US President Donald Trump’s honeymoon period has ended as his policies appear to be slumping the US economy and national standing.
Trump’s erratic announcements of tariffs where he has repeatedly gone back and forth on the timeline has rattled markets and hurt US credibility. His alignment with Russia and withdrawal from Europe has put the continent on the path of economic and military revival. The escalating tariff wars have put the United States at risk of inflation as well as recession — a worrying phenomenon known as stagflation that even Trump has acknowledged.
In the midst of such worrying signs, there are clear indicators that Trump’s policies are backfiring: the US dollar has lost all recent gains, the Treasury bond yield has fallen compared to European bonds, and investor sentiment is falling in the United States.
Strategic blunders: Friendship with Putin, free hand to Musk
Two defining features of Trump’s second term have been the conversion of Russia from an adversary into an ally and the political rise of Elon Musk who is essentially the Co-President of the United States. Both of these policies are backfiring.
In the name of ending wars, Trump has turned Russia into an ally and Europe into an adversary. The trans-Atlantic alliance with Europe is barely standing and the United Kingdom, France, and Germany are working on national and collective economic and military revival to prepare for a post-US world order.
Incoming German Chancellor Friedrich Merz has announced new €500 billion special fund for infrastructure and defence spending. There are also signs that European nations are forming at least informal intelligence-sharing forums to support Ukraine as the United States has suspended intelligence-sharing with Ukraine.
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