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U.S. President Donald Trump meets with Indian Prime Minister Narendra Modi at the White House in Washington, D.C., U.S., February 13, 2025.
In wake of the Signal scandal: Deflected blame and Transatlantic tensions
Waltz admitted Tuesday that the incident was “embarrassing” and said, “I take full responsibility. I built the group.” But top national security officials, including Director of National Intelligence Tulsi Gabbard, downplayed its significance in testimony before Congress on Tuesday, saying no classified material was shared in the unsecured Signal group — despite Goldberg’s assertion that plans were shared that, if intercepted by an adversary, could “conceivably have been used to harm American military and intelligence personnel.”
Congressional Democrats are calling for an investigation, and even their GOP counterparts admonished the chat as a “mistake” and urged the White House to “be honest and own up” to what happened.
Meanwhile, Europe – having been accused of freeloading by JD Vance and Pete Hegseth in the chat – is reckoning with what has become an irreparable rift in the transatlantic relationship. The UK government rejected the freeloading claim, highlighting that the planned airstrikes discussed in the Signal group were carried out with support from British refueling aircraft and that British troops have been fighting the Houthis alongside the US in the Red Sea.
What comes next? Despite the leak, the UK has stated that it will continue sharing intelligence with the US, but Eurasia Group expert Clayton Allen says it could “further incentivize European allies to plan for a future with uncertain US involvement.”
Congressional Republicans are unlikely to break from Trump’s stance and take further action against the officials involved. Meanwhile, Democrats will continue calling for an investigation and may be aided by Goldberg, who has said he may release the messages in the coming days if he can do so without compromising national security.
Allen says it will also fuel “speculation that this administration is learning as it goes and will amplify what has been private criticism of a somewhat ad hoc approach.”
People visit the booth of Walmart eCommerce during the 5th China Cross-Border E-Commerce Trade Fair at Fuzhou Strait International Conference and Exhibition Center on March 18, 2025 in Fuzhou, Fujian Province of China.
Beijing vs. Walmart: Consumer Impact
The Chinese government is also applying pressure,warning earlier this month that demands for discounts could violate contracts and threaten trade relationships. Walmart hasa strong retail presence in China, with sales rising 16% to $17 billion last year, that it doesn’t want to jeopardize. And China also has other cards to play against tariffs: Chinese Premier Li Qiangreportedly signed a State Council decree, effective Monday, to enforce its2021 anti-foreign sanctions law, enabling retaliation against foreign entities through bans, asset freezes, and trade restrictions.
Who could benefit from a trade dropoff with China? First in line: India.Milan Vaishnav, director of the South Asia program at the Carnegie Endowment for International Peace, told NPR that “Prime Minister [Narendra] Modi's big bet is that as more and more companies are seeking to exit China … India is poised to play in a very big way.” Potential winners also includeVietnam and Indonesia: Toy manufacturer Bratz, maker of popular fashion dolls, announced it would relocate factories to the three countries last week.
EPA Administrator Lee Zeldin, a Republican, speaks as the U.S. vice president visits East Palestine, Ohio, U.S., February 3, 2025.
The EPA’s new mission: business first, environment last
The new administration has already revised its legal framework for regulating greenhouse gas emissions, rolled back CO₂ and mercury limits on power plants, and reversed tailpipe regulations that were steering the US auto industry toward electric vehicles. Achieving Zeldin’s new vision means slashing environmental regulations, a move that earned Donald Trump praise on the campaign trail. These changes should make it cheaper and easier for businesses to build and expand.
While this may be good news for gas prices, it’s bad news for the environment and public health. The administration has called for the closure of all EPA offices addressing the disproportionately high levels of air and water pollution in poor communities, pollution that has been linked to higher rates of cancer and respiratory illnesses. These changes follow last year’s Supreme Court Chevron decision, which stripped the agency of much of its regulatory authority over industries.Trump in front of a downward trending graph and economic indicators.
America is souring on Trumponomics. Trump may not care.
For someone who campaigned on lowering grocery prices on day one and rode widespread economic discontent to the White House, Donald Trump sure seems bent on pursuing policies that will increase that discontent.
If you don’t believe me, take it from the president himself, who refused to rule out a recession last Sunday and acknowledged that his sweeping tariff plans would cause “a little disturbance.” But, he added, “we are okay with that.”
Are we okay with that, though?
From Trump pump to Trump dump
Trump’s election victory unleashed “animal spirits” as many business leaders and investors hoped he’d follow through on his campaign promises to cut red tape and lower taxes while ignoring the more disruptive planks of his economic platform: tariff hikes and immigration restrictions. Surely much of it was posturing and bluffing, they thought, and Trump’s more extreme impulses would be checked by market-friendly advisers like Treasury Secretary Scott Bessent. In the worst-case scenario, they assumed Trump would course correct when confronted with sliding stock prices or signs of economic cracks.
Slowly but surely, they are starting to realize they got it wrong. Trump meant what he said and is less bound by constraints than during his first term. (I hate to say I told you so, but it wouldn’t have taken them so long to figure this out if they subscribed to this newsletter.)
The S&P500 has dropped by 8% over the last month (so far) as the president’s promised “golden age” of growth collided with the chaotic reality of Trumponomics. American equities are not only lower than they were before Trump’s inauguration but have erased all gains since he became the odds-on favorite to win the race in October. This represents the worst stock market performance in a president’s first 50 days since Barack Obama took office in the midst of the global financial crisis.
But it’s not just Wall Street that’s souring on Trump’s plans. Consumers, small businesses, and CEOs alike are all reporting sharp declines in confidence, largely due to record uncertainty about tariffs. Manufacturing activity is slowing, retail sales and construction spending are falling, and businesses of all kinds are paring back their investment plans as threats to the US outlook mount.
Inflation expectations are on the rise, with 60% of Americans believing Trump isn’t doing enough to bring down inflation and 68% fearing that his tariffs will lead to higher prices. Most Americans think the economy is on the wrong track and disapprove of the president’s handling of it. No wonder Trump’s net approval has taken a quick hit, his honeymoon ending faster than any other president’s save one: Trump 1.0.
It's the economic uncertainty, stupid
Businesses and investors have reason to worry.
In his first six weeks in office, Trump has made it clear that he is dead serious about building a “tariff wall” around America, not as a negotiating tool but to reshape global trade flows. The US effective tariff rate is set to rise to its highest level since the 1940s by the end of the year, raising prices for American consumers and businesses and slowing down growth. Trump has virtually closed the southern border and ramped up the pace of deportations, which will constrain the labor supply and lead to higher prices and lower growth. He has threatened to eliminate government subsidies, contracts, and grants that businesses, universities, and other organizations rely on. And he has empowered Elon Musk’s chaotic effort to purge, downsize, and capture the administrative state, threatening the delivery of critical public services, amplifying these macroeconomic shocks, and destroying US state capacity.
And yet, these first-order consequences of Trump’s policies are not the core reason why traders and boardrooms are freaking out about the outlook for the US economy. Don’t get me wrong, businesses prefer good policies to bad policies. But they can adapt to bad policies. You know what they can’t adapt to? Policies that can turn on a dime based on the president’s whims.
Maybe you agree with Trump that “trade wars are good and easy to win,” or perhaps you believe his policies will cause short-term pain but be worth it in the long run. But whatever you may think of the merits of his agenda, there’s no denying that the constant uncertainty he brings to the table is terrible for business.
Every business decision is a bet about the future. The one non-negotiable before making any investment is a bare minimum of predictability. When the rules of the game can change any day (and when they’re no longer applied impartially), the rational choice is to put off costly long-term investment plans – even if the possible payoffs are high.
That’s why the extreme policy arbitrariness, volatility, and uncertainty that characterizes Trump 2.0 – best exemplified by his on-again, off-again, on-again tariffs – is the ultimate economic dampener. Even if Trump walks back some tariffs or implements his pro-growth promises, uncertainty – by some metrics already higher than it was during the pandemic, the 2008 financial crisis, and 9/11 – will remain near all-time highs for the foreseeable future, discouraging investment, hiring, and consumption, and raising prices. Its chilling effect will compound the direct impact of the administration’s implemented tariffs, deportations, federal layoffs, and so on. As I warned in Eurasia Group’s Top Risks report, “in the long run this will risk undermining the predictability and performance of the world’s most dynamic economy, preeminent investment destination, and issuer of the global reserve currency.”
No more Trump put?
Trump seems to have no intention of backing off his plans or moderating his “move fast and break things” approach, even in the face of economic dislocation. “Markets are going to go up and they’re going to go down, but, you know what, we have to rebuild our country,” he said at the White House yesterday.
This contrasts sharply with his first term, when Trump considered the stock market a barometer of success. Back then, investors and business leaders knew they could count on the “Trump put” – the president’s tendency to curtail his most economically harmful policies when faced with financial turmoil. Now, Trump is openly saying he doesn’t care that investors believe his agenda could cause a recession and raise prices – because it might, and he’s convinced the sacrifice will be worth it for the greater good. “Will there be some pain?” he asked in February. “Maybe (and maybe not!) But we will make America great again, and it will all be worth the price that must be paid.”
So the Trump put either doesn’t exist anymore, or the threshold is significantly higher than it used to be. This makes sense when you consider the president doesn’t have to (read: can’t) run for reelection again. After being twice impeached, convicted, nearly assassinated, and taken for dead politically, the 78-year-old Trump is in a rush to cement his legacy before his “enemies” get another chance to take him down.
True, most presidents – even lame ducks – would consider avoiding a crippling economic meltdown, scoring a decent result in the midterms, and handing the reins to a same-party successor essential to a good legacy. But Trump is no ordinary president. He does not, for example, care much about the Republican Party (after all, he hasn't been a member for long). What he does care about is his own image. In that sense, he is still constrained by public opinion – or rather, his perception of it.
The key question is whether there’s anyone around him who can speak truth to power to a man who has famously little patience for being told he’s wrong. As I wrote in Eurasia Group’s Top Risks report:
Not only does the president-elect have unified government and consolidated control of the Republican Party, but he is building a more personally loyal and ideologically aligned administration than last time. His team will come into office ready to implement – rather than thwart – Trump’s agenda.
If his first 50 days are any indication, the US economy may be in for a lot more trouble until reality pierces his bubble … if it ever does. The beatings will continue until morale improves.
Election campaign posters are pictured on a street ahead of a March 11 general election in Nuuk, Greenland, March 9, 2025.
Greenlanders to vote in historic election
Greenlanders are heading to the polls on Tuesday.
Home to about 60,000 mostly Inuit-descended Greenlanders, the world’s largest island is a semi-autonomous region of Denmark. US President Donald Trump has recently amped up rhetoric about taking over Greenland, even telling Congress he would “get” the Arctic territory “one way or the other.”
Who’s in the race? The ruling faction in Greenland’s single-chamber Inatsisartut is the Inuit Ataqatigiit, a left-wing party that supports independence but opposes mining projects as a means of becoming less economically reliant on Denmark.
The IA is in a coalition with the center-left Siumut, which historically opposed independence. In a shift last month, the leader of Siumut – seen as more open to mining – pledged to hold an independence referendum.
The largest opposition party is the centrist pro-independence Naleraq.
While there’s been scant public polling showing where each party stands, 56% of Greenlanders backed independence in a January survey, while 85% rejected the idea of joining the US.
Does that mean independence? Not automatically, but it’s trending that way.Prime Minister Múte B. Egede has also stepped up calls to break away from Denmark in recent months. A 2009 Danish law gives Greenland the right to unilaterally call an independence referendum.
What result would be good for Trump? No party is interested in joining the US, but Naleraq is more vocally open to closer ties with Washington.
Donald Trump issues a proclamation from the Oval Office
Trump issues Hamas a “last warning”
“Release all of the hostages now, not later, and immediately return all of the dead bodies of the people you murdered, or it is OVER for you,” the US president wrote as part of what he called a “last warning.” The language of his post was direct, even by Trump standards: “I am sending Israel everything it needs to finish the job, not a single Hamas member will be safe if you don’t do as I say,” he wrote. “Also, to the People of Gaza: A beautiful Future awaits, but not if you hold Hostages. If you do, you are DEAD!”
Hamas hasaccused Trump of encouraging Israel to end the ceasefire and resume the war. The Israeli government says there are 59 hostages remaining in Gaza, and as many as two dozen are believed to be alive. Israel has released hundreds of Palestinians from its custody.
The statue of the missionary Hans Egede towers over the city center of Nuuk, the capital of Greenland.
Fire and ice: Denmark and Greenland respond to Trump
Donald Trump’s pledge to take over Greenland “one way or another” in his speech to Congress Tuesday night, prompted starkly different responses from the island itself and from Denmark, which currently controls it.
“Greenland is ours,” Greenland’s Prime Minister Múte Bourup Egedewrote in a combative Facebook post on Wednesday. “Americans and their leader must understand that. We do not want to be Americans, nor Danes… Our future is determined by us in Greenland.”
But Danish officials focused on the bright side. It was a “positive development,” said Danish Defense Minister Lund Poulsen, that Trump’s speech acknowledged Greenlanders’ right to self-determination.
“We strongly support your right to determine your own future,” Trump said, “and if you choose, we welcome you into the United States of America.”
What Greenlanders want: Recent polls show a majority favor independence, while 85% oppose joining America. But opinion is split on whether Trump’s interest is a “threat” or an “opportunity” for the sprawling, resource-rich Arctic island.
All of this hangs over Greenland’s upcoming election, set for March 11. All parties support independence but differ on how to achieve it. The new government will likely call a referendum on this issue, amid growing pressure from Washington.
In advance of the election, Greenland’s lawmakers have tightened restrictions on campaign contributions and property purchases by foreigners.
Read more: Why does Trump want Greenland anyway? Here are three reasons.Playing cards depicting President Donald Trump on display in West Palm Beach, Florida, late last year.
Opinion: The US president plays a Trump card on Ukraine
On the 2016 campaign trail, Democratic presidential candidate Hillary Clinton was fond of repeating the truism: When someone shows you who they are, believe them. In a particular clip from August 2016, Clinton underscored her assessment of then-adversary and Republican presidential candidate Donald Trump by saying, “There is no new Donald Trump.”
Europe has been forced to confront this lesson once again in recent weeks. As the Trump 2.0 administration unveiled its foreign policy priorities, European leaders initially adopted a wait-and-see approach. They even held their breath for a window of opportunity around Ukraine. When Trump adjusted his ambitions to allow for a six-month timeframe to reach an agreement, after promising repeatedly on the campaign trail to end the war on his first day in office, European capitals felt buoyed that he was perhaps pursuing pragmatism.
All their cautious confidence has now left the room – only to be replaced by a rolling panic.
A period marked by Vice President JD Vance chastising Europe at the Munich Security Conference, high-level meetings between US and Russian delegations in Saudi Arabia, and Trump declaring Ukrainian President Volodymyr Zelensky a “dictator” on Truth Social has riled European allies and left them looking for solid ground. A televised White House meeting between Zelensky and Trump on Friday devolved from cordial to transparently contentious in just 45 minutes.
With no apparent points of leverage, Vladimir Putin has managed to bring the US significantly closer to Russia’s preferred position. At this weekend’s summit in London, European leaders were forced to face a familiar and devastating fact: Even an isolated Russia is capable of strategically shifting the conversation as long as Putin leads. No amount of economic pain, coordinated sanctions, or falling of Syria’s Assad regime has changed this.
A set of votes at the United Nations last week measured just how much things have changed. Three years ago, a March 2022 UN General Assembly resolution deploring Russian aggression against Ukraine in violation of the UN Charter was overwhelmingly adopted. The US joined 141 others in favor, while Russia found itself in the company of only four states. Last week, in an about-face, the US sided with Russia (and against its European allies) in two resolutions to mark the third anniversary of the conflict.
These votes reflect not only the gulf that has opened across the Atlantic; they also raise questions about the geopolitical landscape moving forward. After the March 2022 resolution, analysts began speaking fervently of a Global North-South world order. Russia and its near partners (those who stood against) – Belarus, North Korea, and Syria – and its sympathizers (the abstainers) – South Africa, China, India, and Bolivia against the US and Europe. Now, a question with long-term implications is emerging: How entrenched will the US pivot on Russia-Ukraine prove to be, and what does it mean for the future world order?
In the near term, European leaders are wrestling with how to manage the US president. Projects such asHarvard Law School’s Program on Negotiation categorize business negotiation styles from collaborative (I win – you win) on one end of the spectrum to avoidant (I lose – you lose) on the other. Negotiations are frequently circumstance-dependent, meaning that adopting a flexible approach responsive to the business at hand – and one’s adversary – is often advantageous.
Trump is, however, a predictable negotiator. His worldview always leads him to adopt a competitive (I win – you lose) approach in which heanchors a negotiation by “naming a price” early in the process, effectively bounding subsequent rounds. This is what is meant when his foreign policy is described as “transactional.”
With Colombia, for example, Trump threatened 25% tariffs that would escalate to 50% if it did not accept migrant flights. There was no win in these “negotiations.” Colombian President Gustavo Petro gave Trump what he wanted, and Trump backed off. Canada and Mexico were left in similar positions after Trump announced 25% tariffs. Each quickly made concessions to give Trump the win and reduce the economic pain at home. Both now face the hard news that their compromises were not enough, and levies are set to go ahead this week after the brief reprieve.
European allies would do well to remember that there is no new Trump. And there is evidence that some European leaders are beginning to update their model of him, accordingly. As part of a joint press conference last week held with Trump, French President Emmanuel Macron indicated that he and Europe were ready to help guarantee Ukraine’s security by sending troops to Ukraine. Not to be outdone, UK Prime Minister Keir Starmer preempted his own visit to the White House by announcing that British troops would also be available when needed.
Zelensky, who had a front line to Trump during his first administration, is also keenly aware of who he is. Anticipating a Trump 2.0 presidency, Zelensky’s team purportedly devised the idea for the US-Ukraine mineral deal, which the two were meant to sign in Washington on Friday.
In the closing minutes of their fruitless meeting,Trump warned Zelensky, “You’ve got to be more thankful because, let me tell you, you don’t have the cards. With us, you have the cards, but without us, you don’t have any cards.”
Trump prefers to hold all the cards, shuffle them at will, and throw down a new hand to the world’s surprise. Yet, even when the substance shifts – as it has dramatically over the last weeks in Europe – the process remains the same: Trump will be looking for the win.
Lindsay Newman is a geopolitical risk expert and columnist for GZERO.