Moneycontrol Pro Weekender | The Year the Old Order Shattered

Trump is nothing but a symptom of the systemic pressures that had been building for years within the Western economic model

Dear Reader,

The year drawing to a close has unquestionably been Donald Trump’s year. No other person or event comes even remotely close to Trump’s domination of the headlines.

Who would have dreamed, even a year ago, that Trump’s steep tariffs would be the highest in a century? Who would have thought that the US would turn against its closest ally — Europe — accusing them of ‘civilisational erasure’? Who could have imagined Trump’s cosying up to Russia?

We have chimed in about Trump regularly, and this week we had this FT story about how he is shifting America back from shareholder to managerial capitalism.

Love him or hate him, we have often been rendered slack-jawed at his posts on social media. Consider this recent one: “There has never been a President that has worked as hard as me! My hours are the longest, and my results are among the best. I’ve stopped Eight Wars, saving many millions of lives in the process, created the Greatest Economy in the History of our Country, brought Business back into the United States at levels never seen before, rebuilt our Military, created the Largest Tax Cuts and Regulation Cuts, EVER, closed our open and very dangerous Southern Border, when previous Administrations were unable to do so, and created an “aura” around the United States of America that has led every Country in the World to respect us more than ever before. In addition to all of that, I go out of my way to do long, thorough, and very boring Medical Examinations at the Great Walter Reed National Military Medical Center, seen and supervised by top doctors, all of whom have given me PERFECT Marks — Some have even said they have never seen such Strong Results.” The hyperbole would be comical if it weren't coming from the world's most powerful office.

The US is the world’s largest economy at market prices and militarily the strongest by far. Whatever Trump does — his tariffs, his clampdown on immigration, his insistence that other countries follow his rules — affects countries across the globe. The fig leaf of diplomacy that guided international relations has been thrown away, to reveal the ugly truth beneath — that might is right. We wrote here about the US’s new national security strategy.

For India, the change has been particularly wrenching. Our earlier belief that we counted as an essential counterweight to China, that all nations would woo our rising economic clout, has been brutally brought down to earth.

It’s not all Trump’s fault, though. The preceding liberal international order sowed the seeds of its own destruction. Decades of globalisation generated immense wealth, but concentrated its benefits within elite enclaves, creating fertile ground for populist backlash. Trump is nothing but a symptom of the systemic pressures that had been building for years within the Western economic model.

This populist backlash, however, intersects with a deeper structural shift: the rise of China as a strategic challenger. This triggered alarm in Washington, and Trump’s policies are aimed at preserving US hegemony. From tariffs to reshoring supply chains to sanctions, his policies can thus be seen as a blunt, transactional form of economic statecraft. The goal is no longer to maximise efficiency through open markets, but to secure national advantage and wield economic tools as instruments of coercion, with Trump simply pursuing this logic in its most unabashed form. This week, we published articles about the China threat here and here and here.

Some would argue that the US has always believed itself to be above the rest. But at least there were some rules, albeit imperfect ones, and nations had to invent excuses for not complying with them. The message now: such apologetics are not for the powerful. There used to be a belief that all nations must have a fair shot at development. No longer — less developed countries can’t claim any favours. Recently, on a UN resolution to adopt December 14 as the International Day against Colonialism, only two nations — the US and Israel — voted against it. We are back to the no-holds-barred Great Power rivalry of the 19^th century, this time with nuclear weapons and missiles.

But despite all these unsettling changes, the MSCI All-Country World Index, as on December 11, was up 20.7 percent year-to-date in dollar terms. The S&P 500 was at an all-time high. Of course, the AI boom has a lot to do with that, and we had a clutch of insights about AI this week here and here, while in this FT article, Howard Marks asks whether it’s all a bubble.  The FT person of the year is Jensen Huang.

But the economy too has proved resilient — the Fed revised upwards its 2026 projections for US GDP growth. In its World Economic Outlook published in October, the IMF upped its global GDP growth estimate.

How are markets likely to fare in this scenario? My colleague Anubhav Sahu wrote here about what’s in store for Indian investors after the Fed rate cut while Bank of America’s Amish Shah told us that Nifty offers 12% upside on weak capex and stretched valuations.

Does 2025 then mark the beginning of a new, unsettling, dangerous period for the world? Or, will we see a dialling down of tariffs and tensions, as nations adjust to the new realities? Much depends on Donald Trump and how his supporters fare in the mid-term elections in the US.

Yet the markets seem untroubled, certain that — whether it’s Trump or anybody else — the establishment will always ride to their rescue. In this sense, the "old order" may have shattered in rhetoric and diplomacy, but its most consequential covenant — the implicit guarantee that capital will be protected — remains unbroken.

Cheers,

Manas Chakravarty

In case you missed them, here are some of the stories and insights we published this week, apart from our technical picks in the equity, commodity, and forex markets:

ICICI Pru AMC IPO, Sky Gold and Diamonds, Goldiam International, IndiGo crisis: Structural cost threat dominates outlook, NephroPlus IPO, Park Medi World IPO, IndiGo’s stock — Will it take off or stay on the ground? Can Baazar Style Retail keep growing at this strike rate? Wakefit Innovations IPO, Discovery Series | Zen Technologies,

The IPO window is wide open, but who is really winning?

As SMIDs underperform, is it time to bet on the 10 largest stocks?

How a multi-decade low rate differential deflated bond index inclusion euphoria

After a remarkable 2025 rally, can gold’s momentum continue?

Trading Psychology 101 – What makes a successful day trader?

LRS outflows surge 25x in a decade, while investments through LRS grow 8x

A hawkish ease? The Fed’s 2026 clues could shift capital from AI to emerging markets

Investors bet Fed, ECB headed in opposite directions on rates

Quick Commerce: A race to finish first or a plunge to the bottom?

New products, price hikes keep up the growth momentum for Indian pharma

Post-festive season, structural drivers for CVs get weak

Beyond GST boost, slower growth and margin threat await life insurers

Ghost Malls: An opportunity hiding in plain sight

Can Indian IT companies pull off a Netflix-style move, or is the risk too great?

Private sector is tightening its grip over India’s healthcare services market

The Two Indias: How soaring inequality is shaping markets, economy

GDP numbers show several sectors suffering from deflation

The boundless optimism of the Indian consumer

RBI will find it challenging to trounce a steep bond yield curve

Who will pay the price for the IndiGo debacle?

Why the K-shaped recovery in consumption is likely to continue

India Inc’s interest cover peaks, but the real story may be weak demand

Indigo crisis proves boards can’t protect minority investors — It’s time to rewrite the rules

Is India ready to face EU’s carbon levy from January 2026?

Pro Economic Tracker

Align safety norms with labour reforms for a better workplace

Moscow momentum for India’s maritime muscles

India's new Russia agreements hinge on Ukraine peace

India-Russia summit: Strategically diversifying global trade imprint

Startup Street | Why some startups prefer the many shades of grey

SoftBank is back! Sumer Juneja signals India investments in 2026, says ‘we don’t want to be out of the game’

More than half of our 20 million monthly active addresses are from India, says Aptos Co-founder Avery Ching

The Babri Masjid Gambit: Can a new party split Bengal's Muslim vote and hand victory to the BJP?