This Week in The Lens

The Lens is FrontierView’s weekly newsletter published by our Global Economics and Scenarios team. Each week, The Lens features easily digestible content that dives into the business implications of macroeconomics on the market today.

Economic and geopolitical trends and insights from FrontierView’s Global Economics and Research team
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Three weeks into Trump’s second term, amid the deluge of news and announcements, a picture is starting to emerge of how his presidency will play out. 

For one, the man has not lost his knack for unpredictability. From his comments on the  mass displacement of Gazans  to his renaming of the Gulf of Mexico to that of America, Trump really does continue to surprise and wrongfoot observers.

From a policy perspective, it has been a mixed bag. His mission to slash government spending is off to a fast and furious start, and Trump has shown that he is willing to test the limits of his authority. On tariffs, on the other hand, it has been a different story: despite all the noise and headlines,  Trump has been more restrained in his implementation of tariffs  than his campaign rhetoric suggested: he has held off, for example, on applying tariffs on all of the US’s trading partners. This is something we expected, and are encouraged about. 

Beyond Trump, Republican infighting is also emerging as a theme: while House and Senate leaders continue to express optimism about implementing Trump’s policies, there exist some fundamental disagreements within the GOP, from how exactly to pass the agenda through Congress, to the scale of tax cuts, and the fate of politically sensitive programs like Medicaid.

While it is helpful to draw early lessons, it is also worth remembering the first point: Trump is fundamentally unpredictable, and with three years and eleven months to go, what is certain is that  many more surprises await us.

There were many theories about Trump’s plans when it came to the future of the Israeli-Palestinian conflict, but few expected his “Riviera of the Middle East” proposal. 

The deeply controversial plan, which envisions mass displacement of Palestinians, US ownership of the Gaza Strip, and its transformation into an “international, unbelievable place,” has drawn sharp criticism, including from Arab states, and even unsettled some of his own supporters.

But beyond the immediate backlash, one question beckons: will it actually happen? Our  latest analysis  examines the future of the Gaza Strip and the potential for this proposal to materialize.

As Trump’s comments on the region, and his last-minute delay on tariffs on Mexico and Canada earlier this week show, “will it actually happen?” is a question that will define the next four years. Our  freshly released report  helps you separate what’s mere rhetoric from what could actually become reality.

Over a year ago, in our first set of scenarios on the US election, we highlighted that if Trump returned to the White House, he and his administration would hit the ground running. That prediction has well and truly come to fruition.

Beyond the host of executive orders signed on Trump’s first day, his administration has been much quicker in getting cabinet members approved, something which dogged the first few weeks of his first presidency. He has also started implementing some of his key policies, some of which have been a shock to the system, such as the freeze of all federal grants and loans, or an email sent to all federal employees giving them the option to resign.

Trump also showed that he is more than willing to use tariffs as a weapon: after refusing to accept two flights transporting deported immigrants,   Colombia saw itself threatened with 25% , and then 50% tariffs. Its president, Gustavo Petro, quickly backed down.

Amidst all the noise generated by a Trump presidency, it will be incredibly difficult for companies to plan. This is why they need to be proactive rather than reactive, and ensure they have robust scenarios in place that will help them quickly adapt to changing circumstances. Our “Navigating the First Year of Trump 2.0” report, out this week, is designed precisely to do that.

Bye bye Gulf of Mexico, hello Gulf of America! 

Trump’s first day in office was a busy one. It involved signing a record-breaking number of executive orders (in front of a crowd, no less) ranging from the mundane, such as protecting the architectural heritage of federal buildings, to the pivotal, like declaring a national emergency at the southern border and undoing Biden’s clean energy agenda. And of course, renaming a few of America’s geographical features…

In capitals across the world, government officials breathed a sigh of relief: no tariffs. But this relief was ephemeral: the US’s trading partners will indeed be targeted, starting with Canada and Mexico. China and Europe are next. Blanket tariffs are still on the table. 

Needless to say, officials in Ottawa, Mexico City, Beijing, and Brussels will all be frantically reaching out to the Trump administration in an attempt to “cut a deal” and stave off tariffs – it remains to be seen if their efforts will be successful. In the meantime, uncertainty remains the name of the game.

Just four days away from Trump’s second presidency, the world is getting ready for his return to the White House.

Countries who could find themselves on the receiving end of tariffs are making overtures and concessions, in the hope that they will be spared: Mexico is stepping up security at the border and implementing  plans to substitute Chinese imports . The EU is mulling plans to buy more American LNG. China has expressed its desire to “make a deal”, while also readying its own arsenal of trade restrictions.

Corporate America is also positioning itself for Trump’s return, with several CEOs from Jeff Bezos to Mark Zuckerberg, donating to Trump’s inauguration in an attempt to curry favor with the incoming president. 

Meanwhile, in the White House, the Biden administration has imposed a set of  sanctions on Russia’s energy  sector that is set into law and, in doing so, will become “Trump-proof”. Some even attribute the recently agreed ceasefire in Gaza to his imminent return.

Such is the impact of Donald Trump, that both adversaries, allies, and even his own predecessor, are recalibrating their strategies to navigate a world shaped by his unpredictable and transactional style. From trade to foreign policy, the prospect of Trump’s return is reshaping agendas, even before he sets foot into the Oval Office.

Read our insights from this week:

afd
Extremist parties’ strong performance will add pressures to the Germany’s ruling coalition The far-right AfD’s came first in the state elections in Thuringia, gaining 32.8% of the vote and well-ahead of the CDU’s 23.6%, which came second. Similarly, the party performed strongly in Saxony, gaining 30.6% […]
Our View The 2025 federal budget, totaling BRL 5.86 trillion, a 5.45% YOY increase, was presented by the executive to the Chamber of Deputies on the night of August 30. While the budget aims to zero out the deficit by next year, which is a positive […]
youth unemployment in China
China’s economic outlook varies widely under different real estate scenarios China’s real estate sector, once a cornerstone of its economic growth, is spiraling downward. Investment and sales have seen declines of approximately 30% and 50%, respectively, since their peak in Q2 2021. This downturn has emerged […]

The Author

Antoine Bradley

Senior Analyst, Global Economics

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