With a promise to resurrect a “golden age” followed by a flurry of executive orders, Donald J. Trump was sworn in as the 47th president of the United States yesterday. The new Trump administration enjoys a stronger mandate than in his previous tumultuous term between 2017 and 2021. Trump is also, in many respects, better organized to advance his agenda. In his inaugural address, the U.S. president articulated priorities that included combating transnational crime, trade deficits, wasteful public spending, and mandatory diversity requirements, while advancing border security, energy self-sufficiency, public service delivery, and manufacturing. On foreign relations, he declared: “My proudest legacy will be that of a peacemaker and unifier. That's what I want to be.”
Some Consistent Positions
How should observers around the world think through the consequences of a second Trump presidency? On some issues, Trump has had a decades-long consistent approach. On these issues, at least, his rhetoric and intentions have been clear, both on the campaign trail and since winning last November’s presidential election. These include a deep and abiding skepticism of multilateral institutions, which he believes bind or limit the United States. Trump may seek to withdraw from some of these institutions, such as the Paris Climate Accord and World Health Organization, but at others he will seek to reset the terms of engagement. At the same time, he appears less skeptical of new coalitions that he believes advance U.S. interests with fewer obligations, such as possibly the Quad, AUKUS, and the Abraham Accords. Second, Trump has been clear that the global economy has not always benefited Americans, particularly the manufacturing sector. He has been opposed to free trade agreements and is willing to use tariffs to negotiate better terms in a bid to narrow trade deficits. This does not mean that he will completely rule out partial agreements, or even deals along the lines of the US-Mexico-Canada Agreement negotiated in his first term, which he believed benefited American workers.
Third, Trump has been clear about cracking down on undocumented migration. Extraordinary efforts will be made in the next few weeks and months to stem border crossings, enforce deportations, and deter prospective migrants. Fourth, on some international issues Trump has staked out clear positions. This includes, notably, the Middle East where he has been aligned with Israel and Gulf Arab monarchies, and against Iran, an approach that will likely continue under the multiple envoys announced for the region. Fifth, Trump will undoubtedly unlock greater fossil fuel energy resources – oil and gas – by overriding prior environmental constraints, bringing down global energy costs, and increasing exports.
Continuing Uncertainty
On other matters, however, there is far greater uncertainty. Trump’s approach to China has offered mixed messages, reflecting the views of a diverse set of advisers and voices. On the one hand, his talk of tariffs and the Panama Canal are squarely directed at competition with China. But these impulses coexist with his efforts at engaging Xi Jinping or giving a new lease of life to TikTok. How these positions influence a Trump administration’s approach to Taiwan, maritime competition, supply chain security, or the contest for global influence remains to be seen. Similarly, while Trump has made no secret of his engagement with Russian leader Vladimir Putin, and has desired an end to the Ukraine war, the terms of any resolution are still up in the air.
On domestic policy, some of the devil will be in the detail. What sectors and countries will be at the receiving end of tariffs – and what legal instruments Trump will employ – are still to be seen. For now, it appears that Canada and Mexico may receive the brunt of attention before China, let alone other trade partners. How a Trump administration will deal with legal migration is also unclear, with competing voices already reflected among his closest advisors. Some are concerned about competition for talent, particularly in the technology sector, while other more conservative voices want more stringent cultural criteria for new migrants.
Consequences for U.S.-India Relations
It is consequently possible to anticipate short-term benefits to the U.S. stock market, inbound investment, energy prices, and cryptocurrency values. Yet a second Trump administration might find it more difficult to manage factors such as inflationary pressures, federal government spending, and questions of talent and labor mobility.
For India, the relationship with the United States looks to start on a more positive track than most. India is not in the crosshairs of most major policies – in other words, most new measures under the Trump administration are not being designed with India in mind. India is neither an adversary to contend with (such as China, Russia, Iran, North Korea, Cuba, or Venezuela) nor is it an ally that Trump believes to be taking advantage of U.S. generosity, such as the European Union or Canada. Overall, Trump appears positively disposed towards a strengthened relationship with New Delhi.
But on two issues – trade and immigration – India will be directly affected and will have to anticipate some tough negotiations. On trade, India is among the countries with the largest trade surpluses with the United States, and Trump will hope for India to take steps in various sectors – from energy to aviation – to start narrowing the gap. He may well employ tariffs in a bid to reach a trade deal, such as the one finalized in 2020 that Washington subsequently rejected. Although a full-fledged free trade agreement is out of the question, given anticipated difficulties in the U.S. Congress, a notional ‘trade truce’ between the United States and India would assuage businesses in both countries and create more stability, particularly if concluded within the first year of the new administration. On immigration, a package deal can be envisaged that addresses the concerns of both countries – including questions of illicit trafficking – while facilitating legal migration in a manner that benefits both economies.
In summary, it is possible to anticipate both a burgeoning U.S.-India partnership under a second Trump administration and some short, sharp tussles over a handful of important issues. But some countervailing trends are likely to play out over the next four years, both for certain areas of public sector cooperation – such as on defense or supply chain cooperation in light of India’s own ambitions – and for broader business relations.
Dhruva Jaishankar is Executive Director at ORF America.