Anna Dickens
Will Torness
Tariff-induced market volatility.
The chainsawing of federal agencies.
Astonishing Oval Office ambushes.
In Donald Trump’s world, there are winners and there are losers.
But we are still only seeing the tip of the ‘Trump 2.0’ iceberg.
Our ability to navigate it will depend on how well we understand how he operates and what drives him.
Last week, we gathered a small, senior group of people from business, academia and government to discuss the psyche, motivations and ambitions of the US president and the wider Trump movement. We have summarised our key takeaways below.
MOTIVATIONS AND PSYCHOLOGY
Trump’s changeability has become one of his hallmarks. It presents world and business leaders with significant challenges. Just look at how the markets have yo-yoed in time to his U-turning tariffs. While his changeable nature derives principally from a lack of any discernible ideology, it certainly isn’t improved by his short attention span.
One thing you can depend on is Trump’s transactional and competitive nature. However, he often uses his political capital unevenly and without a clear strategy. This can undermine his own objectives, and it presents challenges for world leaders and diplomats trying to respond to or negotiate with him.
He is narcissistic, insecure, vain and highly susceptible to flattery. The latter is a tactic that was successfully deployed by Middle Eastern nations on his recent visit to the region but isn’t one that will work for all world leaders.
Trump is driven by a desire to make a lasting mark, whether it is achieved by re-naming the Gulf of Mexico or his stated goal of winning the Nobel Peace Prize for brokering deals in Ukraine and Gaza. While the prize and his own legacy may be the driving force behind his desire for peace, he is uncomfortable with –even squeamish about – the use of military force.
Given his expansionist tendencies, his aversion to armed conflict, particularly of the nuclear variety, must be seen as a good thing.
TRUMP 2.0 IS AS IF TRUMP 1.0 SAID, “HOLD MY BEER”
Stymied by the guardrails of his first term, Trump has learned to govern the way he wants (more like a CEO) and challenge norms in a way he was previously unable to, aided in part by controlling or bypassing both houses of Congress and having previously stacked the judicial branch.
Following two impeachments and multiple investigations into his conduct, he has an appetite for revenge. He still views Biden as a true enemy and, just this week referred to his predecessor’s administration as “scum” in a social media post that was apparently intended to mark Memorial Day.
Given opposition parties in America don’t have designated leaders, Trump lacks a clear current Democratic rival. It is yet to be seen how he will respond to any emerging prominent figures within the party.
But one thing is for sure, Trump 2.0 is much more than just one man. The wider Trump/MAGA movement is operating more efficiently than in his first term and, while Trump is the spotlit star, a cast of protagonists are jockeying for position behind him.
UNCHARTED TERRITORY
The sheer volume of news generated in the first four months of Trump’s second term could rival some of his predecessors’ full terms. While it may feel disorderly, it is a tactical and organised form of chaos that distracts from the reality of what is happening.
American democracy is in uncharted territory. The wider Trump movement could fundamentally change the game, long after he leaves office. Through hollowing out Federal Agencies and bending the Constitution to near breaking point, much of the change his administration is enacting will last a generation or longer.
While historical precedence says things could change at the midterm elections, the polls aren’t as clear. Between the 2020 and 2024 elections, multiple voting restrictions were put in place at the state level, which will make it much harder for Democrats to win the upper chamber and gain enough power to challenge the administration.
Ultimately, Trump is a symptom of American decline and the move from a unipolar to a multipolar world.
LOCAL IMPACT AND OPPORTUNITIES
Trump’s administration has been systematically purging federal agencies of experts, cutting research and project funding that pertains to many sciences – particularly climate science – and attacking academia. The displacement of this talent and disruption of key industries presents an opening for the UK.
Our universities sector should be well-placed to capitalise on Trump’s ongoing and recent attacks on universities and international students. However, the health of the higher education sector here in Scotland presents challenges around capitalising on those opportunities, while the UK government’s recent white paper doesn’t provide many positive attractions for prospective international students.
Our renewables industry has already seen opportunity and interest from the US, which may have prompted Trump, late last week, to call on the UK to “stop with the costly and unsightly windmills”. Keir Starmer has already spent domestic capital on his cautious but tactical approach to dealing with Trump. If Trump pushes further on this agenda, it won’t be easy for Starmer to keep him happy.
Trump’s influence has also given a boost to the defence sector, while investors are watching closely. Given the volatility in America and American markets, some UK investors are cautious around businesses with US exposure, while others see opportunities to deploy patient capital at a discount for the hope of longer-term returns.
On the political side, the recent election outcomes in Canada, Australia and Romania indicate a backlash to the right-wing populism that defines the Trump effect.
Closer to home, all eyes are on Reform UK in the run up to next year’s Holyrood elections, to see how deeply a similar brand of populism – albeit one that isn’t easily placed upon a traditional right/left political spectrum – is rooted in Scotland.
In conclusion, this Trumpian context we are living in is wide-reaching and long-lasting. Understanding it is critical.
If you’d like to discuss these issues further or politics closer to home, please get in touch:
- Anna Dickens, partner at Charlotte Street Partners and Kentuckian by birth –anna.dickens@charlottestreetpartners.com
- Will Torness, client manager at Charlotte Street Partners and South Dakotan by birth – will.torness@charlottestreetpartners.com