Trump 2.0 has raised numerous concerns for both the direction and substantive content of the evolving global order. The decisive victory of both President Trump and his Republican Party in the recently concluded November 2024 US elections as well as his Cabinet appointments foreshadowed both an ideological and cultural war against existing liberal global and domestic policies and institutions. This has happened much more quickly and ruthlessly than most people expected.
Elon Musk’s ideological, self-serving, disruptive Department of Government Efficiency (DOGE) chainsaw massacres of the US Agency for International Development (USAID), federal education, social security, diversity, equity and inclusion (DIE) policies and other liberal or checks and balance aspects and institutions of the US Government are the most visible domestic examples of this war in practice. Together with the Trump 2.0 Administration’s attack on health and other lifesaving and cutting-edge research funded by the National Institute of Health and conducted by top US Universities, especially Ivy League institutions such as Harvard and Columbia University, they represent a series of early and devastating self-goals against the United States of America by President Trump and his loyalists.
Trump’s global tariff war, in explicit violation of many core principles of the World Trade Organization (WTO) as well as the US’ exit from numerous United Nations (UN) institutions, conventions and agreements including the World Health Organisation (WHO), Paris Climate Accord and its disavowal of the globally agreed Sustainable Development Goals Agenda 2030 are international examples of his ideological war and US self-goals at that level.
Trump 2.0, in its first four months, has been marked by corruption, chaos and cruelty. Corruption has been of many kinds, not least for the financial gain of his family and friends by effectively eliminating the clear line between personal and official business. This has probably already resulted in billions of dollars in personal profit for a handful of individuals close to the President in many areas ranging from the stock market to cryptocurrency transactions. The President also recently accepted an unprecedented gift, an aeroplane, from the Emir of Qatar). Trump 2.0 has also been marked by a number of constitutionally illegal domestic policies and international initiatives enacted unilaterally by Executive Order decree. Many of these need Congress approvals but have been implemented without it.
Some of these actions have resulted in the deportation of large numbers of legal and illegal immigrants from the US. Many Executive Orders impact countries and people around the world. This is because the US still has disproportionate influence on world affairs, even though its dominant role has been declining for a few decades now. This relatively new domestic and global situation should, therefore, deeply worry not just US citizens but everyone who cares about the future trajectory of the world.
The President continues to offer his voter base the false promise that if illegal immigrants are deported, new immigration to the United States tightened, and tariffs for imports into the US are increased, that de-industrialization in parts of the Midwest of the United Sates of America will magically and immediately reverse itself, their joblessness will go away and that their livelihoods and lives will quickly and significantly improve, and that all of this will Make America Great Again (MAGA).
Sadly, neither the new US Congress, US Senate, the US Supreme Court or the main US Opposition Democratic Party have thus far demonstrated any effective checks and balances during Trump 2.0. The only constraining force on Trump and his Cabinet members in the next four years will emerge if there are significant Republican losses in both the US Congress and Senate in the 2026 mid-term elections and through the cumulative impact of the Administration’s own self-goals which have already been numerous and grow by the day. The only other deviation from his policies will happen if the President’s own personal business gain or narrow self-interest, one of his few predictable attributes, requires this.
The Global and Domestic Economic Mayhem
Between the global tariff war and the US Congress’ recent “big, beautiful bill”, Trump 2.0 is wreaking havoc on both the US domestic and international economy. The negative implications of Trump’s global tariff war, despite contradictory on-off signals, were unleashed, especially since April 2, and there is no turning back from their multitude impacts. Despite his rollback of tariffs on China from 145% to 30% some weeks ago and regardless of whether he rolls back tariffs on the rest of the world on July 9 after his 90 days pause in April, the President’s commitment to the global tariff war was once again recently illustrated by the his threat, in the third week of May, to impose 50% tariffs on the European Union (EU) from June 1 (the date has now been changed to July 9) and 25% on US imports of Apple I-Phones. India, together with China and Vietnam were specifically mentioned as export sources on which such tariffs would be levied.
The extent of uncertainty as well as the damage to the world economy as a direct result of Trump 2.0 tariffs is just beginning to build and much of it cannot be rectified. As the CEO of Walmart has explicitly already indicated, most businesses will not “eat their tariffs” as President Trump has asked them to do. They will pass them on as a new tax to their consumers. Likewise, countries such as China, Vietnam and India will pass them on to US-based importers.
Nobel Economics Laureate Paul Krugman estimates that US trade with China will drop by 65% while US trade globally will suffer by 50% because of the global tariff war even after Trump reduced his 145% tariffs on China. Furthermore, Krugman estimates that the overall negative impacts of the global tariff war will be seven or eight times greater than those caused by the disastrous Smoot-Hawley Act of the early 1930s which fuelled the Great Depression.
Moreover, while President Trump may be able to fool his Make America Great Again (MAGA) base all the time and a few others some of the time, he has not been able to fool the US Treasury bond market any of the time. This is already resulting in a serious self-goal for the US with likely unprecedented mid to long term negative consequences for the financing of the already staggeringly high US debt burden, the value of the US dollar and its role as the world’s main reserve currency.
Together, these developments will inevitably lead to higher US and global unemployment and rising inflation. When combined with lower economic growth (the US’ 2025 first quarter GDP growth rate was a negative 0.3% as against the 2-2.5% predicted by the Trump Administration) and stalled investment which is already in evidence given the huge uncertainties and overall poorer economic climate, the US is more than likely to witness stagflation for the first time since the 1970s. While that episode was caused by the unexpected OPEC oil price shock, the forthcoming stagflation is, sadly, fully predictable, and entirely Trump 2.0 policy induced.
But this is not the full story. Worse is still to come. Trump 2.0’s “big, beautiful bill” has regressive tax cuts in favour of the rich and health care cuts for the poor as its core ingredients. This Bill narrowly passed the US Congress by one vote (215-214) in the third week of May but is yet to pass the Senate.
The expected positive “trickle down” effects of the tax cuts, even if some materialize, are likely to be small and wholly inadequate to reverse either the current adverse economic trends or the negative economic impacts of the Bill on America’s most vulnerable population groups. It is estimated that US residents making between $17,000-51,000 a year will lose about $700 a year but if you are among the top 0.1% of earners you’ll gain nearly $390,000 a year.
The Bill also highlights a truism. In the US, racism has always gone hand in hand with the concentration of wealth among the very richest people.
The non-partisan Congressional Budget Office says the bill will result in cuts of at least $715 billion in healthcare spending, mostly from Medicaid. This is estimated to result in the loss of Medicaid for at least 8.6 million US citizens/ residents. It also cuts $300 billion from the Supplemental Nutrition Assistance Program, causing more than 2.7 million American households to lose these benefits.
Moreover, the Bill’s measures will result in a massive debt increase of $3.8 trillion over 10 years. The recent Moody downgrade of the US’ credit rating is directly linked to the additional federal debt expected because of this legislation. This increased debt also activates a 2010 law which will trigger offsets cutting even Medicare by an estimated $500 billion.
The Bill is likely to accentuate the impacts of the economic downturn for already poor, vulnerable and under-privileged American citizens and residents. An estimated 25-40% of Trump’s MAGA base is dependent on federal health care, with the exact percentage depending on which county they live in.
Detentions, Incarcerations and Deportations from the United States
Another major set of issues relate to the geo-political and geo-economic implications, especially for Mexico and Central America, but also for the whole of Latin America and other parts of the world, of the Trump Administration’s forced abductions and deportations of both legal and illegal US resident individuals to gulag like privatized prisons in Louisiana in the US and El Salvador in Central America, with other venues in Africa and elsewhere still under discussion. The overall forced exodus from the United States, if President Trump has his way, could be of the magnitude of around 10 million people over the next few years.
President Trump’s Homeland Secretary and his Deputy Chief of Staff who jointly oversee the immigration portfolio continue to act on President Trump’s deportation message, often using illegal, forced abductions led by Immigration and Customs Enforcement (ICE). Their scope has been expanded to include both University students who are legally in the United States as permanent residents or foreign students on legal F-1 visas who are alleged to have been active in anti-Israel genocide protests. They have been labelled as “enemies of US foreign policy.” This is a truly scary aspect of Trump 2.0. It also clearly puts the US in violation of its own Constitution’s First Amendment, the 1951 UN Refugee Convention and several other international humanitarian laws under the governance of the UN Office of the High Commissioner for Refugees (UNHCR). These actions are also in violation of many Conventions under the responsibility of the UN Office of the High Commissioner for Human Rights (OHCHR). Rather than abide by international human rights law, the US has withdrawn from the UNs Human Rights Council, making itself unilaterally unaccountable to them.
Like the US import tariffs, deportations do not portend well for the US economy either, much of which depends on many of the very same legal and illegal immigrants who have either already been deported or are under threat of deportation since they provide critical labour for the economy in the Rust Belt and through jobs which most white Americans cannot do or will not accept.
Implications and Options for India
Emerging Geopolitical and Geo-Economic Trends: Implications for India
The clear global and regional (Asia-Pacific) winner of Trump 2.0’s destructive chaos and self-goals is likely to be the People’s Republic of China, not just in the UN and other multilateral bodies where its influence will substantially increase and where it will seek to put its own illiberal stamp on the future of multilateralism more firmly, but also through its growing influence in or over major regional plurilateral bodies such as the Regional Comprehensive Economic Partnership (RCEP) and the Association of Southeast Asian Nations (ASEAN), both of which it already significantly influences. This alone represents an overall loss for India in global and regional geo-political and geo-economic terms, given its age-old rivalry and animosity with China.
India’s Minister for External Affairs, S. Jaishankar, has been repeatedly and widely and quoted as commenting that India, unlike, much of the world, welcomes Trump 2.0 and is not worried. He is also quoted as saying that the world is headed towards multi-polarity which he welcomes. But his idea of multi-polarity and Trump’s vision of it clearly, significantly differ.
Trump, ideally, would far prefer his own unipolar global empire. In any case, he does not recognize either India or even South Asia as one of the multi-poles if a multi-polar world is to emerge because of a hastened US decline caused, ironically by Trump 2.0’s numerous self-goals benefiting China. His actions have made clear that he only recognizes a power play involving two individuals other than himself— President’s Xi and Putin. Part of his mixed, inconsistent and unfulfilled messages on ending the existing wars in Ukraine and Gaza and reducing US interventionism in the world suggest that he is resigned to leave the Asia-Pacific region largely to China and Europe largely to Russia while claiming the Americas for the US, if this is necessary. India does not figure in this muti-polar world.
Regardless of whether and when such a muti-polar world emerges (the EU will certainly continue to strongly contest any such role over Europe for Russia), the emerging geopolitics and geo-economics in the Asia-Pacific (or Indo-Pacific as India prefers to call it) suggest that India will need to learn to live under China’s leadership of the region in which the latter is already a hegemon, having overtaken the US in its influence.
While these are now the objective facts on the ground, this is unpalatable to most of India’s political leadership across the board and many of its citizens, most of whom are in denial on this set of issues. Despite this, both the country and its citizens will need to adjust to this emerging reality. The quicker India acknowledges and accepts this realpolitik situation and takes appropriate action in its own interests, the better for it in the medium to long run.
Economically, the RCEP, the largest trade bloc in world history, now effectively led by China, is a practical case in point. India should have joined it in 2020 at the ASEAN Summit in Hanoi, Vietnam where it was created. It should now lose no more time and join it on the best terms it can obtain.
Militarily and from a security perspective, the recent Indo-Pak four-day crisis demonstrated both China’s growing tech formidable, military and security role in South Asia, especially but not only in support of Pakistan. Its repeated forays over many years into the South China Sea, especially in Philippines and Taiwanese waters, and its takeover of Hong Kong are examples demonstrating its growing military and security influence in East and Southeast Asia.
Militarily, the recent India-Pakistan clashes also clearly demonstrated that the US under Trump cannot be relied on to explicitly support India in any future war against Pakistan-based terror groups. The $1 billion International Monetary Fund (IMF) bailout package for Pakistan after the 22 April Pahlgam terrorist attacks in Kashmir could not have been approved without US support. Trump has also since indicated in multiple ways that the US regards India and Pakistan as equal US partners, a marked departure from recent US Administrations. His repeated offer to mediate between India and Pakistan on the Kashmir and other issues, thereby internationalizing them, is also anathema to India.
The US, under President Trump, cannot also be relied on in terms of not providing military and other support to Pakistan because Pakistan possesses significant deposits of rare earth minerals in Balochistan and Gilgit-Baltistan. There is also the prospect of cryptocurrency business deals involving his family. All of these are likely to give Pakistan considerable leverage with the US in both the defence and other areas.
The war also visibly demonstrated China’s explicit and full military support to Pakistan, which together with Turkiye largely compensated for the asymmetrical military equation between India and Pakistan in previous encounters because of the former’s much larger size and defence budget. China’s technological edge and latest formidable military arsenal were also on display and, in some respects, appear to have been more than a match for the latest Western military technology and assets that India has recently acquired, according to some reports.
India must now protect and be on high alert on its multiple borders with both Pakistan and China simultaneously since the Galwan episode is far from concluded. It cannot also ignore its border with Bangladesh, given its recent conflictual relationship with that country. China, on the other hand, with a much more tech advanced military, only needs to worry about its borders with India in South Asia.
From a political perspective, many ASEAN and even most South Asian countries (eg. Bangladesh, Nepal, Sri Lanka in addition to Pakistan) may be willing to live under the certainty of China’s umbrella as opposed to the increasing unreliability and inconsistency of the US umbrella. Even Japan and the Republic of Korea, two of the US’ oldest and loyal allies and China’s greatest historical foes in the region, recently began talks with China on a trilateral trade pact, after the US levied its hostile, reciprocal tariffs on them.
Trump 2.0, as it progresses, is likely to reinforce these geo-political and geoeconomic realities in the region.
As a result, the Trump regime is unlikely to be good either for India’s genuine national interest or even the narrower self-interest of India’s current ruling dispensation, notwithstanding the unsurprising and visible chemistry between Prime Minister Modi and President Trump, both known illiberal leaders, who bonded in front of large crowds both in India and the US during Trump 1.0.
The Prime Minister, External Affairs Minister and many other BJP Government Ministers and Indian mainstream media commentators have welcomed Trump 2.0, believing that India can rely on the US as an all-weather friend, given its rivalry with China. They fail to understand or take adequate cognizance of the incontrovertible and overwhelming evidence indicating that Trump is opportunistic, transactional and totally untrustworthy all the time, except with his long-proven loyalists and when it comes to recognizing the few people he considers powerful and ruthless such as Presidents Putin and Xi, with whom he is most often on his best behaviour.
India will only gain his real attention and admiration if it visibly and convincingly demonstrates that it can, indeed, be an effective bulwark against China in the region and globally. For it to demonstrate this convincingly, India will need to stand up to China militarily, economically, technologically and diplomatically, neither of which seems possible in any real, practical sense for the foreseeable future.
On another important front, while India continues to self-proclaim itself as the leader of the Global South, China, through its dominant role in the BRICS, the Shanghai Cooperation Organization (SCO), the Belt and Road Initiative (BRI), the Asian Infrastructure Investment Bank (AIIB) and other long-standing programs has been and is likely to remain much more economically, financially, technologically, militarily and politically influential with developing countries across the world.
It should also be understood in the wider geo-political regional context that India’s Act East policy has been too little, too late, and is therefore a non-starter in terms of providing any serious competition to China in East and Southeast Asia.
The India-US Bilateral Trade Agreement (BTA)
India appears to have prioritized this proposed BTA above all other trade agreements to escape Trump’s global tariff war. But, regardless of whether Trump’s 26% reciprocal tariffs on India are reduced or waived, there is no escape now from Trump’s tariff uncertainties and consequences, nor should India believe, as some of its senior policy makers and citizens appear to, that India is a favoured trade partner of the current US Administration. Trump clearly does not want Indian or any other country’s supply chains to replace Chinese, Vietnamese or other ones for I-Phones, garments or other labour-intensive products. He is unwilling to allow manufacturing or even assembly in India as his recent late May threat of a 25% tariff on Apple I-Phones imported into the US from India, China, Vietnam and Thailand clearly indicates.
Trump and his loyalist trade advisers want to eliminate or at least drastically reduce India’s current trade surplus of around $ 40 billion with the US, not increase it or leave it untouched. To enable this, they want zero Indian tariffs across the board ideally as Trump has repeatedly said India has agreed as well as market access in defence/military, agriculture, automobile, industrial, technology and other sectors of the Indian economy together with the elimination of India’s genetically modified organism (GMO) and other non-tariff barriers.
The BTA that India has prioritized to reach preliminary agreement on by July 8, with a full first phase agreement by September-October 2025 is unlikely to be achievable. If there is any agreement, it is unlikely to be in India’s favour. India’s exports to the US are likely to face tariffs of between 10-20% across the board, making them less competitive than at present, while to avoid even higher US import tariffs, India will be expected to drastically reduce its tariffs in many sectors which it can only do at the risk of creating further job losses in an already dismal employment situation. A largely one-sided BTA will come at the cost of significant micro, small and medium enterprises (MSME) destruction, farmer agitation, unemployment and imported inflation in India, among other ills.
The BTA is also unlikely to reverse the tighter US immigration rules and restrictions on the grant of new student F1 and H1B visas under Trump 2.0.
India’s Economic Relationship with China
India is already significantly and increasingly dependent on China for its import of strategic and critical intermediary products, and this dependency has recently grown, with its trade deficit with China having increased to $ 99.2 billion in the 2024/2025 fiscal year that ended in March 2025, significantly up from $85.08 billion in the previous fiscal year. Indeed, India’s imports from China over the last few years have grown at a much faster pace than its imports from the rest of the world, despite many restrictions on Chinese businesses following the India-China Galwan military border clash in 2020. India should, therefore, urgently find a way to balance its overall economic relationship with China. It needs to urgently place the highest priority on its trade and broader economic relationship with both China and the EU, placing these relationship at a higher level than its BTA with the US.
The Likely Future Scenario
Is 2025 that crucial moment in the 21st century when the pendulum begins to more vigorously swing not just against democratic liberalism in terms of the global order, but also against the United States, an already declining power, and in favour of the People’s Republic of China, as the ascending global power, making it “primus inter-pares” in a multi-polar, not unipolar world more quickly than was possible to imagine before Trump 2.0?
Regardless of whether the above-mentioned shifts in global geopolitics materialize, India needs to understand that it cannot now stop China’s rise in the Global South, across the world or in multilateral and other global for a such as the UN, World Bank and IMF. Nor can Russia’s and the US’ decline on the global stage be stopped. As such, India will need to come to terms, sooner hopefully rather than later, with China’s global rise and almost hegemonic dominance in what it prefers to call the Indo-Pacific region.
India also needs to learn the right military and security lessons from the recent brief but extremely worrying China Pakistan-India crisis, recognizing that China is now a dominant technological and military power not just in the South China Sea but in South Asia as well. To balance this equation, it will need to make its procurement of military hardware much more technologically cutting-edge and coherent as opposed to the mixed bag shown by it against Pakistan recently. This implies both increasing and balancing its defence imports from both France and the US, while at the same time more quickly phasing out its military dependence on Russia.
ABOUT THE AUTHOR
Kamal Malhotra is Distinguished Visiting Professor, NALSAR University of Law, Hyderabad, India; Non-Resident Senior Fellow at the Boston University Global Development Policy Center and has recently also Guest Lectured at the School of Interwoven Arts and Sciences (SIAS), Krea University, India. Prior to his retirement from the United Nations in September 2021, Mr. Malhotra had a rich career of over four decades as a management consultant, in senior positions in international NGOs, as co-founder of a think-tank, FOCUS on the Global South, and in the United Nations (UN) including as its Head in Malaysia, Turkiye and Vietnam (2008-21). He was UNDPs Senior Adviser on Inclusive Globalization, based in New York, USA, for most of the prior decade. Mr. Malhotra is widely published.
