Fernando Alcoforado*
This article aims to present the impacts on the US economy, on American democracy, on the energy and environmental sectors of the United States, and also on global geopolitics with the future Donald Trump administration in the United States. After defeating Kamala Harris by a wide margin, Donald Trump became the 47th president of the United States. Trump won in most of the decisive states and also won in the popular vote. His victory was complete with the Republican Party gaining the majority in the Senate and the House of Representatives. The Economist states in the article “Welcome to Trump’s world – His sweeping victory will shake up everything”, available at <https://www.economist.com/leaders/2024/11/06/welcome-to-trumps-world>, that “there will be time for recriminations among Democrats about what went wrong, but the initial answer is: it went wrong on almost everything. Multiple polls suggested that the country under President Joe Biden was headed in the wrong direction. Voters never forgave him for the explosion of inflation that began in the summer of 2021. Most damaging of all, voters across the country were furious at the Democrats’ failure to stop people from crossing the southern border illegally. And the party compounded its mistakes by covering up Biden’s disqualifying weakness until it became undeniable. But by now, they haven’t had time to find a political talent capable of defeating Trump”.
Donald Trump’s victory in the United States presidential election will have enormous economic impacts on the United States, on American democracy, on the energy and environmental sectors of the United States and also on global geopolitics, as described below:
1. Economic impacts on the United States
The Economist article “A second Trump term comes with unacceptable risks,” available at <https://www.economist.com/leaders/2024/10/31/a-second-trump-term-comes-with-unacceptable-risks>, reports that Trump is in favor of a 20% tariff on all imports and has talked about charging more than 200% or even 500% on cars from Mexico. He proposes deporting millions of undocumented immigrants, many with American jobs and children. He would extend the tax cuts. Such policies would be inflationary, potentially creating a conflict with the Federal Reserve. They could trigger a trade war that would ultimately impoverish the United States. The combination of inflation, runaway deficits, and institutional decay would hasten the day when foreigners would worry about lending unlimited money to the U.S. Treasury. Trump wants to go back to the 19th century, using tariffs and tax breaks to reward his friends and punish his enemies, as well as to finance the state and minimize trade deficits. Such policies could destroy the foundations of U.S. prosperity.
The Economist article “How bad could a second Trump presidency get?”, available at <https://www.economist.com/briefing/2024/10/31/how-bad-could-a-second-trump-presidency-get>, reports that Trump’s economic plans are certainly bold. In addition to attacking the independence of the Federal Reserve, Trump has proposed a second, much larger increase in import tariffs, generous tax cuts, and a labor supply shock involving mass deportations of illegal immigrants. All of these measures would generate inflation, if not stagflation, which would force the Federal Reserve to raise interest rates to combat inflation. JPMorgan Chase & Co. has estimated that a tariff increase half as large as Trump’s would reduce a third to a half percentage point off U.S. GDP growth in its first year and raise inflation by 1.5 to 2 percentage points.
The aforementioned article states that if the Federal Reserve tightened monetary policy to counter inflationary pressures resulting from higher import tariffs, a shrinking workforce due to deportations, or extravagant spending, Trump would be willing to attack it. The Trump administration is expected to weaken Jerome Powell, the Federal Reserve chairman whose term in office (but not as a member of its board) expires in 2026, by appointing a “shadow” chairman to make less aggressive recommendations on interest rates. However, an attack on the Fed would almost certainly horrify markets. The Economist argues that it is doubtful whether Trump would be able to carry out all of his plans. Trump’s promise of a 20 percent across-the-board tariff on all imports and a 60 percent tariff on imports from China would not be feasible. Nevertheless, while the courts debate this issue, businesses would suffer ruinous disruptions, presumably made worse by retaliatory tariffs from other countries. There is an expectation that Trump would gradually increase tariffs as a means of extracting concessions from trading partners. This may only prolong the agony, however, and would not reduce the risks of a trade war. Even assuming that Trump would eventually relent and water down or abandon some of these policies, he could still do enormous damage in the process.
The Economist article “How bad could a second Trump presidency get?”, available at <https://www.economist.com/briefing/2024/10/31/how-bad-could-a-second-trump-presidency-get>, reports that Trump has proposed mass deportations of illegal immigrants. Mass deportations on the scale that Trump has proposed are unlikely to happen. The federal government simply would not have the capacity to deport millions of people unless Trump enlisted the military or replaced state and local law enforcement. There would be public uproar, resistance from Democratic-led states and cities, and endless legal challenges. It is not possible, even in Donald Trump’s fantasy, to send agents door to door, round up 12 million residents of this country and deport them. There simply is no infrastructure capacity for that. Labor shortages in industries that rely on immigrant labor, such as agriculture, construction, and slaughterhouses, would also be inflationary.
The Economist article “Welcome to Trump’s world – His sweeping victory will shake up everything,” available at <https://www.economist.com/leaders/2024/11/06/welcome-to-trumps-world>, reports that if Trump destroys the old order, what will take its place? Whereas the old America championed free trade, Trump will hasten the return to prewar mercantilism. He is a staunch supporter of tariffs. Trade deficits, Trump claims, are proof that foreigners are taking his country for fools and losers. Under his watch, America is likely to become wasteful as he and his party push for tax cuts that will further increase the budget deficit. Trump has promised massive deregulation.
From the above, Trump’s economic policies will worsen America’s economic and social problems with the prospect of inflation, economic stagnation, and rising unemployment, as well as will sharpen the trade war with his protectionist policy.
2. Impacts on American democracy
The Economist states in the article “Welcome to Trump’s world – His sweeping victory will shake up everything”, available at <https://www.economist.com/leaders/2024/11/06/welcome-to-trumps-world> that Trump will be able to make the most of his control of Congress with the Republican majority in his popular mandate. The Economist article “How bad could a second Trump presidency get?”, available at <https://www.economist.com/briefing/2024/10/31/how-bad-could-a-second-trump-presidency-get>, reports that perhaps most serious of all is the threat that Trump poses to American democracy and the rule of law. There is no doubt about his autocratic instincts. To stay in power after his 2020 election defeat, Trump attempted to bribe election officials and fomented a mob, ultimately leading to the attack on the Capitol by his supporters on January 6, 2021. Trump has not retracted his statements since. He still insists that the election was stolen; he calls those convicted of crimes on January 6 “political prisoners” and has promised to pardon them. Trump has mulled canceling the licenses of broadcasters who criticize him; he calls his political opponents “the enemy within” who may need to be confronted with military force. John Kelly, his former chief of staff, has said in recent days that Trump is a “fascist.”
The aforementioned article makes it clear that the real question is whether US institutions would be able to restrain Trump’s anti-democratic actions. The courts and the US Constitution would be the best checks on Trump’s autocratic whims. Trump would be able to get Congress to adopt constitutional changes, allowing him a third term, for example. Some political scientists believe that American institutions will comfortably absorb the shock of a second Trump presidency. Of the 40 populist governments around the world identified by Kurt Weyland of the University of Texas between 1985 and 2020, only seven became authoritarian. Moreover, those unfortunate countries had weak institutions and suffered precipitating crises. Even if the risk of a catastrophic collapse of American democracy is low, a second Trump term could erode democratic institutions. Trump would be a greater danger to the rule of law. He seems, at least rhetorically, fixated on revenge, having endured four separate criminal trials. He will be emboldened by his electoral triumph to act on the forces that tried to contain him. Trump is almost certain to dismiss the federal charges against himself. He is also likely to pardon the January 6 coup protesters. He has promised to strip away the independence of the Justice Department. That would allow him to launch investigations into his political enemies, which seems more likely than not. There is also a risk that violent extremists, such as the Proud Boys, could feel emboldened to target Trump’s political opponents. Trump is also likely to try to leave his mark on the federal bureaucracy, firing many low-level civil servants and top US generals whom he considers too “conscientious.”
From the above, makes it clear that Trump poses a threat to US democracy because, once in power and with control of Congress, he could undermine its democratic institutions and the rule of law.
3. Impacts on the US energy sector and environment
The Financial Post article “What Trump’s victory means for energy”, published by Jennifer A. Dlouhy and Ari Natter, available at <https://financialpost.com/commodities/energy/from-oil-to-evs-heres-what-a-trump-victory-means-for-energy>, reports that Donald Trump’s victory promises to shake up US energy and environmental policy, with far-reaching implications for oil production, offshore wind development, and electric vehicle sales. Oil and natural gas companies are expected to be the main beneficiaries. Trump has repeatedly promised to end a suite of federal policies that encourage electric vehicle sales, and his victory creates an opening for change on day one. A key target is an Environmental Protection Agency regulation that limits exhaust pollution from cars and light trucks, which has such stringent mandates that it forces automakers to sell significantly more electric and plug-in hybrid models over time. This signals a sharp shift from President Joe Biden’s policies that restrict fossil fuel extraction on public lands and waters. The Biden administration has also imposed a regulation that prevents drilling in more than half of the National Petroleum Reserve in Alaska. Trump may instruct his Interior Department to immediately review these policies.
The aforementioned article reports that the Trump administration will resume its review of natural gas export applications to major Asian nations and other countries that are not free-trade partners with the United States. Trump’s victory creates uncertainty for billions of dollars in clean energy tax credits. Under Trump, the Treasury Department is expected to rewrite the rules governing which projects and companies are eligible for credits to make them harder to obtain or more beneficial to fossil fuels. A tax credit that rewards the production of so-called green hydrogen is especially ripe for such a change, after years of lobbying by oil companies and other would-be developers seeking more flexibility in how they produce the clean-burning fuel. Trump’s victory puts a clean-tech green bench at the Energy Department in serious jeopardy. Trump will be under dual pressure to either end the program, ending a major source of support for the commercialization of green technology, or keep it running, only with a decidedly pro-fossil fuel tilt. Trump has repeatedly promised to “terminate” a set of EPA rules that stifle pollution from power plants and encourage the closure of coal-fired power plants, arguing that growing demand for artificial intelligence and manufacturing means the United States needs to build more plants, not close them. The agency is also expected to pause its work on developing new greenhouse gas emissions limits for existing gas-fired power plants. Neither Trump nor his party is likely to sign on to any significant international initiatives to combat climate change.
Given the above, oil and natural gas companies are likely to be the main beneficiaries of the Trump administration’s energy policy, clean energy technologies will no longer be a priority, and neither Trump nor his party is likely to sign on to any significant international initiatives to combat global climate change.
4. Global geopolitical impacts
The Economist article “A second Trump term comes with unacceptable risks,” available at <https://www.economist.com/leaders/2024/10/31/a-second-trump-term-comes-with-unacceptable-risks>, reports that when Trump takes office, two wars will jeopardize the security of the United States. In Ukraine, Russia has the upper hand, putting Vladimir Putin in a position to threaten further aggression in Europe. In the Middle East, a looming regional war with Iran could involve the United States. Trump’s superficial promises to bring peace to Ukraine within a day and his open encouragement of Israeli offensives are not comforting. Worse still is his disdain for alliances. Although these are the United States’ greatest geopolitical strength, Trump sees them as coups that allow weak countries to steal its military power. Arrogance and threats may help Trump, but they could also destroy NATO, the Western military alliance. China will be watching as it assesses how aggressive the United States will be against Taiwan. Asian allies may calculate that they can no longer trust the United States’ nuclear guarantee.
The Economist argues in its article “Welcome to Trump’s world – His sweeping victory will shake up everything,” available at <https://www.economist.com/leaders/2024/11/06/welcome-to-trumps-world>, that Trump may indeed be able to strike a deal with Vladimir Putin on Ukraine that does not end with Russian tanks in Kiev. He can also exert pressure on Iran and prevent China from using military power to dominate Asia. However, doubts about Trump’s reliability are likely to incite Chinese and Russian aggression. Trump will impose costs on America’s allies, especially in Europe. If they fear, they cannot depend on Trump to back them up if they are threatened, they will take steps to protect themselves. At the very least, America’s allies will need to spend more on their own defense. If they cannot muster enough conventional weapons to deter a local aggressor, more of them, in addition to Britain and France, may acquire nuclear weapons. The old order in the new world will be open season for bullies. Countries will be more able to bully their neighbors, economically and militarily, without fear of consequences. Their victims, unable to turn to the United States for protection, will be more likely to compromise or capitulate. Global initiatives, from combating climate change to arms control, have just gotten harder.
The Economist article “How bad could a second Trump presidency get?” How Bad Could a Second Trump Presidency Get, available at <https://www.economist.com/briefing/2024/10/31/how-bad-could-a-second-trump-presidency-get>, reports that Trump’s foreign policy poses alarming risks with its “America First” rhetoric. Trump says his dominant presence would be enough to resolve the war in Ukraine within 24 hours of his election, before he is even inaugurated. It seems increasingly likely that Ukraine will have to abandon or at least shelve its ambition to reclaim much of the territory Russia has occupied. Given Republican hostility to the Biden administration’s proposed military aid to Ukraine, it seems unlikely that a Republican-led House of Representatives would approve another large sum. Nevertheless, an abrupt and haphazard abandonment of Ukraine by the Americans would embolden Vladimir Putin and increase the risk he poses to his neighbors. Could Trump effectively nullify the collective security guarantee at the heart of the NATO alliance by refusing to contain further Russian aggression? Would he refuse to send American forces to Taiwan’s aid in the event of a Chinese blockade or invasion? Would Israel be free to do whatever it wanted in the Middle East, including attacking Iranian oil and nuclear weapons facilities? All of these are possible. Trump has a deep aversion to war, but also a strong desire to avoid appearing weak. The United States’ doctrine is to achieve peace through force. However, more important are the possibilities that cannot be ruled out: a forced surrender of Ukraine, the collapse of NATO, an expanding war in the Middle East, and so on.
From the above, Trump will seek an agreement with Putin given the impossibility of a military solution favorable to the United States in the conflict in Ukraine, drastically reduce NATO spending in Europe to focus on defending Israel against Iran, and, above all, counter China economically and militarily.
5. Conclusions
In summary, the impacts on the United States economy, on American democracy, on the energy and environmental sectors of the United States and on global geopolitics are as follows:
• Trump’s economic policies will worsen the economic and social problems of the United States, given the prospect of inflation with economic stagnation and rising unemployment, as well as intensifying the trade war with his protectionist policies.
• It is quite clear that Trump poses a threat to American democracy because, in power and with control of Congress, he will be able to erode its democratic institutions and the rule of law.
• Oil and natural gas companies are expected to be the main beneficiaries of the Trump administration’s energy policy, clean energy technologies will no longer be a priority, and neither Trump nor his party will be inclined to sign any significant international initiatives to combat global climate change.
• Trump will seek an agreement with Putin given the impossibility of a military solution favorable to the United States in the conflict in Ukraine, drastically reduce spending on NATO in Europe to focus on defending Israel against Iran and, above all, combat China in economic and military terms.
* Fernando Alcoforado, awarded the medal of Engineering Merit of the CONFEA / CREA System, member of the SBPC- Brazilian Society for the Progress of Science, IPB- Polytechnic Institute of Bahia and of the Bahia Academy of Education, engineer from the UFBA Polytechnic School and doctor in Territorial Planning and Regional Development from the University of Barcelona, college professor (Engineering, Economics and Administration) and consultant in the areas of strategic planning, business planning, regional planning, urban planning and energy systems, was Advisor to the Vice President of Engineering and Technology at LIGHT S.A. Electric power distribution company from Rio de Janeiro, Strategic Planning Coordinator of CEPED- Bahia Research and Development Center, Undersecretary of Energy of the State of Bahia, Secretary of Planning of Salvador, is the author of the books Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Doctoral thesis. Barcelona University, http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social Development- The Case of the State of Bahia (VDM Verlag Dr. Müller Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011), Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), Energia no Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV, Curitiba, 2015), As Grandes Revoluções Científicas, Econômicas e Sociais que Mudaram o Mundo (Editora CRV, Curitiba, 2016), A Invenção de um novo Brasil (Editora CRV, Curitiba, 2017), Esquerda x Direita e a sua convergência (Associação Baiana de Imprensa, Salvador, 2018), Como inventar o futuro para mudar o mundo (Editora CRV, Curitiba, 2019), A humanidade ameaçada e as estratégias para sua sobrevivência (Editora Dialética, São Paulo, 2021), A escalada da ciência e da tecnologia e sua contribuição ao progresso e à sobrevivência da humanidade (Editora CRV, Curitiba, 2022), a chapter in the book Flood Handbook (CRC Press, Boca Raton, Florida United States, 2022), How to protect human beings from threats to their existence and avoid the extinction of humanity (Generis Publishing, Europe, Republic of Moldova, Chișinău, 2023), A revolução da educação necessária ao Brasil na era contemporânea (Editora CRV, Curitiba, 2023), Como construir um mundo de paz, progresso e felicidade para toda a humanidade (Editora CRV, Curitiba, 2024) and How to build a world of peace, progress and happiness for all humanity (Editora CRV, Curitiba, 2024).
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