Sanjaya Baru writes: Fears of a Trump presidency are greatly exaggerated

The global economy is far too integrated for even the most powerful entity to imagine that it can hurt without getting hurt

President Donald Trump gestures during the 60th Presidential Inauguration in the Rotunda of the US Capitol in Washington. (AP photo)

Written by: Sanjaya Baru

6 min readJan 21, 2025 11:02 AM IST First published on: Jan 21, 2025 at 07:00 AM IST

Grant it to Donald Trump. He knows how to sell an idea and get the market all excited and worried. He will reclaim the Panama Canal, occupy Greenland and subjugate Canada. He might even orchestrate a political coup in London. An entire industry of global commentators has emerged predicting turbulence in world affairs caused by a disruption of the so-called post-war “rules-based international order” by President Donald Trump. It is not merely adversaries like China, Iran and Russia that he will go after, it is predicted, but also allies and friends across Europe and Asia.

The Indian leadership seems to have gone into a funk, more after President Xi Jinping received an invitation to Trump’s inaugural. All the speculation about who was spotted at which do in Washington DC this weekend is no different from the excitement surrounding the guest list to a billionaire’s wedding.

How much of this Trumpian turbulence and disruption talk is bluff and bluster? Indeed, how capable is the United States today to disrupt and damage the existing global order without hurting itself? Can Trump Make America Great Again hurting allies and losing friends? Can he do that taking countries hostage? Is the international community so weak, disorganised and vulnerable that it will simply bend and crawl? Do sovereign nations have no options?

What is so special and challenging about Trump’s “America First” platform? When was the last time the United States placed another country’s needs and wants ahead of its own for Trump to now claim that it is time for the US to declare America First? America has always been first for its leadership after the Second World War. It has refused to step away from the countries it defeated and occupied in that war. On the other hand, it engaged in new wars to secure control over new territories, and then claimed it was ensuring global peace and stability in the name of a “rules-based liberal international order”. This was true even when it invested in the defence of countries that it either occupied, like Japan, South Korea and most of western Europe, or in supplicant countries of the Anglosphere.

This is not the first time in recent history that fear has been instilled across world capitals about the damage that can be caused by American power. There was once a brief period that was called the “unipolar moment”. The entire edifice of the post-war balance of power system came crashing down with the implosion of the Soviet Union. The US emerged as the paramount global power. Scanning literature of that era, the early 1990s, one comes across similar predictions of US power disrupting the global order. Of Pax Americana.

Sure, the US used that moment to renew the sources of its power by introducing a new global trading order, new set of rules for intellectual property protection, new military alliances and foraying into new military adventures. American political scientist Francis Fukuyama declared victory for America with his treatise The End of History and the Last Man in 1992. There are many still standing in Vietnam and Afghanistan, not to speak of China and Russia. If one chapter of history ended, another began.

The unipolar momentum was just a brief interregnum. That moment of hubris had its consequences for the US and the world. The economist John Williamson declared that a “Washington Consensus” would henceforth define economic policy worldwide. It did for some time. Then in 2008 it came crumbling down. First in Wall Street, then in London’s City and then across Europe. A “trans-Atlantic financial crisis” was dubbed a “Global Financial Crisis”. In the next decade after that the Chinese economy took off, and India did not do too badly either. The US no longer has the capacity to impose its will through multilateral financial institutions nor through the global trading system. The spread of regionalism in trade and the emergence of new markets has also reduced US capacity to impose its will.

There were losers during the unipolar moment. In 1990, the United States and the European Union accounted for nearly 25 per cent of world income each and Japan had a share of 17 per cent. Having lost a chunk of that share over the next 15 years the US recovered to regain and now accounts for 26 per cent of global income. Europe Union is down to 17 per cent, despite its expansion and Japan has contracted all the way down to 4 per cent. Then, too, it was the allies that got hit. Adversaries survived.

No wonder the export dependent Europeans and Japanese are in a funk now. But what of China and India. China increased its share after that unipolar moment from 4 per cent to 17 per cent, emerging as a contending pole. India did not do too badly either. India came out of an unprecedented economic crisis, made worse by American bossism of the unipolar moment, and found its own path to renewed growth.

If a weaker China and a much weaker India survived that unipolar moment and threw spanner in the works of the “end of history” theorists, why should a stronger China and India worry too much about Trumpian turbulence today? Sure, both would be hurt by Trump’s threatened tariffs, but Americans would be hurt too. Any sharp increase in US tariffs will hit producers in China and India, but it will also hit consumers in America.

The global economy is far too integrated for even the most powerful entity to imagine that it can hurt without getting hurt. If the US looks inward to improve its infrastructure, invest in the education and health of its citizens, create more jobs at home for the unemployed that would be good for the world economy. If America First means investing US tax payers’ money at home and not on soldiers who go to distant lands to die that too would be good for America and the world. The US still has the capacity to do global good and in helping itself it could help the world.

At least some of the alarm generated by Trump’s return to office could well be motivated by those in Washington DC who either imagine they can scare countries into submission or hope to offer their lobbying services. That could also be true in many capitals around the world.

The writer was Member, National Security Advisory Board of India, 1999-2001 and media advisor to Prime Minister of India, 2004-08