Tag Archive for: Donald Trump

Trump’s trade and economic security agenda: what we know so far

President Donald Trump’s trade and economic security team is united and ready to use tariffs, export controls and enhanced sanctions to strengthen the US economy and achieve geostrategic outcomes against US adversaries. Those objectives range from preserving the US technology edge over China to stemming the flow of fentanyl pre-cursors into the United States and forcing a Russia-Ukraine peace.

The team also stands ready to use these tools against US allies and partners for what the administration considers to be the greater good and for addressing trade imbalances, building up US industries, pushing up allies’ defence spending or managing immigration. Australia can take nothing for granted and must take every chance not only to demonstrate how the alliance benefits US security and prosperity but to show that hindering the Australian economy with trade measures would damage US security.

Of the slew of presidential actions and executive orders already issued, the America First Trade Policy memorandum has been one of the more detailed, with stated objectives of promoting investment, productivity, US industrial and technological advantages, defending economic and national security and benefiting US workers. It initiated more than 20 possible trade and economic security measures to address unfair and unbalanced trade.

The only surprise was that decisions on tariffs and other measures, including those relating to China, were delayed until after 1 April, to allow for detailed reviews by the Treasury, Commerce Department and the Office of the US Trade Representative. Detailed reviews are required for the use of some trade measures, those under section 232 of the 1962 Trade Expansion Act and Section 301 of the 1974 Trade Act. But others, such as those under the International Emergency Economic Powers Act of 1974 and section 122 of the 1974 Trade Act, can be imposed by presidential declaration, though sometimes only temporarily.

Trump’s trade and economic security team

For the main roles in the economic and trade team, Trump nominated Scott Bessent, a billionaire hedge fund manager, as treasury secretary; Howard Lutnick, a Wall Street trader and chief executive, as secretary of commerce; and Jamieson Greer as US Trade Representative (USTR). Greer was chief of staff to Robert Lighthizer, Trump’s first-term USTR. The Senate confirmed Bessent’s appointment on 27 January and is likely to approve the other two within days or weeks.

They appear to be in lockstep with Trump on use of tariffs, export controls and sanctions, though the degree and breadth of such measures is not settled. This contrasts with a diversity of views in Trump’s first term.

In his testimony to the Senate Finance Committee on 16 January, Bessent said the administration could raise tariffs for three reasons: to remedy unfair trade practices in a particular sector or exercised by a specific country; to raise revenue; or as a negotiating tool. Bessent strongly defended tariffs, particularly as tools for achieving deals, and emphasised that he expected the Treasury, Commerce Department and the Office of the USTR would deliver a coherent economic security agenda.

Lutnick, whose confirmation hearing before the Senate Commerce Committee is scheduled for 29 January, has actively promoted Trump’s use of tariffs as a tool to force other countries to reduce their tariffs on US goods or to generate revenue for widening domestic manufacturing.

In his testimony in May 2024 to the Congressional US-China Economic and Security Review Commission, Greer advocated expanding economic security policies implemented under the first Trump administration and the administration of president Joe Biden. That included calling for the extension of tariffs on China to include Chinese companies operating in other countries.

Also awaiting confirmation are key members of Trump’s first-term trade team. These including Kevin Hassett, former head of the White House Council of Economic Advisers, nominated as director of the National Economic Council; Russell Vought, former White House budget director and lead in the Heritage Foundation’s Project 2025, nominated to again be Trump’s director of the Office of Management and Budget; Stephen Miran, a former senior economic policy adviser at Treasury, nominated as chair of the Council of Economic Advisers; and Peter Navarro, a former trade adviser and avowed China hawk, nominated as Senior counselor for Trade and Manufacturing. This group will constitute the upper middle management of Treasury, Commerce and the Office of USTR, responsible for executing the agenda.

The America First Trade Policy in detail

According to the memorandum, the Treasury by 1 April must review US trade partners’ exchange rates and recommend ways to counter currency manipulation and other unfair trade practices. In the same time limit, it must assess risks associated with continuing exemption of imports worth less than US$ 800 from duties (currently allowed under de minimis exemption), and it must consider strengthening limits on US investment in national security technologies and products in China. Biden’s Executive Order 14105 of 9 August 2023 imposed those limits.

Also by 1 April, the Commerce Department must investigate the US deficit in merchandise (goods) trade and associated economic and national security implications, and it must recommend remedies, potentially including a global tariff and other section 232 tariffs. The department must also review and improve US anti-dumping and countervailing laws, consider revocation of US-China Permanent Normal Trade Relations and improve US-China reciprocity on intellectual property rights. To improve US economic security, the department will lead a full review of the US industrial and manufacturing base and export control system to assess whether additional barriers are needed to protect the US’s technological edge. The steel and aluminum sectors are listed.

The Office of the United States Trade Representative will have the biggest task. By 1 April, it must complete a wholesale review of countries’ trade practices, US trade agreements and sectoral agreements and propose ways to remedy unfair practices and improve market access and job outcomes for US workers and businesses.

Unsurprisingly, US trade with China is a particular focus. Foreshadowing application of tariffs and other measures, the USTR must review the US-China trade agreement to determine whether China is abiding by the agreement (it’s not, but the US isn’t fully complying, either), consider further section 301 tariffs based on an investigation started during the first Trump Administration and address any unreasonable Chinese actions that burden or restrict US commerce.

Also unsurprising is that there is no reference to consultation with US allies and partners in the America First Trade Policy memorandum. Friends get no free pass—but they never do in US trade policy. Even longtime and trusted US allies such as Australia, which has a trade imbalance that favours the US and is in the US’s primary strategic theatre, must advocate strongly to minimise the impact of foreshadowed measures.

Showing just how turbulent US trade and economic security policy could be until 2029, Trump on 26 January threatened a tariff of 25 percent and later 50 percent on Colombian imports to the US in retaliation for the US ally’s refusal to accept planeloads of its deported nationals. Colombia backed down within hours.

Since his inauguration, Trump has said that Mexico and Canada must do more before 1 February to stop fentanyl and unauthorised migrants entering the US to avoid a 25 percent tariff. China must do more to stop fentanyl to the US, via Mexico and Canada, to avoid a 10 percent import tariff, Trump has said.

In the latest development, on 27 January, Trump told House of Representatives Republicans in Miami he would add tariffs on foreign-produced ‘computer chips, semiconductors and pharmaceuticals to return production’ to the US. He also said he would be ‘placing tariffs on steel, aluminum and copper’.

This is where we are after only seven days. It will be a wild ride.

In Pacific island countries, Trump should pursue embassy transformation

The Biden administration struggled with adequately advancing US national security and foreign policy interests in the Pacific islands. The problem was that the White House failed to select the right business concept to pursue.

What is needed is not simply a strategic pivot. What is needed is a business transformation. That requires more than reform and modernisation. It requires a radical rethinking and restructuring of the core business processes of the US embassies and consulates to the Pacific island countries.

Until that happens, Washington’s foreign policy establishment will be unable to afford to compete with revisionist authoritarian powers seeking to displace US influence in the Pacific islands.

Unfortunately, such organisational change cannot be achieved overnight. Among other things, it will require new executive leadership teams, and ambassadorial confirmations for Pacific island countries are notoriously slow. However, that does not mean that the new Trump administration cannot change the status quo at US diplomatic missions in the region by the end of the first 100 days. Here are four suggestions that could help to get the ball rolling.

First, the administration should systematically assess the strategic planning of the State Department in the Pacific. As a matter of policy, each mission is supposed to create a multi-year strategic plan that declare the United States’ whole-of-government priorities in ‘a given country’.

The plain meaning of the phrase ‘in a given country’ suggests that the requirement is to produce an integrated country strategy for every independent state of concurrent accreditation. In practice, that does not always happen. For example, the US embassy to Fiji, Kiribati, Nauru, Tonga, and Tuvalu produced a single integrated country strategy for what it refers to as ‘five diverse and geographically distant Pacific Island nations’.

The Trump administration should consider providing different guidance and instructions to missions that cover multiple countries. That revision might stipulate that the mission is to produce separate integrated country strategies for each of the countries, followed by an integrated mission strategy that synthesises the individual country plans.

Second, Trump should re-evaluate the concurrent accreditation of the diplomatic staff at the US embassy in Fiji to Kiribati, Nauru, Tonga and Tuvalu. These countries span the Pacific’s cultural subregions, Fiji being part of Melanesia, Nauru and Kiribati within Micronesia and Tonga and Tuvalu forming part of Polynesia.

The Trump administration should consider restructuring the US diplomatic footprint across the region. While current arrangements may reflect logistical and resource constraints, a more strategic approach would create three subregional complexes of US embassies, consulates and consular agencies. Within each of these complexes, key business functions would be centralised to promote efficiency and thereby reduce costs.

Under this strategic approach, the Melanesian complex would be composed of the US embassies in Fiji, Papua New Guinea, Solomon Islands and Vanuatu. The Micronesian complex would be composed of the US embassies in Marshall Islands, Federated States of Micronesia and Palau. And the Polynesian complex would be composed of the US embassies in Samoa and Tonga and the US Consular Agency in French Polynesia.

Under this structure, it would make sense for the concurrent accreditation for Kiribati and Nauru to shift to the US embassy in Marshall Islands until the US embassy in Kiribati is established. Similarly, it would make sense for the concurrent accreditation for Tuvalu to switch to the US embassy in Samoa.

Third, the White House should re-evaluate the regional diplomatic posture of the US in foreign dependencies and areas of special sovereignty. In the Caribbean, the US has an independent mission for Aruba, Curacao and Sint Maarten, which are constituent countries of the Kingdom of the Netherlands. In East Asia, the US has an independent mission for Hong Kong and Macau, which are special administrative regions of the People’s Republic of China.

In the Pacific, the US recently established diplomatic relations with the Cook Islands and Niue, self-governing states in free association with New Zealand. Following these precedents, the Trump administration should re-evaluate the diplomatic terminology used to describe other foreign dependencies, areas of special sovereignty and sovereign independence movement territories across the region.

Fourth, the Office of the Inspector General of the Department of State should address the gap that exists in inspections of the US embassies in Fiji, Tonga and Samoa. Under the Foreign Service Act of 1980, the office is required to inspect every US diplomatic post at least once every five years.

Unfortunately, that requirement is rarely met in practice, thanks to waivers from the United States Congress. The most recent inspection reports for the US embassies in Fiji and Samoa were a decade and a half ago. Shockingly, that was before the US pivot to Asia ever really started in earnest.

Australia enters the America First era: an analysis of the executive orders

The litany of executive orders that have dropped on the White House website tell us plenty about what Australia can expect from a second Trump term’s foreign policies.

And there are plenty of implications of the America First agenda for Canberra.

Let’s begin with Unleashing Alaska’s Extraordinary Resource Potential. Trump’s intent to unlock Alaska’s ‘bounty of natural wealth’ by opening offshore drilling and greenlighting dormant liquified natural gas (LNG) export projects is a boon for the US economy and energy security.

But plans to ‘prioritize … the sale and transportation of Alaskan LNG to … allied nations within the Pacific region’ potentially cuts Australia’s grass. Our fractured LNG export ‘strategy’ is going to have to compete with likely cheaper LNG flooding the Asian market.

Trump’s America First Policy Directive on foreign policy is rather literal, simply stating that it will always put ‘America and its interests first’. Australian policymakers must now frame commitments, agreements, and policies regarding the US around this mandate.

Understanding that this is the way decisions will be taken in this new era will save time and public servants’ energy.

We can already apply the America First policy to one case study: AUKUS pillar one. Trump’s US can be expected to continue supporting the optimal pathway for several national interest reasons. First, Australia has already paid cash. Second, the rotation of US and British nuclear submarines through HMAS Stirling in Western Australia affords a ‘beachhead’ for US strategic depth in the Indo-Pacific. Third, Australia will give billions of dollars more to the US for Virginia class submarines.

America First? Tick.

Central to the America First era is Trump’s plan to block Chinese overreach into strategic regions of American interest. It’s not clear how the US might secure control of Greenland and the Panama Canal, but it’s quite clear why Trump wants to do it.

Canberra shares with Washington common interests and challenges posed by Beijing’s creeping territorialisation efforts in Antarctica. Antarctica is a strategic continent that needs much more work through the US-Australia alliance to protect it.

One obvious point of divergence is commitment to multilateralism. There appears to be zero reversal of this trend—Trump has signed an order to withdraw the US from the World Health Organization, and has signalled an intention to pull out of the Paris Agreement on climate change.

Further Trump presidential action is aimed at multilateralism. Significantly for Australia given the amount of US and other multilateral companies that have operations in our key industries, Washington is also ditching the OECD Global Tax Deal, which was negotiated by the Biden administration though never approved by Congress.

Representing 90 percent of global GDP, and signed by 136 countries and jurisdictions, it seeks to ensure big firms ‘pay a fair share of tax wherever they operate and generate profits’. Australia remains a fervent advocate for it, along with the remnants of most multilateral bodies, while Trump’s memorandum prioritises ‘sovereignty and economic competitiveness by clarifying that the Global Tax Deal has no force or effect in the United States’. This will be a problem for Australia.

An area of little divergence appears to be foreign aid. Australian efforts in this sector are dismal at best—roughly $4.7 billion in foreign aid was distributed in 2023-24, placing Canberra 26th out of 31 wealthy countries ranked for how much foreign aid they provide. Trump’s Reevaluating and Realigning United States Foreign Aid order might put pressure on Australia to ‘do more’—that is, spend more—in our region. The order freezes US aid while a review is undertaken and frames foreign aid to be ‘destabili(sing) world peace by promoting ideas in foreign countries that are directly inverse to harmonious and stable relations internal to and among countries’.

Trump’s declaration of a ‘national energy emergency’ might trigger a much-needed national debate in Australia about our persistent energy insecurity. Our nation sits on immense resource wealth yet has gone from being a global LNG export superpower to importing gas to meet domestic needs in less than a decade.

Trump’s memorandum on Restoring Accountability for Career Senior Executives needs little explanation as to how it could provide lessons for Canberra. Group-think and risk-adverse career public servants have hollowed out our public service’s ability to ‘faithfully fulfill … duties to advance the needs, policies, and goals’ of Australia.

The TikTok saga continues into the Trump 2.0 era. Never fear, watchers of MomTok—a group of Mormon ‘yummy mummies’ who post on TikTok, for the uninitiated— Trump’s attempt to find a compromise on an outright ban of TikTok gives the US government 75 days to get to the bottom of Beijing’s reach afforded by the popular app being used by 170 million Americans.

NSW Premier Chris Minns finds a ‘return to work’ ally in Trump, whose Return to In-Person Work mandate notes ‘all departments and agencies in the executive branch of Government shall, as soon as practicable, take all necessary steps to terminate remote work arrangements’. Again, this could energise debate here in Australia for similar measures.

Trade remains a concern for Australia. Will we, or wont we, be slapped with the tariff stick? Will Trump be able to separate bilateral trade relations from Australia’s lacklustre defence spending? Trump’s America First Trade Policy provides no clear answers. But the Albanese government needs to recognise that simply pointing to a healthy American trade surplus with Australia—saying ‘smile and wave boys’—might no longer pass Trump’s pub test.

Australia must be clear-eyed and pragmatic about Donald Trump

Australia must be clear-eyed and pragmatic about Donald Trump’s return to the White House, looking past the rhetoric to focus on advancing our strategic interests in an increasingly competitive Indo-Pacific region.  

His ‘America First’ declarations may unsettle traditional diplomatic sensibilities, but they mask a crucial reality: the United States isn’t withdrawing from global leadership; it’s redefining how that leadership works. While it is a rejection of the idea the US can, and should, continue to underwrite security and stability to the world alone, critics are wrong to call it isolationist. 

In fact, one of the first executive orders signed on day one was to require American foreign policy to be guided by domestic interests. That isn’t withdrawal from the world or in fact radical. One of Joe Biden’s stated foreign policy priorities was always to ask: ‘What will our foreign policy mean for American workers and their families?’ 

For Australia, Trump’s second term presents both challenges and opportunities, but only if we can distinguish between his style and the substance of American strategic objectives. 

The key for Australia will be to focus on actions, not words. Trump’s inauguration speech, while light on foreign policy specifics, revealed an approach grounded in peace through strength—suggesting that US superiority means fewer conflicts through deterrence. This aligns with Australia’s interests in three crucial areas: maintaining a stable Middle East with a secure Israel, preventing Russian victory in Ukraine, and most importantly, ensuring China cannot use its economic power to impose its military, technological and diplomatic might on the rest of us. 

US involvement will, however, come with a requirement that allies make an equal or meaningful contribution. In this way, Trump’s modern-day America First movement differs from the first incarnation in 1940 of those Americans who did not want to enter World War II regardless of Britain doing more than its fair share to save the world from fascist authoritarianism. 

It is likely that the Trump administration will challenge China’s behaviour early in the term. This includes by calling out cyber attacks, and by demanding fair and equitable trade. Secretary of State Marco Rubio’s congressional testimony as part of confirmation hearings provides the most recent, and clearest, indicator.  

The Quad foreign ministers’ meeting has provided a further early indication, producing a joint statement that was brief but heavily security focussed. The fact that the Quad was effectively the first international meeting of the new administration also highlights the US will look to continue leading on regional stability. 

And the Quad’s pre-eminence shows the need to see global affairs as far more than just US-China rivalry.

As the European Union’s President, Ursula von der Leyen, notes, we’re entering an era of ‘harsh’ strategic competition. While US-China rivalry dominates headlines, the reality is more nuanced. Multiple nations are engaged in a sophisticated contest for influence, with Australia positioned at the epicentre of this competition in the Indo-Pacific. Our success will depend on our ability to deploy both hard and soft power effectively.

Australia holds unique advantages in this environment. Our democratic credentials, commitment to the rule of law, and long history of regional engagement provide a strong foundation for leadership. The challenge is to build on these strengths while working in partnership with our neighbours and allies. This means maintaining our strategic alignment with the US while speaking with our own voice on regional issues.

The AUKUS partnership exemplifies how Australia can successfully navigate this new era. It represents more than just a submarine deal—it’s a blueprint, as Rubio has called it, for modern alliance-building that delivers tangible benefits to the broader Indo-Pacific region. This kind of innovative thinking shows how like-minded nations can work together to maintain a free and open regional order while sharing the burden of regional security. 

The path forward requires sophisticated diplomacy that can work with Trump’s unorthodox style while advancing our regional interests. We must judge both the US and China by their actions, not their words—particularly given Beijing’s history of breaching international agreements while claiming to uphold them.  

As we prepare for this new era of strategic competition, Australia must be bold in its vision while pragmatic in its execution. We need political leadership that can see past rhetorical flourishes to identify and pursue our core strategic interests. The foundations are there in our democratic values, our regional relationships, and our strategic partnerships. The challenge now is to build upon them with the creativity and courage that these complex times demand. 

The success of this approach will depend on our ability to look beyond Trump’s unconventional diplomatic style to the underlying strategic alignment between Australian and US interests. By focusing on actions over rhetoric, strengthening our regional partnerships, and maintaining our independent voice while working closely with allies, Australia can effectively navigate the challenges and opportunities of this new era in global politics. 

The EU’s year of fundamental choices

This year was always going to be important for the European Union, given the start of a new EU Commission mandate, a relatively new European Parliament and a change at the helm of the European Council. But recent developments—including the collapse of the German government, the beginning of coalition negotiations led by the far right in Austria, the end of Russian gas flows to the EU via Ukraine and Donald Trump’s victory in the US presidential election—have raised the stakes significantly.

Moreover, Europe confronts a volatile geopolitical environment. Beyond the grinding war in Ukraine, a violent reconfiguration is underway in the Middle East, exemplified by the collapse of dictator Bashar al-Assad’s regime in Syria and Israel’s military campaigns in Gaza, Lebanon and beyond. The Sahel, too, is gripped by upheaval, with countries such as Mali and Niger enduring military rule and intra-communal brutality. Nearby Sudan is in freefall, with widespread violence having led to economic collapse, mass displacement and an escalating humanitarian crisis.

All these developments demand responses from the EU. Among other things, it must recalibrate its approach to Africa, coordinating with allies to deliver support that addresses development, security and humanitarian imperatives. And it must provide increasing support to Ukraine, both to sustain the country’s resistance against Russia and to advance the Herculean reconstruction effort that is already underway.

Such efforts will be all the more important—and more complicated—with Trump in the White House. While it is impossible to say precisely what he will do once in office—his latest panic-inducing fixation seems to be taking control of Greenland—no one should count on the United States’ commitment to support its allies. On the contrary, Trump’s promise to end the war in Ukraine immediately upon taking office augurs capitulation to Russia, underscoring the need for increased EU aid for Ukraine and rapid strengthening of Europe’s defence capacity.

The EU knows well that it must take greater responsibility for its own security: the theme of Poland’s six-month EU Council presidency, which began on January 1, is ‘Security, Europe!’ But if this is to be more than a slogan, the EU will have to boost investment in research and development, pursue strategies to foster innovation and enhance collaboration among member states.

Such initiatives can also bolster EU efforts to tackle declining economic competitiveness at a time when aging populations are straining public budgets and impeding productivity growth in many countries. Stimulating investment in advanced sectors such as artificial intelligence, defence and green energy is essential, particularly given the additional economic strain on the EU implied by the import tariffs that Trump is threatening to introduce.

What the EU must not do is resort to indiscriminate protectionism—including against China. In fact, the EU needs a China strategy that prevents it from being swept into an all-encompassing confrontation and strikes a balance between maintaining mutually beneficial relations, preserving foundational alliances and defending the international order from attempts to destabilise it.

But external developments are just part of the challenge. Internally, Europe is grappling with widespread democratic erosion. While Hungary stands at the vanguard of this trend, it is hardly alone: even France and Germany—the traditional engines of EU integration—appear to be at risk of democratic backsliding. Trump crony Elon Musk is not helping matters, as he backs far-right parties like Alternative fur Deutschland.

There is also considerable disagreement among member states on a range of issues, from the trade deal with Mercosur, which was agreed in principle last month, to threat assessments regarding the Ukraine war. Whereas Poland remains adamant that the war must end with a return to the recognised borders, France is now urging Ukraine to engage in ‘realistic discussions on territorial issues.’ Meanwhile, Slovakia’s Kremlin-friendly prime minister is threatening to cut financial support for Ukrainian refugees in his country.

EU enlargement is another source of tension. Since Russia’s full-scale invasion of Ukraine in 2022, the EU has opened accession talks with Bosnia and Herzegovina, Moldova and Ukraine, and granted Georgia candidate-country status. But the hasty addition of new members would only undermine cohesion and compound decision-making inefficiencies. A clear, realistic methodology for accession based on objective criteria is badly needed, as is a sober assessment of whether each candidate can be integrated effectively into the EU’s structural framework.

In the meantime, practical measures and de facto agreements can deepen the EU’s ties with prospective member states and bolster their progress toward accession. Ukraine’s integration into the EU’s mobile-roaming network and trade agreements, and the synchronisation of its electricity grid with the Continental European Network, offer a useful model.

A final imperative for the EU in 2025 is to reform its institutional structures and decision-making processes. This must include a review of the ideologically-driven regulations contained in current legislation—the European Green Deal at the centre of Ursula von der Leyen’s first mandate is a prime example—and efforts to improve transparency, accountability and efficiency within European institutions, thereby enhancing their responsiveness and reliability. Fostering greater engagement with citizens through clear, open communication from Brussels, along with citizen-driven initiatives, would also help to strengthen the EU’s legitimacy and resilience. Progress on any of these fronts will require considerable political resolve from lawmakers in Brussels.

How the EU navigates this complex array of internal and external challenges over the next year will determine its future as a global actor. One hopes that pragmatism, unity and long-term thinking prevail in 2025.

Trump’s inaugural speech: the clues in what he said—and didn’t say

The global security implications of Donald Trump’s inauguration speech can be best summed up by two quotes that bookended his 30-minute remarks.

The first was an emphasis on his familiar ‘America First’ philosophy. Literally three sentences beyond the requisite acknowledgements, Trump said: ‘We will not allow ourselves to be taken advantage of any longer. During every single day of the Trump administration, I will very simply put America first.’

Then in the final minute of the speech, Trump said: ‘We will be a nation like no other, full of compassion, courage and exceptionalism. Our power will stop all wars, bring a new spirit of unity to a world that has been angry, violent and totally unpredictable.’

If the first could imply a retreat from US global engagement to concentrate on meeting its own priorities, the second indicates a continuation of an outsized role as guarantor of international security and stability. This apparent contrast could be written off as Trump saying anything and everything under the sun, but it should also be taken as a reminder that there is room in which the rest of the world can work, notably allies such as Australia.

An inaugural address is not a catalogue of policies, so we couldn’t expect it to tell us everything. But as a carefully prepared, teleprompter-read speech, it’s worth dissecting what Trump said and didn’t say.

Based on what we know of Trump’s wider views, the difference between a less engaged and a more engaged US will involve greater burden-sharing for allies. Those that take their security as seriously as the US does, and don’t assume the Americans will ride to the rescue, will get a better hearing. Persuading Trump that you are not taking advantage of US idealism is the number one reference point for other governments. That might happen through defence investment, as with wealthy countries such as Australia or NATO members, or showing mettle in the face of bullying, as with middle income friends such as the Philippines.

As expected, the most immediate challenge Australia and others face is trade and tariffs. The most detailed example of America First that Trump outlined was on revenue-raising through tariffs, including the creation of an ‘External Revenue Service’, mirroring the Internal Revenue Service or US tax office. Tariffs will therefore be used not just to level the playing field against China’s unfair trade practices but also as a tool to raise US government revenue.

The key security focus was the southern border—the only specific security challenge he covered in any significant detail. He declared a ‘national emergency on our southern border’ and designated drug cartels as foreign terrorist organisations.

There was no mention of allies or alliances. There was no mention of Ukraine and Russia. The only mention of the Middle East was an observation that, just before his inauguration, Hamas released some Israeli hostages.

It was notable that Trump did not say much about China, given he has sent other signals that he plans to get tough on the economic and security risks that Beijing poses, whether through high tariffs or his appointment of Marco Rubio as Secretary of State.

The single reference to China was in relation to the thorny issue of the Panama Canal, which the US built but then handed over to Panamanian ownership under a 1977 treaty signed by Jimmy Carter. This fell very much into the category of the US’s being taken advantage of and representing an economic security threat, involving the unfair charging of US ships and, above all, China’s having operational control of the canal—a reference to Chinese-funded infrastructure and contracts held by a Hong Kong-based company to run the ports at either ends of the canal. These raise security concerns just as Beijing’s interest in the Pacific, or the lease of the Port of Darwin to a Chinese firm, have raised concerns in Australia.

Trump’s vow to take the canal back, along with his interest in Greenland because of its strategic value, may explain his eyebrow-raising reference to a US that ‘expands our territory’—though so could the reference to planting the flag on Mars.

Beyond the sometimes provocative rhetoric, Trump’s interest in the Panama Canal and elsewhere can be explained more as a desire to avoid the likes of China and Russia gaining control over US strategic interests, whether geographic or technological. During other inauguration events, Trump described his preferred approach to the future of TikTok as one of joint ownership that would enable the US to exert control to protect itself.

And his answer during a press conference in the Oval Office that Gaza must ‘be rebuilt in a different way’ and that the US may be willing to help suggests he recognises that while ‘not our war’, the US has an interest in ongoing involvement in the stability of the Middle East—which will also likely include countering terrorism and resuming normalisation between Israel and Saudi Arabia.

It’s his discussion of defence from which we can glean a bit more about how Trump might use American power in the world. He outlined a broad vision of a ‘peace through strength’ doctrine but with his own signature characteristics.

He vowed to build the ‘strongest military the world has ever seen’ (which the US has actually had now for at least 80 years but perhaps for the first time is being tested by a near-peer in China). Then, most tellingly, he said his administration would measure success ‘not just through the battles we win but also by the wars that we end and perhaps most importantly the wars we never get into’.

That could indicate Trump will refuse to be drawn into foreign conflicts that his predecessors might have seen as a US duty in which to intervene for the good of the world. But it could also promise a form of deterrence so effective that no one will dare risk starting a war in the first place if it might invite any kind of US involvement. That would be consistent with his—admittedly unprovable—claim that Russia would never have dared invade Ukraine on his watch.

How will China read that with respect to its ambitions towards Taiwan? Beijing’s own unprecedented peacetime military build-up is for expansionist purposes so a US choosing military superiority for deterrence is in all our interests. That said, Trump’s failure to mention Ukraine wouldn’t have gone unnoticed in Beijing.

From what we’ve known about Trump for some years now, including from his first administration, the US will look more fondly on countries that help themselves and pitch in to a shared effort. Again, not taking advantage of the US is the key reference point.

And this needs to be the number one takeaway for countries such as Australia.

Trump the revolutionary isolationist

Donald Trump has often been dismissed as a hip-shooter devoid of strategic sense or policy vision. While this assessment is not entirely off base—he is certainly an agent of anarchy—it is incomplete. For better or for worse, Trump was one of the United States’ most revolutionary presidents during his first term, and that appears likely to be true of his second.

In the Middle East, Trump initiated the normalisation of Arab-Israeli relations. The so-called Abraham Accords between Israel and the United Arab Emirates, Bahrain, Morocco and Sudan in 2020–21 laid the groundwork for an unprecedented regional security architecture. He says he will continue this process during his second term, bringing about the normalisation of diplomatic relations between Israel and Saudi Arabia.

In East Asia, Trump decisively broke from the US’s longstanding policy of engagement with China. That policy was always based on the flawed assumption that the country’s integration into the global economy would ensure that it remained a benign international actor and, eventually, lead to democratisation. Notably, outgoing President Joe Biden did not attempt to revive it. Instead, he continued on the path laid by Trump and even increased US pressure on China.

Of course, not all revolutions have merit—and some are altogether disastrous. Consider Trump’s 2018 withdrawal from the Joint Comprehensive Plan of Action that was constraining Iran’s nuclear program. It is because of that feckless decision that Iran is now closer than ever to becoming a nuclear power. Yet, Trump, the de-constructor, is also war-averse, and he would probably work for a new nuclear deal with the Islamic Republic.

As Trump begins his second term, his propensity for ruthless deal-making and wanton foreign policy disruption remains as strong as ever. For example, he seems to think that Russia’s full-scale invasion of Ukraine in 2022 vindicated his threats not to defend NATO’s European members unless they start paying more for their defence. Now, he seems bent on keeping up the pressure on the US’s European partners and negotiating a quick deal to end the Ukraine war—an outcome that will almost certainly benefit Russia above all.

In Gaza, Trump was fully prepared to unleash an even greater hell than the enclave has been enduring unless Hamas released the last of the Israeli hostages. Fortunately, the just-approved ceasefire deal between Hamas and Israel—which Trump helped to seal—means that the besieged people of Gaza might not have to find out that there are Trumpian circles of hell worse than what they are experiencing.

Add to that Trump’s recent suggestions that he would rename the Gulf of Mexico the Gulf of America, reclaim the Panama Canal, somehow takeover Greenland (perhaps even by military force) and annex Canada, and a clear message emerges. Trump believes that violating longstanding norms, abandoning or renegotiating international agreements and reconsidering alliances is the most effective way to build a global system that better serves the US’s interests—not least its interest in reducing its external obligations.

Trump subscribes to a brand of isolationism that has waxed and waned throughout US history, but has its roots in the Monroe Doctrine. In 1823, America’s fifth president, James Monroe, declared that the United States would not intervene in the affairs of European countries (or their colonies and dependencies), and warned those countries not to interfere in the western hemisphere, such as through colonisation. Any breach of this line by a European power would be viewed as a hostile act against the US.

Trump confirmed his adherence to the Monroe Doctrine in a 2018 speech at the United Nations. This position is undoubtedly linked to the US-China competition: Trump wants to deter the US’s global rival from interfering in the US’s near-abroad.

But this is precisely what China is doing. China’s ambitious strategy in Latin America and the Caribbean, as defined in a 2016 policy paper, spells out its drive to expand security cooperation throughout the region, thus representing an encroachment on the US’s immediate neighbourhood. China has also financed significant infrastructure projects, some of which are of critical strategic importance. Alarm bells also were raised in Washington about Chinese spy bases in Cuba.

Trump’s message implicitly accepts a world order based on spheres of influence, as envisioned by China and Russia. His warning last year that he would let Russia do ‘whatever the hell’ it wanted to any NATO member that failed to meet its defence-spending commitments is further evidence of his stance. So is his threat to seize control of Greenland. Not only is the resource-rich island closer to North America than it is to Europe; it is also located in the Arctic, a new frontier of strategic competition with Russia and China.

Though Denmark has controlled Greenland for centuries, the arrangement has evolved over time. The island became a Danish colony in 1721, though it was America’s 1916 declaration that Denmark could extend its control to all of Greenland that opened the way for international recognition of Danish sovereignty. Greenland became a district of Denmark in 1953 before adopting home rule in 1979 and gaining near-complete autonomy in 2009 (Denmark still controls domains like defence).

The US has long sought influence in Greenland, having established military bases there during World War II. With Trump threatening to take this effort to a new level, Greenland’s prime minister, Mute Egede, has begun calling for total independence—or, as he put it, removing the shackles of colonialism. But in an age of power politics—as seen in Ukraine, the Middle East and East Asia, and reflected in Trump’s relentlessly belligerent rhetoric—can a territory like Greenland get to decide its fate?

So far, US allies have only symbolically challenged Trump’s dangerous pronouncements. For example, in December, Danish King Frederik X updated the royal coat of arms, removing the three crowns symbolising the Kalmar Union—which comprised Denmark, Norway and Sweden, and lasted from 1397 to 1523—and making the polar bear, to represent Greenland, and the ram, for the Faroe Islands, more prominent.

Such actions will do nothing to protect Greenland should Trump press the issue. One wonders if it has become passe to expect the leader of the free world to conduct policies toward allies without recourse to intimidation and war.

Space and Australia: opportunities in the second Trump administration

Enhancing space cooperation between Australia and the United States should be a priority for Canberra in the second Trump administration. In defence terms, that could include strengthening collaboration between the US and Australia in space domain awareness and through collaboration on space control. Leveraging locally developed space capability through assured government support of Australia’s commercial space sector is also important, as is sovereign space launch to ensure space access, resilience and ultimately deterrence by denial in space.

Space is likely to be a greater priority for the incoming Trump administration than the previous Biden administration, particularly given guidance in Project 2025. First, the Trump administration will seek to get NASA’s Artemis program back on trajectory after continued delays have seen the initial goal of a lunar landing in 2024 pushed back to 2027, while promoting rapid growth of the commercial space sector. Second, expansion of the US Space Force—established by Trump in 2019—to respond to growing counterspace threats by China and Russia is highly likely, again in line with Project 2025.

Trump’s inauguration speech talked of ‘planting the US flag on Mars’, suggesting he has also endorsed Elon Musk’s SpaceX-led prioritisation of getting humans on the Martian surface as early as 2029. However, if this focus on Mars becomes the centrepiece of US space policy, it will draw the US’s attention away from the Moon, potentially handing the lead in any effort to return to the lunar surface  over to China. Trump therefore needs to delicately manage this approach, as well as Musk’s role and ambitions.

Australia supports the United States’ Artemis project and is set to send a lunar rover to the Moon by 2026. With Trump likely to fast-track Artemis, Australian commercial space companies should be supported by the government to play a larger and more visible role in Artemis. For example, Australian-built small satellites could be delivered to lunar orbit to support surface activities, taking advantage of sovereign space launch to maximise Australia’s direct role in Artemis.

In terms of space and defence, there will be new opportunities for the ADF to increase its role in space. Australia should consider how the ADF can practically support the US Space Force if it takes a more proactive approach to the mission of space control in response to Chinese and Russian anti-satellite threats. Once again, sovereign space launch can play a key role in this new mission for the ADF in space.

While Australia has embraced a more sophisticated approach to the space domain in defence policy, the Albanese government has made significant cuts to investment into space, and lacks a national space strategy to guide Australian space activities. With a federal election looming, the winning party will need to reverse that drift in space policy and clearly commit to supporting civil and defence space activities, including in collaboration with the US and other partners. That will be particularly important as the Trump administration adopts a more ambitious approach in space. Australia must step up and increase its burden-share in orbit.

On the civil side, a good place to start would be the preparation and release of a national space strategy that guides future space activities and investment as a whole-of-nation enterprise. That could also see the Australian Space Agency become a statutory agency, supported by a dedicated minister for space policy (as has been done in New Zealand).

Australia’s space policy agenda must include building greater opportunities for small and medium enterprises, including to support international space activities such as Artemis. Sovereign space launch should play a key role, but small-satellite manufacturing and ground-based elements must also be fully supported. The goal should be an end-to-end space ecosystem that offers growth and stability to space enterprises, ending years of drift and uncertainty. That would also enable the civil and commercial space sectors to support defence requirements with locally developed capabilities.

Australia also needs continuing and closer cooperation with the US on both space domain awareness and collaboration towards developing common space control capabilities to protect Australian and US satellites in orbit. Space control will demand practical capability both on the Earth’s surface and, where necessary, in orbit to actively defend against counterspace threats. Space domain awareness is an essential starting point for space control, but practical effectors are needed to counter actual threats. Australia should support the development of such a capability, perhaps under Pillar 2 of AUKUS.

Finally, a major part of space control is assured access to space. It is important for government to support the development of sovereign space launch capabilities—both Australian launch sites and locally developed launch vehicles—to allow Australia and its allies to maintain resilient and survivable space support to terrestrial forces. The ability to rapidly deploy small satellites to augment existing capability, or reconstitute lost capability after an adversary attack, reinforces space resilience and strengthens space deterrence by denial. In the next National Defence Strategy, to be released in 2026, sovereign space launch provided by commercial companies needs to be explicitly declared as an important capability for ADF space policy.

As Trump returns, Sino-Indian relations are changing

Weeks before his return to the White House, US President-elect Donald Trump issued a pointed warning to the BRICS countries. ‘Go find another sucker’, he wrote on his social media platform, Truth Social, threatening the group’s nine members with 100 percent tariffs should they attempt to challenge the dollar’s global dominance.

Trump’s warning came on the heels of his campaign promise to impose a 25 percent tariff on imported goods from Canada and Mexico on his first day in office. China, the primary target of Trump’s protectionism, is expected to face an additional 10 percent tariff. While this is hardly surprising, given the escalating trade war between China and the United States, Trump has also directed his ire at India, a founding member of the BRICS and one of the US’s key allies.

So far, India has managed to avoid immediate conflict by reaffirming its commitment to the dollar. But such policy uncertainties are among the many reasons why the Indian government has been quietly hedging its bets by pursuing rapprochement with China—a move that could herald a seismic geopolitical shift.

The China-India thaw has become increasingly evident in recent months. In October, the two countries reached an agreement to end the years-long military standoff along their shared Himalayan border, setting the stage for a surprise meeting between Indian Prime Minister Narendra Modi and Chinese President Xi Jinping on the sidelines of the BRICS summit in Kazan, Russia. Another sign of this shift is Indian officials’ newfound interest in attracting Chinese investment.

Meanwhile, US-India relations appear to be cooling. Since a popular uprising ousted Bangladeshi Prime Minister Sheikh Hasina in August, Modi’s favoured news outlets, social-media operatives and Hindu supremacist allies have portrayed the insurrection as a CIA-orchestrated regime change. Some have even warned of similar attempts by the US deep state to destabilise India.

Modi’s ruling Bharatiya Janata Party has since embraced anti-US sentiment, accusing the US of targeting Indian tycoon Gautam Adani—a close ally of Modi charged with securities fraud and bribery in the US—in an effort to undermine the Indian government. Such rhetoric, a stark departure from decades of strategic cooperation, evokes memories of the Cold War, when a nominally nonaligned India, wary of US interference, gravitated toward the Soviet Union.

This shift is driven by several factors, primarily the US’s diminishing ability and willingness to act as a global leader, along with China and India’s attempts to strengthen their bargaining position. With deglobalisation reshaping the world economy, the US has less to offer countries like India, which do not entirely rely on it for defence.

By contrast, China’s dominance in global supply chains has become impossible to ignore. As the world’s manufacturing superpower—producing more than the next nine largest manufacturers combined—China could support India’s efforts to expand its own industrial base. The government’s annual economic survey highlighted this imperative, stating that ‘to boost Indian manufacturing and plug India into the global supply chain’, the country must ‘plug itself into China’s supply chain.’ To this end, the report advocated a pragmatic approach focused on attracting Chinese foreign direct investment (FDI).

Such unequivocal government support for cooperation with China was once unthinkable in India, which has maintained adversarial relations with its neighbour since the 1962 Sino-Indian War. After 20 Indian soldiers were killed in border clashes in India’s Ladakh region in 2020, India responded by imposing sweeping restrictions on investments and imports from China, limiting executive visas, and banning Chinese apps. But these measures resulted in massive losses for Indian businesses reliant on Chinese imports. Worse, they deprived India of critical Chinese investments at a time when FDI inflows were already declining.

As global supply chains shift away from China, Chinese manufacturers are also relocating, establishing bases in countries that stand to benefit from the West’s friendshoring and nearshoring strategies. Chinese investments in greenfield projects tripled year on year in 2023, to US$160 billion, with much of these flows going to countries like Vietnam, Indonesia, Hungary and Serbia. India, grappling with jobless growth and high youth unemployment, is eager to capitalise on this trend.

The US, once a major source of FDI, is now competing with India for investment as it seeks to boost domestic manufacturing. This competition, which is expected to intensify under Trump, has prompted India to approve several investment proposals and offer concessions—including expedited visas—to Chinese businesses and executives.

India’s course correction aligns closely with China’s interests, as the country’s economic slowdown has piqued Chinese firms’ interest in India’s rapidly growing market. India is projected to become the world’s third-largest economy by the end of this decade and deeper engagement with it would provide China with a major buffer against US efforts to contain its geopolitical rise.

Moreover, while global attention remains focused on the escalating tariff war between the US and China, India faces significant risks of its own. Trump, who has repeatedly labelled India a very big abuser of tariffs, had revoked its preferential trade status during his first term, raising the likelihood of further punitive measures.

To be sure, India—designated by the US as a major defense partner—is unlikely to abandon its strategic relationship with the US for closer ties with China. But like other emerging powers in the Global South, India is increasingly frustrated with the inherent asymmetry of the US-led liberal international order, particularly the dollar’s hegemony.

These frictions are also fuelled by the US’s occasional rebukes of India’s treatment of minorities. Having systematically weakened democratic institutions and tightened control over the media, Modi’s government bristles at any international criticism. Fortunately for Modi, such differences may resolve themselves. After all, it’s hard to imagine Trump being overly concerned by India’s ties to Russia, anti-Muslim policies or democratic backsliding.

Still, as Modi steps up his efforts to transform India into a Hindu state, he may want to secure America’s support by signalling that he has alternatives. In that sense, India’s overtures to China could be viewed as a geopolitical manoeuvre aimed at enabling India to tell Trump to ‘go find another sucker’ should he decide to play hardball.

Donald Trump, Jon Voight and the paths to transformation or upheaval

At a breakfast meeting in a well-known restaurant a stone’s throw from the White House on Saturday, I noticed the veteran actor and Oscar-winner Jon Voight across the room. Two days out from Donald Trump’s inauguration, the incoming President’s newly minted ‘Ambassador’ to Hollywood was no doubt in town for the big occasion of Trump’s return to the Oval Office.

As I made eye contact with Voight and got a smile in return, the moment encapsulated for me the remarkable situation we’re living through: the transformation of US politics and the study in contrasts that Trump’s return to the presidency represents, with a mix of familiar faces and new allies in tow.

The pre-inauguration weekend in Washington exemplifies great American traditions: NFL playoffs, biting winter weather, and gatherings of friends and family either celebrating or commiserating over the incoming president. But this year, the atmosphere in DC carries a unique tension after a week of confirmation hearings ranging from the mundane to the bizarre.

Voight is a case in point: a rare movie star who is comfortable among the Republican elite, the MAGA hats and the Trump paraphernalia dotting the wintery landscape outside, but who has also attracted controversy for comparing ‘leftists’ to Satan. The mere fact of appointing special envoys to Hollywood—the others being Sylvester Stallone and Mel Gibson—shows Trump’s extraordinary approach to transforming even sections of the nation that have generally viewed him with scepticism or antipathy.

On the one hand, the administration’s statements promise disruption to bureaucratic inertia—the very reason a majority of Americans voted for Trump and a recognition that widespread global tensions and conflict mean a business-as-usual approach is totally inadequate. On the other, some pronouncements have caused sharp intakes of breath among Washington’s politically attuned population, who watch with a mix of fascination and dread, unable to look away from what they fear might become a slow-motion train wreck or a fast-paced wrecking ball. This duality—the potential for both transformative change and concerning upheaval—defines Trump’s leadership style.

My morning meeting with an Australian venture capitalist focused on the future of AUKUS under Trump’s second term. Despite the uncertainties that come with any administration change, the mood was surprisingly optimistic. The sense is that AUKUS—the trilateral security pact between Australia, Britain and the US—still holds the promise we’ve hoped for. There’s a prevailing belief that under Trump, capital markets will surge, potentially accelerating the defense technology collaboration that underpins the agreement.

Walking around after my meeting and close encounter with a Hollywood star, I could see the extent to which the capital has transformed in preparation for the inauguration. Downtown Washington, locked down for security, has taken on the air of a Republican stronghold. The traditional pre-inauguration ‘People’s March’ forming in Farragut Square, usually a robust demonstration, appeared subdued and diminished—a visible sign of the shifting political winds.

Mother Nature, however, has her own plans for the inauguration. An Arctic front will bring the coldest temperatures in decades, forcing the ceremony indoors to the Capitol rotunda. This weather-induced change may be a blessing in disguise, rendering moot any potential debates about crowd size—a contentious point from Trump’s first inauguration. The limited capacity of the indoor venue will naturally constrain attendance, despite the million-plus supporters and observers who flocked to DC to attend.

I’m acutely aware of the unique responsibility that a think tank such as ASPI has in Washington. We serve as a bridge, injecting Australian and regional perspectives into American national security and defense discussions. Our mission isn’t to influence but to inform and diversify the debate while providing crucial insights back to the Australian people about policies that will affect our region.

This mission has become more complex with the recent defunding of our Washington office by the Australian government. Yet the importance of our work hasn’t diminished. If anything, in these uncertain times, the need for clear-eyed analysis and regional perspective has only grown.

Looking ahead to Trump’s second term, I find myself holding mixed emotions: hope tempered by trepidation, optimism checked by concern. But above all, I’m grateful to be here at this pivotal moment, positioned to contribute unique insights that few others can provide. As the world watches America’s political transition, the view from Down Under in Washington offers a valuable perspective on this historic moment and its implications for the Indo-Pacific region.

In these early days of Trump’s return to power, one thing is certain: the dynamic and unpredictable nature of his approach will continue to challenge conventional wisdom and traditional diplomatic frameworks. For those of us working in Washington to strengthen international partnerships, the task ahead is clear—to navigate this new landscape while maintaining the robust alliance relationships that have long served both American and Australian interests.