After some excesses during the end-of-year celebrations, the month of January is usually characterized by sobriety, with its good resolutions or the challenge of dry January. This year, however, it is completely different on the other side of the Atlantic.
A few days before the inauguration of Donald Trump, which will take place on January 20 on the steps of the Capitol in Washington, several excesses are already marking the course of the Trump 2.0 administration.
On the diplomatic side, Donald Trump’s outbursts on Mexico, Canada and Greenland, as well as Elon Musk’s repeated interference in German or British politics, suggest that the allies or historical partners of the United States will experience more positive relations. troubled in the coming quadrennium. Even more worrying, territorial sovereignty and self-determination are no longer sanctuaries for Uncle Sam. A revolution which could, in the long term, inspire more extensive regional ambitions in other great powers. We naturally think of China with Taiwan.
At the democratic level, the relaxation of moderation of social networks on Facebook or Instagram illustrates the entry into an era of post-truth. The floodgates of disinformation, fake news, deepfakes and conspiracy theories are now fully open in the United States, and will continue to undermine democratic safeguards.
On the economic level, Elon Musk is giving the scent of a knockout to the American administration. With the aim of making it more efficient by cutting public spending, Elon Musk aims to reduce the federal budget by 1000 to 2000 billion dollars, or between 15 and 30% of the current budget. Achieving this without putting a large number of civil servants out of work and without drastically cutting public procurement seems improbable. While the medium-term consequences could be positive in terms of the deficit and debt trajectory, such a shock to employment and public demand risks harming American growth in the shorter term. For his part, Donald Trump still remains evasive on the scale and spectrum of the customs taxes which will be quickly introduced after his inauguration.
So many excesses and uncertainties which make the next 4 years difficult to read at many levels, including stock market trends. But Trump’s first term provides some initial insight: it is better to stick to actual decisions and avoid taking literally the rhetoric of the future American administration.
Writing completed on January 10, 2025
