Trump’s chances of second term brighten, forcing world leaders to assess impact on trade, economy

On the other hand, incumbent President and Democratic Party leader Joe Biden’s presidency has floundered, with his popularity rating plummeting to an all-time low for any sitting president. Under the circumstances, Trump’s return to the White House is being seen as a certainty.

The age difference between the two leaders may not be an issue, but Trump is seen as more energetic and has been able to retain the interest of his supporters even during the past crises. Biden is 81 years old, while Trump is 77.

Biden has failed to enthuse his dwindling support base and also alienated young and first-time voters with his support for Israel against Palestinians.

The contest between Biden and Trump will begin later in the year after the preliminaries are completed. But the prospects of a Trump victory have already begun to force world leaders to assess how best to deal with such an eventuality.

Trade disruption, global impact

Most world leaders and the business community are worried about how Trump’s policies will impact global trade and the economy. In his first term from 2017 to 2021, he withdrew from major trade pacts and imposed a wide range of tariffs on Chinese exports to the US. This led to reciprocal measures by China and triggered a major trade war between the two biggest economies.

In his current campaign, Trump has called himself the “Tariff Man” and promised to impose a 10 percent tariff on imports from all countries. He also threatened to match countries that impose higher tariffs on US goods with equivalent duties. He declared that the Indo-Pacific Economic Framework for Prosperity negotiated by Biden would be “dead on day one.”

There are concerns that the US may withdraw from initiatives like COP28 to limit greenhouse emissions and deal with climate change challenges under Trump. Immigration is another area of concern in countries like Mexico. Trump has threatened to “close the border” and round up millions of “illegal aliens.”

Trump hedge

As Russia, China, and European Union members postpone major foreign policy decisions, a new term, the ‘Trump hedge,’ has entered diplomatic parlance.
Experts pointed out that Russia may have achieved its military and strategic objectives in Ukraine. But Moscow could get a better deal under Trump, who may be keen to see an early end to the war.

On the other hand, the European countries and the NATO partners are concerned about the future of the military alliance and the transatlantic partnership under Trump. In the past, Trump had been critical of NATO and refused to play the role of providing security for Europe.

In the Middle East, Trump may look for an early resolution to the ongoing conflict and encourage a rapprochement between Israel and the Arab leadership.

Relations with India

India has enjoyed bipartisan support from both Democrat and Republican presidents. Trump built up a warm relationship with Prime Minister Narendra Modi and even attended a huge rally organised for him in Gujarat.

Since the US rivalry with China is unlikely to lessen under Trump, India may continue to benefit from the strain in Sino-American ties. Modi is likely to be in a much stronger position after his possible third consecutive victory in this year’s parliamentary election.

Still, the Indian leadership may have to deal with Trump’s tough and restrictive tariffs on trade and economic policies. The US was India’s largest trade partner in 2022 and bilateral trade accounted for $191 billion. India may have to look for strong economic ties with Europe, South East Asia, and elsewhere to maintain its development and growth.