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Investor's Crypto Daily > Blog > Headlines > Economy > Economic News > The world is preparing for another Trump Presidency
Economic News

The world is preparing for another Trump Presidency

Last updated: December 25, 2024 6:16 pm
By Michelle Whelan 11 Min Read
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As Bob Dylan predicted in his They’re A-Changin the world’s political landscape is undergoing a sea change as Donald Trump gets ready to take the White House again in 2025. This will trigger a wave of unprecedented diplomatic repositioning around the globe.

Contents
European allies plan 40,000-strong peacekeeping force amid uncertaintyThe military aid gap shows a 45% dependency on non-EU EquipmentSaudi Arabia is pursuing a 60% rise in Chinese trade as part of the Middle Eastern realignmentIsrael announces major shift in policy with West Bank Annexation PlansChina takes the lead amid US threat of tariffs up to 50%As Ukraine’s support wanes, European nations are faced with strategic decisionsDefence industry capacity shortages of 65%Trump announces possible Iran talks amid tensions in the regionFuture scenarios and global implicationsThe early days following Trump’s return are crucial

Dylan released his song in 1964 during a time of upheavals, social struggles and civil rights battles, as well as anti-establishment movement.

The echoes from Dylan’s songs are still heard today as the world is characterized by political realignments and economic uncertainties, along with shifting alliances around the globe.

As Dylan asked senators and Congressmen to “please listen,” leaders today are faced with increasing populism and geopolitical tensions, as well as public demands for systemic changes.

Trump, in his Oval Office as the heartbeat of the world’s liberal order, challenges every aspect of it – migration, trade, allies, multilateralism and democratic solidarity, human rights, democracy, etc.

The world is recalibrating its policies in order to counterbalance or align their strategies with US ones, reflecting Dylan’s timeless statement that “the wheel is still spinning.”

Trump has admitted that these events are unprecedented. He said in Paris recently, “the world is going crazy.”

European allies plan 40,000-strong peacekeeping force amid uncertainty

The European Union is quietly developing plans to create a peacekeeping force of 40,000 soldiers in Ukraine. This could be one of the biggest restructurings for European security since NATO was formed.

The initiative spearheaded by Poland and Germany is the first attempt at creating a European Security Framework independent from US leadership.

In the plan, which is based on Korea’s post-war division, troops will be stationed along an eventual demarcation in Ukraine.

The key architects of this initiative include the Polish PM Donald Tusk and future German Chancellor Friedrich Merz. They have met privately in order to coordinate.

Mark Rutte’s statement, “The pragmatic approach European Leaders are taking is captured by the new NATO chief Mark Rutte.”

The dance floor is open to everyone.

The sentiment is a reflection of the delicate balance that European leaders have to strike between developing their own security capabilities and maintaining transatlantic ties.

The military aid gap shows a 45% dependency on non-EU Equipment

Josep Borrell, the outgoing EU Foreign Service head who is responsible for assessing defense capability in the EU, revealed some troubling stats.

Borrell claims that 45% of the military equipment supplied to Ukraine by EU countries originated outside of the EU, showing a dependency on suppliers from abroad.

Borrell’s candid evaluation of the current situation stated, “I begged for arms.”

The EU bureaucracy is so slow that it takes three months to get one million ammunition rounds.

The disparity between the US and Europe has led to serious concerns about Europe’s capacity to provide Ukraine with support without US aid.

Saudi Arabia is pursuing a 60% rise in Chinese trade as part of the Middle Eastern realignment

Saudi Arabia is leading the way in a pivot from relying solely on US guarantees of security to a more strategic approach.

While simultaneously working to normalize relations with Iran, the kingdom has increased its engagement in China. It aims for a 60% rise in bilateral trade.

The recent warming in relations between the Kingdom and Israel is marked by Crown Prince Mohammed Bin Salman’s description that Israeli action against Gaza was “genocide”.

Saudi diplomats explicitly declared that normalization of relations with Israel was “off the table” without a path to a Palestinian State, effectively halting the Abraham Accords.

Israel announces major shift in policy with West Bank Annexation Plans

Bezalel Schmotrich, a cabinet member in Israel’s government, made the shocking announcement “2025 is the year that Israel will have sovereignty over Judea-Samaria.”

The timing of this declaration is significant. It comes within one week after the US elections. This could signal plans to annex West Bank that previously were considered impossible diplomatically.

This announcement coincides with Netanyahu’s claim that he had three conversations post-election with Trump during which they said, “We see eye to eye regarding the Iranian threat.”

The alignment between the leadership of Israel and America has caused deep concern in Gulf States and could complicate regional diplomacy efforts.

China takes the lead amid US threat of tariffs up to 50%

Beijing launched an elaborate diplomatic campaign in order to portray itself as a stabilizing power, compared to the perceived unpredictability of Trump’s US.

China, despite the possibility of tariffs up to 50%, is actively marketing itself as an ally committed to green energy and free trade, especially in Europe.

Trump has threatened to impose tariffs of 100% on BRICS nations if they try to replace US dollars as the world reserve currency.

China has paradoxically benefited from this aggressive approach, as it is now able to portray itself more predictably to developing countries looking for alternatives to the US financial system.

As Ukraine’s support wanes, European nations are faced with strategic decisions

Faced with declining US support, European leaders face unprecedented challenges in deciding the future of Ukraine.

Volodymyr Zelenskyy’s proposal of a ceasefire represents a major shift in strategy. It focuses on diplomatic means rather than military ones to recover territory that has been lost since 2014.

This proposal, along with the request to join NATO immediately for any remaining Ukrainian territory, shows that there is growing doubt about US support.

NATO leaders, Rutte included, have rejected the proposal. They claim that under current conditions, neither Russia, nor the US, would allow Ukraine to join NATO.

The rejection of the US-backed sanctions on Ukraine highlights the difficult calculations that European leaders have to make when balancing their support for Ukraine with their security and relationships with the United States.

Defence industry capacity shortages of 65%

Borrell’s study revealed that the European defense industry base is a critical weakness. It shows a capacity gap of 65% in order to meet current military needs.

The EU has been severely limited in its ability to provide military support to Ukraine. This limitation also raises serious concerns about Europe’s independence from US assistance.

Bureaucratic delays, and the lack of coordination among EU members states complicate matters.

Even with substantial investment and political commitment, industry experts believe it will take 3 to 5 years for the production capacity needed.

Trump announces possible Iran talks amid tensions in the region

Trump’s tough rhetoric during the campaign has been surprising in its openness towards negotiations with Iran. He revealed that, had he won, he would have made a deal within a week of winning.

The suggestion that Middle Eastern politics should be approached with a nuanced perspective has caused both confusion and opportunities in the regional diplomatic community.

It is of particular importance that US and Iran could hold negotiations, given the regional realignment taking place in the Middle East.

Saudi Arabia normalizing its relations with Iran, and China’s increasing influence in the area creates a complicated diplomatic climate that can either help or hinder potential US-Iran negotiations.

Future scenarios and global implications

Trump’s return to the international scene has created new alliances and patterns of cooperation which could last beyond his presidency.

Middle Eastern nations pursue a multi-directional diplomatic approach to counteract the uncertainty of US policy.

The shifts in power suggest that the global dynamics of power may be permanently altered, as traditional US allies seek greater autonomy and new partnership models.

Success of these initiatives depends on the implementation they receive during Trump’s presidency, and also their capacity to produce alternative economic and security arrangements that are sustainable.

LSE Professor Fawaz Gérards provides an assessment of the current situation.

Saudi Arabia is a major Middle Eastern power that depends on the US. It has diversified its foreign policy and deepened its relationship with China, while normalizing relations with Iran.

The early days following Trump’s return are crucial

In the coming months, it will be critical to determine whether or not these preparations lead to lasting changes of international order.

As Trump takes office, European defense efforts, Middle Eastern diplomatic realignments and China’s position as a reliable alternative partner are all going to be put through their paces.

Success or failure in these initiatives will determine whether Trump’s presidency is a temporary interruption of the post-World War II order, or a permanent shift towards a global power structure.

It is especially important for the traditional US allies to balance historical relationships and other partnerships with their need to build independent capabilities.

As new information becomes available, this post may change.

This site is for entertainment only. Click here to read more

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