WASHINGTON – Donald Trump’s inauguration marks a global inflection point: He takes office at a moment when many analysts see a transition to a new economic and political order – one where the risks for the United States and its allies are likely to increase.
Trump’s promise to “make America great again” resonated with many disaffected voters at home.
Financial markets have so far been surprisingly steady, given the rising uncertainty and risk levels. But outgoing Treasury Secretary Jack Lew cautioned in a recent interview: “In an economy where confidence is one of the factors that leads to investment, and uncertainty and political instability undermine confidence, there is a real risk that the cumulative amount of political instability in the world slows down investment.”
Trump has embraced the breakup of the old order. He has criticized NATO as “obsolete” and predicted the European Union’s demise – challenging two pillars of America’s network of power. He has talked of imposing tariffs against imports not just from China, but from Germany, raising fears of a global trade war. He has promised a revival of U.S. manufacturing jobs that many economists argue can’t be restored without disrupting other parts of the economy.
“Wait and see” is always a good rule on Inauguration Day, but we’ve never had a president quite like Trump, with so many disruptive ideas and so little experience. Change is his political brand.