for consumers, more inflation, and increased economic pain for Republican candidates heading into next year’s elections. So right now, there’s a lot of internal fighting within the Republican Party, and how these contradictions get resolved remains to be seen. Things might become clearer in the coming months.
The Message for India and the World
What does all this mean for India and the rest of the world? Well, in general, Americans have historically shown very little interest in foreign policy. But there is one foreign policy issue that resonates deeply with American voters—and that’s immigration. And that’s why Trump constantly hammers on undocumented immigrants and paints them as a threat. This narrative has huge political mileage, even though it isn’t actually grounded in fact. Ironically, Barack Obama—not Trump—still holds the record for the most deportations in U.S. history. In fact, he was often referred to as the ‘Deporter-in-Chief.’ The other foreign policy matters like the Russia–Ukraine war, the Israel–Hamas conflict, or the growing threat from China do not interest the average American voter. They don’t prioritise them at the ballot box.
India’s Defence Ties
Prime Minister Modi recently visited Washington. After his meeting at the White House, Trump announced that India would be buying billions of dollars’ worth of U.S.-made weapons. One of the items reportedly under discussion was the advanced F-35 fighter jet. There’s a lot of friction between the two sides over how this should work. India does not want to just buy foreign-made weapons—it wants to manufacture them locally under the ‘Make in India’ initiative. However, the U.S. is very reluctant to transfer sensitive technology. Most of their advanced systems come with what’s known as a ‘black box,’ a sealed system that can’t be opened or replicated. On top of that, U.S. defence deals include a strict and intrusive inspection regime.
Modi and Trump also said in their joint press conference that they had agreed to collaborate on cutting-edge technologies—including semiconductors, quantum computing, and artificial intelligence. But in reality, these collaborations have already been underway for several years. So this wasn’t a ground-breaking announcement but more of a continuation of existing efforts.
A Weak Strongman?
What does all this mean for global alliances? Well, the U.S.-led post–World War II global order has been unravelling for some time now. Trump’s running mate, JD Vance, recently said that Ukraine should not expect to regain its 2014 borders, effectively conceding territory to Russia. That’s a clear signal that Trump administration might accept Putin’s land grabs in violation of international law.
Trump has a long history of admiring Vladimir Putin. Historian Timothy Snyder has an interesting take. He says Trump is a ‘weak strongman’—not a wolf in sheep’s clothing, but a sheep in wolf’s clothing. Someone who acts tough but caves in front of actual strongmen like Putin. If the United States under Trump begins to support ideas like taking the Panama Canal or Greenland by force, or if it fails to oppose Russia taking Ukrainian territory, then it loses all moral authority to oppose, say, China taking Taiwan by force. It sets a dangerous precedent where any powerful country could feel emboldened to invade its weaker neighbours without fear of international backlash.
Honestly, I think they could get a lot worse, starting domestically and then spiralling outward to the rest of the world. So far, many of Trump’s more extreme executive orders have been checked by the courts. But they’re laying the groundwork for a legal and constitutional argument that the President can ignore court orders. If that happens, and if Congress is also unwilling to act as a check, then you have a situation where the entire system of government could collapse. The U.S. Constitution was built on a balance of three co-equal branches: the President, the Congress, and the courts—each designed to check and balance the others.
The American Support Conundrum
Do Americans actually support this level of institutional destruction—both at home and globally? And if they do, why? To understand that, we need to take a step back and look at the broader social and economic context in which Trumpism has taken root.
There is a deep and long-standing rage and anger in large parts of American society—rage that Trump taps into and channels. Let me just outline a few major trends. First, there is massive income inequality. The top 5% of Americans own two-thirds of the national wealth. The U.S. has a per capita GDP of $82,000, but that number hides huge disparities. For example: 12% of urban residents live in poverty. A shocking 30% of rural Black Americans live below the poverty line—defined as $15,000 per year. In some rural counties in Georgia, there’s not a single maternal healthcare physician for miles, forcing women to travel nearly 100 miles for basic prenatal care. In Alabama, raw sewage still bubbles up in Black families’ backyards. In Detroit, large numbers of poor residents have been exposed to lead poisoning from contaminated water
This deep suffering often goes unreported, but it’s real, and it’s widespread. A lot of this has roots in the economic shifts of the 1970s and 1980s, when free trade and market-driven capitalism led many of the biggest American companies to move their factories overseas. What they left behind were hollowed-out communities.
This economic devastation has had very real human consequences: drop in life expectancy; rising drug overdoses; spike in suicides, especially from gun violence and a chronic lack of access to affordable healthcare. This is the social and emotional soil in which Trumpism has taken root. It’s not just about ideology—it’s about dislocation, desperation, and a loss of meaning for millions of Americans.
But while all of this was unfolding in small-town America, there were also America’s disastrous wars in the aftermath of 9/11. In Afghanistan and Iraq, the U.S. spent a staggering $5.2 trillion, lost thousands of soldiers, and saw tens of thousands more return home physically and psychologically wounded. Both wars ended in failure.
What’s worse is that no one was held accountable. Many senior generals misled the public. And yet, none of them faced consequences. Meanwhile, on the civilian side, you all probably remember the 2008 financial crisis. Americans lost an estimated $13 trillion in household wealth. One in four families lost at least 75% of their wealth. But again—not a single Wall Street executive responsible for creating and selling those worthless mortgage-backed securities was ever punished.
People ask, “Why is the American voter so angry?” There’s a deep sense among millions of Americans that the system is rigged, that they’re being left behind, while the well-educated elites—especially those living along the coasts, including immigrants—continue to prosper from the stock market and the tech boom. All of this has been amplified by social media. This anger isn’t just economic. There’s also a clear racial component.
There is real resentment among parts of white America that black and brown people, including educated immigrants, are succeeding—and there’s a perception that their success comes at the expense of white Americans. Barack Obama’s election was a turning point, jolting many white voters into a fear that their social and political dominance was eroding. Demographers project that white Americans could become a minority within the next 10 years. Trump exploited these fears. So we’re in a very dangerous and complicated moment, both for American democracy and for the world order that has existed since World War II.
Q&A
Air Marshal M Matheswaran: The stark inequality in the United States becomes visible if you travel through the central part of the country. The U.S. is a massive geographical space—three times the size of India—but has a population of just about 300 million, compared to our 1.4 billion. And yet, the hostility towards immigrants continues, despite the vastness and the availability of resources.
The disparity in living standards is glaring. This creates deep social divisions. Trump has exploited this inequality and redirected people’s frustration into misplaced anger—particularly around race and immigration. He has convinced a large portion of Americans that these are the real problems, rather than the structural issues rooted in the economy.
A Recurring Pattern
Now, I want to pivot from there to something broader. The United States has been the global hegemon since 1945. If you’ve read Paul Kennedy’s “The Rise and Fall of the Great Powers,” you’ll recognise a recurring pattern: every hegemon eventually overextends itself. Once a power rises and dominates the global order, it cannot simply get down. It must continue to stretch its influence, often beyond sustainable limits.
The U.S. did this by creating systems like the petrodollar and by ensuring the dollar became the global reserve currency. But this dominance demands constant maintenance. Today, the U.S. maintains 902 military bases across the globe. It’s combined spending on defence, security, and homeland protection is $1.6 trillion a year. To fund all this, it keeps printing dollars, and the rest of the world essentially pays for maintaining this hegemony by buying and holding dollars.
But this order is now under serious threat. Two major events—the Russia-Ukraine war and the Gaza conflict—have exposed the fragility of U.S. dominance. The global South is increasingly disillusioned. Many countries now believe the U.S. has weaponised the dollar, using sanctions and economic pressure not just as policy tools but as instruments of coercion. The trust in America as a reliable guarantor of global public goods is eroding.
The Role of the Deep State
Much of the continuity in U.S. foreign policy, regardless of who is president, comes from the so-called ‘deep state.’ Thinkers like Michael Hudson or journalists like Chris Hedges argue that Trump’s actions are more theatrical than consequential. The only real alternative is for the U.S. to acknowledge a multipolar world.
Look at what’s happening with BRICS. The very idea of de-dollarisation has prompted threats from Trump, who said he’d come down on them like a ton of bricks. But here’s the truth: he may no longer be able to stop it. In 2001, the dollar made up 75% of global reserves. Today, that number is down to 59%, and it’s declining rapidly. Meanwhile, U.S. domestic debt has ballooned to $36 trillion. These are not numbers you can ignore.
Gopal Ratnam: Whether Trump can be stopped, or at least slowed down, really depends on how domestic politics unfolds. Of course, people are saying all sorts of extreme things—like Trump might refuse to leave office or cancel elections altogether. These are worst-case scenarios, and while unlikely, if something like that were to happen, then all bets are off.
Air Marshal Matheswaran: Trump is essentially a businessman, and now he’s surrounded himself with many tech oligarchs. Have these individuals essentially taken over?
Gopal Ratnam: Elon Musk has been given free access, which is unprecedented. That’s a matter of concern. When it comes to other tech giants—Zuckerberg, Sundar Pichai, Jeff Bezos—I don’t think they’re interested in governance. They mostly just want to be left alone to make money, and Trump seems to be offering exactly that. I have a strong feeling that in the coming months, a major clash between Musk and Trump is inevitable.
Air Marshal Matheswaran: A couple of economic points I want to raise. One key issue is how China seems to have prepared itself strategically for Trump’s possible return. Unlike last time, when their response to Trump’s tariffs and trade war was somewhat reactive, this time their approach is much more calibrated and forward-looking.
