How Trump’s Potential Return to the White House Could Affect the World
The Economist Intelligence Unit, a research center based in the UK, has published an intriguing report titled “The Trump Risk Index: The Global Impact of a New American President.” From the title alone, it is clear that the British are trying to predict how Donald Trump’s return to the U.S. presidency could impact other countries. Primarily, this is a discussion of the negative consequences.
Naturally, the U.S. presidential election in November will be a major event for the global economy and geopolitics. As the report’s authors state, “We anticipate a very close race between the Democratic and Republican candidates.”
If Donald Trump, the presumed Republican candidate, returns to office, he will implement sweeping policy changes in areas ranging from trade policy to national security. The global implications of these changes mean that the consequences of a Trump presidency are worthy of detailed study.
We have developed an index to assess the impact of a Trump presidency on individual countries. The Trump Risk Index (TRI) uses quantitative metrics to evaluate the vulnerability of the U.S.’s top 70 trading partners. Our overall risk assessment is based on evaluating vulnerabilities in three areas (trade, immigration, and security), where we expect significant policy changes under Mr. Trump.
Increased Tariffs and Trade Restrictions (up to 40%): We believe Trump, with some exceptions and compensations, will pursue his stated intention to impose comprehensive tariffs on imports, proposing a flat rate of 10%, although we expect this will ultimately be reduced. Further punitive actions are likely against politically sensitive imports, such as steel.
Security Burden-Sharing (up to 40%): U.S. military assistance will become more conditional, and Trump will seek to rebalance key defense relationships. Pressure on defense allies to increase their financial and material contributions will intensify.
Tightened Border Controls and Security Measures (up to 20%): We anticipate that the Trump administration will increase funding for the border wall and other containment strategies. There will be increased efforts to deport immigrants and further restrictions on legal channels for international labor migration and training.
As noted, greater weight in the TRI was given to trade and security pillars, with less emphasis on immigration, reflecting the relative importance of these factors in determining the overall impact of these changes on a country’s economy. Most indicators are assessed relatively, such as comparisons to GDP or population size, but some are considered in absolute terms.
The top 10 U.S. trading partners include: Mexico (71.4 points), Costa Rica (59.1), Germany (52.9), the Dominican Republic (52.6), Panama (50.8), China (50.4), Japan (49.2), El Salvador (48.1), Vietnam (47.1), and Honduras (45.8). As you can see, most of the top 10 countries are from Latin America. Mexico, with its direct border with the U.S., and its exports and imports closely tied to its northern neighbor, faces additional risks, including immigration issues. The rest of Central America and the Caribbean are vulnerable due to potential restrictive measures. China, Vietnam, and Germany face risks from changes in bilateral trade patterns. However, this is already happening with China, as the Biden administration, like the Republicans, has taken a tough stance against Beijing, continuously implementing new restrictive measures.
Interestingly, Ukraine is not on the list, as if it does not depend on the U.S., at least from a security standpoint. Additionally, Ukraine is not marked on the map provided by the Economist Intelligence Unit, even though smaller European and Asian countries are included. Meanwhile, Ukraine is mentioned in the context of its potential minor impact on Russia.
Countries least affected by Trump’s reelection include: Saudi Arabia (9.4), Australia (9.7), Poland (10), Morocco (10), Greece (13.1), Oman (13.1), Finland (17.1), Russia (18.1), the Netherlands (19.9), and Croatia (20.5).
According to the sectoral analysis, the top ten countries implementing protectionist tariffs are Mexico, China, Canada, Vietnam, Germany, Japan, Taiwan, India, Ireland, and South Korea.
In the security domain, if a more isolationist policy is pursued during a potential second term for Trump, the following countries may be at risk: Costa Rica, Panama, Germany, Bulgaria, Japan, Bahrain, Ireland, Malta, Guatemala, and Estonia. Notably, Ukraine is absent even in this context. The report highlights that NATO allies in Eastern and Central Europe, such as Bulgaria, Estonia, and Latvia, received high ratings due to concerns about their vulnerability if relations between NATO and Russia escalate into open conflict. Germany, which hosts a significant number of American troops and spends a considerable portion of its GDP on defense, ranks third. Although Japan shares some similar characteristics, it is considered somewhat less vulnerable due to its high spending on American arms. Additionally, many Latin American countries, including Costa Rica and Panama, which receive U.S. military assistance but have little to no defense spending, also rank high on the vulnerability index.
Among key NATO allies (or similar nations), Australia, Finland, Greece, and Poland are considered the least vulnerable, largely due to their high defense spending and arms purchases from the United States. Oman and Saudi Arabia are important defense partners for the U.S. in the Middle East, but their capacity to effect changes under a Trump administration is limited due to their extensive military spending. Countries like India and Singapore exhibit relatively low vulnerabilities despite close military cooperation with the U.S., as they rely heavily on their own defense resources.
In addition to outlining potential consequences, the Economist Intelligence Unit also suggests measures to mitigate risks. It states, “Governments and businesses can develop strategies to reduce risks associated with the political changes likely to occur under Trump.” A potential Trump administration is expected to view Germany and Japan’s recent commitments to increase defense spending as a positive development, allowing for proactive steps to mitigate trade risks. Ensuring adequate controls to prevent the re-export of Chinese goods to the U.S. in order to avoid tariffs could help deflect one potential source of American criticism. Furthermore, government purchases of American agricultural products and energy could alleviate concerns about trade imbalances, while companies exporting politically sensitive goods, such as steel to the U.S., may consider diversifying markets to hedge against the risks of high tariffs.
The development of close relationships between leaders can also play a significant role. Trump’s first term demonstrated that his decision-making process could be influenced by interactions with other leaders. The then-Prime Minister of Japan, Shinzo Abe, was able to secure trade concessions for his country through cautious flattery of Trump.
Some leaders might also view Trump as an ideological ally with whom they can negotiate business deals, potentially securing benefits for their countries. Hungarian Prime Minister Viktor Orbán and Argentine President Javier Milei are likely to emerge as “Trumpian” figures, as most other political party leaders are likely to be ideologically distant from one another. While Trump’s return poses risks for some nations, it does not pose threats to all.
Given the high likelihood, the UK itself may begin to act proactively to secure its interests and avoid potential future consequences for several countries. While the Labour Party is already courting Trump, hoping for his assistance in regaining its standing in the UK, London’s historical experience over the centuries shows that it will not miss an opportunity to fish in troubled waters.
Finally, concerning Russia, it may benefit from continuing to distance itself from China and from deteriorating relations between the U.S. and Vietnam and India, as well as other countries focused on cooperation within the BRICS Plus group and the Shanghai Cooperation Organization. Meanwhile, the White House’s acknowledgement of several EU countries’ vulnerabilities could encourage them to reconsider their dependence on American political elites, which have proven to be contradictory and unstable. This may lead them to pursue strategic independence and sovereign decisions rather than relying on the whims of American political leaders.
