November 25, 2024No Comments

The Impacts of Trump Presidency on Global Economic Relations

by Miguel Jiménez, Ingrid Heggstad, & Dan Ziebarth - Political Economy, Development, & Energy Security Team

Introduction

It was announced on Tuesday, November 5th that Donald Trump, the candidate for the right-wing Republican Party, had won the 2024 Presidential Election in the United States of America and would officially become the President-Elect. Kamala Harris, the left-wing Democratic Party candidate, conceded defeat in a speech on Wednesday, December 6th, urging voters to accept the election results. While Harris and her vice presidential running mate, Time Walz, received significant party support ahead of the election and were seen as a new phase for the Democratic Party, the party will be weakened following the election results. Even though during the campaign she lacked a compelling economic narrative and often avoided answering how to fund  any proposal she brought to the table, in terms of global economic relations, a Harris presidency was expected to maintain continuity with the current Biden administration's approach largely.

The second Trump presidency is expected to have major ramifications for global politics, particularly global economic relations, particularly as Trump has been a vocal proponent of protectionist trade policies. The Republican Party, led by Trump, will also control both chambers of the legislature, while conservative justices make up 6 of the 9 seats on the Supreme Court of the United States. These conditions could give Trump a strong mandate for policy change. In particular, economic relations with China, the European Union, and Russia are expected to be affected by a second Trump presidency.

China

Trump has announced that, if re-elected, he will impose a 10–20 per cent across-the-board tariff on imports into the United States, with an additional 60 per cent tariff on all imports from China. Trump has also pledged to terminate the Inflation Reduction Act (IRA) passed by the Biden administration, which would be expected to increase domestic production and reduce Chinese imports. This is in contrast to what would have been expected under a Kamala Harris administration, where the usage of tools to inhibit the arrival of Chinese goods would have come from domestic policies with the continuation of the Inflation Reduction Act (IRA), the single largest climate investment in American history. Based on building domestic champions in the field of energy transition, which is currently dominated by China, being the world’s leader in clean energy production and the refinement of the majority of mineral inputs

European Union

The second Trump presidency could challenge Europe through an “America First” trade policy, focused on reducing the U.S. trade deficit, with tariffs as high as 20 per cent on imports and even more on Chinese goods. These tariffs would increase costs for European exporters and consumers, impacting the EU’s economy. Ongoing disputes from the Biden era, such as steel and aluminium tariffs and green subsidies, may also escalate, while the expiration of paused EU retaliatory tariffs in 2025 and the Airbus-Boeing subsidy conflict in 2026 could further strain EU-U.S. trade relations, adding to Europe’s economic uncertainty. It is noteworthy that during his tenure as president, Donald Trump's imposition of tariffs on steel and aluminum imports from the European Union and China resulted in the implementation of retaliatory tariffs on U.S. agricultural products.

Russia

A renewed Trump presidency could also impact global economic relations with Russia. In his 2024 campaign, Trump promised to swiftly resolve the Ukraine conflict, asserting he could achieve peace within 24 hours through negotiation.  However, if Russia resists a settlement, Trump has signalled he would impose tougher economic sanctions, potentially targeting Russia’s central bank and curtailing energy exports to key markets like India and China. This intensified economic pressure, coupled with increased US energy production to lower global prices, would squeeze Russia’s vital oil revenue. 

Additionally, Trump’s scepticism toward ongoing US aid to Ukraine, which has amounted to $92.7 billion since 2022, raises concerns over a potential reduction in support, which could compromise Ukraine’s defence and shift the regional balance in Russia’s favour. Trump has also suggested that Europe should shoulder more responsibility for its security, which may lead to a reevaluation of US commitments to NATO. It is possible that a reduction in the US role in NATO could have the effect of weakening collective defenses, which might in turn expose Europe to greater tensions with Russia. This approach indicates a shift toward a more isolationist US foreign policy, with strategic economic measures as leverage to influence Russia's actions.

Source: Wikimedia Commons.

Additionally, Trump’s expected policies in oil and gas could intensify competition with Russia and reshape global energy markets. Russian oligarch Oleg Deripaska has predicted that Trump’s support for US oil production might drive global prices down to around $50 per barrel by 2025, creating pressure on Russia’s oil-dependent economy. Trump’s approach would likely include promoting US LNG exports, reviving paused projects, and further challenging Russia’s position in Europe’s energy market. 

His stance on projects like the Nord Stream 2 pipeline, which he previously sanctioned to limit Russia’s influence, suggests he might continue efforts to curb Russia’s global LNG ambitions while supporting policies to maintain affordable oil prices for US consumers. By influencing OPEC+ to stabilise prices favourable to the US, Trump could further impact Russia’s revenue, potentially reducing its leverage in Europe and heightening competition in the global energy sector.

Conclusion

Taken together, based upon a previous presidency led by Donald Trump and his recent claims on the campaign trail, global economic relations could become increasingly tense between the United States and other nations and political unions.

In particular, trade relations between China and the United States are expected to worsen, with major increases in tariffs on Chinese goods entering into the United States possibly leading to retaliatory tariffs and an intensification of trade competition between the two countries. The European Union could also be affected by the competition between the United States and China, as well as the possibility of increased tariffs on goods from the EU going into the United States. The conflict in Ukraine also casts a shadow over Trump’s second term and whether the Trump administration continues to provide funding to Ukraine and keep sanctions on Russia in place will affect both the war in Ukraine, as well as economic relations between the United States and Russia.

These considerations will all have ripple effects across the entire world, meaning it is important for policymakers, scholars, and citizens alike to continue watching the effects of the second Trump presidency on global economic relations. 

November 18, 2024No Comments

After the Vote: How the 2024 U.S. Election Will Reshape the World

In this timely and thought-provoking discussion, Cristina Ramirez and Gesine Weber, PhD Candidates at King's College London, break down the 2024 US elections and their wide-reaching implications. From domestic shifts to global challenges, their insights are not to be missed.

In doing so, our special guests, moderated by our researcher and Webinar Series leader, Carlotta Rinaudo, will attempt to analyse the situation by answering the following questions:

Agenda: 

00:00 -02:45 Opening remarks and Presentation by Carlotta Rinaudo (Lead of the ITSS Webinar Series)

02:48 What does Trump's return to power reveal about American society and identity? Have we misunderstood his appeal to American voters?

12:00 Is this the era of a new establishment? and if so, what might be its implications for policymaking?

15:18 Are democratic values eroding, and what could his transactional foreign policy mean for the world? Can we expect a rapid peace deal in the Russia-Ukraine war? How could a new Trump administration reshape relations with the EU, China, or impact the war in Gaza?

23:38  Q&A session

50:00 Closing Remarks by Carlotta Rinaudo

Speakers: 

 Cristina Ramirez, (King’s College London)

Gesine Weber, (King’s College London)

Don't miss out - click to watch now!

March 13, 2023No Comments

Prof. Inderjeet Parmar on the US and the world in 2023

Prof. Inderjeet Parmar talks about the United States domestic and foreign policy in 2023. Parmar is a professor of international politics at the City, University of London, and co-editor of the book series "Routledge Studies in US Foreign Policy".

In this session, he discusses the future of the Republican Party and former President Trump heading towards the 2024 elections, before shifting the focus overseas. The main issues addressed are American interests in the Indo-Pacific, including discussions on India, QUAD, and Taiwan, the Ukraine war and its impact on the international order, and the special relationship between the US and the UK.

Interviewers: Giovanni Luca Catucci and Anurag Mishra - US Team

October 22, 2021No Comments

Opening and Evacuating Embassies: A European perspective on recent events

By: Isabelle Despicht, Rosa Maria Torraco.

Embassies are much more than just a mere foreign praesidium; their openings, closings, evacuations have a strong potential effect on world politics. Image source: https://unsplash.com/photos/tI_DEyjWOkY

What role do embassies play in major events nowadays? When do countries consider opening, evacuating or temporarily closing embassies? These are some of the questions that arise when we consider global events such as the U.S. moving the capital of Israel from Tel Aviv to Jerusalem, and also when analysing the recent crisis in Afghanistan.

In order to answer them, we met with Boy Frank, a former diplomat with 34 years of experience in the Dutch foreign service, during which he worked in the opening of three embassies and the evacuation of the same number.

Embassies in a nutshell 

Generally, we think of embassies as mere foreign praesidiums in a country. However, they play a much more significant role, as they help us communicate, find refuge, and especially establish a medium between two countries.

But opening an embassy in a specific country or even city is much more than just opening a new access point. An embassy is used as a base for economic relationships, and is a necessary instrument to waive a country’s presence on the ground. Mr Frank explains that ‘’when determining where to open an embassy all factors are carefully weighted’’. Embassies will be opened in those countries that are the most relevant economically, politically or culturally. 

Just as embassies can be opened, they can be closed, evacuated, and their personnel can be called back for consultation. This was recently the case with the French president Emmanuel Macron, who called back his Ambassadors to the United States (US) and Australia after the latter cancelled its purchase of French submarinesand  announced a new contract with the US. 

Such moves have a political weight, and rightly so. The act of recalling Ambassadors was a way for France to underline its discontent with Australia’s move. By the same token, Trump's decision to move the American Embassy from Tel Aviv to Jerusalem through which he took sides in the ongoing Israeli-Palestinian conflict.

Also in times of pandemic, embassies come to play an important role. While most of those we know were functioning on high alert, tasked to inform the public about the situation surrounding Covid-19, many embassies situated in North Korea’s capital Pyongyang were temporarily closed due to restricted access to essential goods. European countries such as France, Germany and the United Kingdom temporarily closed their missions, as opposed to Russia: proof that although closing an embassy or calling back its personnel can be a political move, it can also be the result of a humanitarian emergency.

Trump’s controversial move: from Tel Aviv to Jerusalem

International custom dictates that a country has to place a diplomatic representation in a country's capital. However, as the status of Jerusalem is considered one of the greatest disputes in International Law as both Israelis and Palestinians claim sovereignty over the city. Nevertheless, on the 6 of December 2017, Trump announced that he would move the U.S. embassy from Tel Aviv to Jerusalem, thus changing de facto Israel’s capital city.

During the opening ceremony of Jerusalem’s embassy, Trump said: “Our greatest hope is for peace”. Still, as Mr Frank states, it appears evident that this was a unilateral move by which the U.S. took sides in favour of Israel. Pro Israeli politicians in the U.S  had long been pressuring Washington to move the Embassy to Jerusalem. In 2017 Trump maintained the promise he made during his 2016 presidential campaign, where he used the argument of moving the embassy from Tel Aviv to Jerusalem as one of the main points in his race for the White House.

The major European powers did not take long to distance themselves from Trump’s decision. Indeed, the European Union (EU)’s High Representative for Foreign Affairs and Security Policy (HR/VP) reiterated that the EU would continue to respect the international consensus on Jerusalem's status. The European Parliament has always favoured the two-states solution, in which Jerusalem would serve as the capital of both Israel and Palestine.

In spite thereof, European institutions did not seem to reflect the position of every European country: recently, Hungary and the Czech Republic have opened a diplomatic mission in Jerusalem, underlining the friendly relationship with Israel, destined to change the political dynamics of the region. 

As Mr Frank suggests, this case demonstrates that the U.S. has the ability to affect and influence the development of international geopolitics, just as it recently happened with the withdrawal of its troops from Afghanistan. This resulted in the arrival of the Taliban and the evacuation of its capital, which Joe Biden called “the largest airlift in U.S. history”.

Evacuation of Kabul’s Embassies: what went wrong?

When in April, the U.S. announced that it would be withdrawing its troops from Afghanistan by 11 of September 2021, many feared the arrival of the Taliban, although no one was prepared for what was about to happen.

In mid-August, the capital of Kabul was taken over by the Taliban, creating immense chaos that led to the evacuation of both civilians and diplomats, who desperately tried to reach the airport in an attempt to flee the country.

More than a month after this international incident, we asked Mr Frank what went wrong in Kabul’s evacuation and what could have been done better from a European perspective. He explains that: ‘’people waited too long to evacuate. They let the crisis unfold, and it got too intense to plan for a proper evacuation.’’

Indeed, the time at which the Taliban arrived in Kabul was highly underestimated, which only contributed to the emergency of the situation. So this bears the question: are European embassies sufficiently prepared for these types of circumstances? 

How could they not be prepared? In the interview, the former diplomat points out that, in theory, each embassy has an evacuation plan. Still, because there are always-changing scenarios, the circumstances remain unpredictable, and embassy evacuation plans are thus limited to the most likely scenarios.

One could ask, why a plan if they cannot apply it? Embassies do so to ensure the highest chances of safety, which is what they come down to in times of hardship. But while many of those located in Kabul and their staff warned their home countries about the situation and the arrival of the Taliban, EU countries were scrambling to send rescue

Today the respective Foreign Affairs departments of each state have audit teams, which are in turn responsible for identifying gaps and proposing improvements for incidents such as the one in Kabul. We can only hope that the international community will learn from this political and humanitarian disaster.

Conclusion

As we have seen, it seems that most of the major events of our time, from the Israeli-Palestinian conflict to the Afghan Crisis, can be read in the key of embassies’ openings and movements. Today embassies are not just a medium between two states; they play a leading role in developing economic, political and cultural relations and are symbolic in acknowledging and recognizing a state. 

If you are interested in learning more about opening and closing embassies, our interviewee, Mr Frank, provides Masterclasses on the topic. He has also recently published his first book, ‘’The adventures of Boy Frank’’ where he talks about his diplomatic experience in several countries, including Pakistan, Algeria, Eritrea, Angola and many others.