Why Trump’s Economic Disruption Will Be Hard to Reverse

 

News analysis

Why Trump’s Economic Disruption Will Be Hard to Reverse

 

The president’s turnover of the economic order has unleashed changes that could prove lasting, because other countries will adjust.

 

Patricia Cohen

By Patricia Cohen

Patricia Cohen, who is based in London, reports on about global economics.

https://www.nytimes.com/2025/04/28/business/economy/trump-trade-global-economy.html

April 28, 2025, 12:01 p.m. ET

 

President Trump has made clear his intent to smash the reigning global economic order. And in 100 days, he has made remarkable progress in accomplishing that goal.

 

Mr. Trump has provoked a trade war, scrapped treaties and suggested that Washington might not defend Europe. He is also dismantling the governmental infrastructure that has provided the know-how and experience.

 

The changes have been deep. But the world is still churning. Midterm elections in two years could erode the Republican majority in Congress. And Mr. Trump’s reign is constitutionally mandated to end in four years. Could the next president come in and undo what the Trump administration has done?

 

As Cardinal Michael Czerny, a close aide to Pope Francis, said of the Catholic Church: “There is nothing that we have done over 2,000 years that couldn’t be rolled back.”

 

The same could be said of global geopolitics. Yet even at this early stage, historians and political scientists agree that on some crucial counts, the changes wrought by Mr. Trump may be hard to reverse.

 

Like the erosion of trust in the United States, a resource that took generations to build.

 

“The MAGA base and JD Vance will still be around long after Trump’s gone,” said Ian Goldin, professor of globalization and development at the University of Oxford. No matter who next occupies the White House, the conditions that propelled the “Make America Great Again” movement — widening inequality and economic insecurity — remain. For the rest of the world, there is still a worry, he said, that there could be “another Trump in the future.”

 

As a result, allies are working to strike trade partnerships and build security alliances that exclude the United States. The European Union and South American countries recently created one of the world’s largest trade zones.

 

The Canadian prime minister, Mark Carney, recently proposed building new transportation networks to ease access to global markets outside the United States. Canada is also negotiating to join Europe’s military buildup to reduce its reliance on the United States, while Britain and the European Union are working to finalize a defense pact.

 

“The world moves on,” Mr. Goldin said. Supply chains will be rearranged, new partnerships will be struck, and foreign students, researchers and tech talent will find other places to migrate. “The U.S. is not going to quickly restore its economic position,” he said.

 

“And it’s not just the United States that is so different now,” he added. Mr. Trump is emboldening autocratic leaders around the world, which further chips away the rules-based system.

 

Second, Mr. Trump’s disdain for international institutions only strengthens the influence of China, the principal target of his attempts to use economic pressure.

 

The administration is creating “immense moments of opportunity for Xi Jinping and China,” said Orville Schell, director of the Center on U.S.-China Relations at the Asia Society in New York.

 

China’s top leader, Xi Jinping, is seeking to exploit Mr. Trump’s protectionist turn and chaotic policy reversals to better position Beijing as the defender of free trade and the new leader of the global trading system.

 

Mr. Xi’s argument particularly resonates among many emerging economies in Latin America, Asia and Africa.

 

Africa is a prime example. Mr. Trump has gutted the U.S. Agency for International Development, which delivered food and health care to the world’s poorest. And the reorganization plan for the State Department has proposed eliminating nearly all diplomatic missions across the continent.

 

By comparison, China has already invested deeply in Africa as part of its Belt and Road Initiative, and its push to control more of the continent’s critical minerals. Washington’s withdrawal creates a power vacuum that allows China to solidify its position and gain greater control over mining rights, analysts said.

 

Mr. Trump’s hostility to allies could also undercut government efforts in recent years to keep advanced technology out of China’s hands. Those previously close relations were crucial in persuading the Netherlands and Japan to halt exports of advanced semiconductor equipment to China.

 

Antony Hopkins, a history professor at Cambridge University, added that Mr. Trump is forgetting the important role China plays as an international investor and buyer of U.S. debt. If China’s ability to access America’s large consumer market is severely curtailed, “you are courting the possibility of damaging China’s ability to invest in U.S. Treasury bonds, and if you do that, you’re shooting yourself in the foot.”

 

Another region caught between the United States and China is Southeast Asia. But as Mr. Trump threatened, and then paused until early July, potentially ruinous tariffs on the export-oriented economies of countries like Vietnam, Bangladesh and Indonesia, China has gained an opportunity to strengthen ties.

 

Finally, the evisceration of the federal government’s research and data collection capabilities risks undermining America’s scientific excellence and competitive edge. According to the National Center for Science and Engineering Statistics, the federal government finances roughly 40 percent of the long-term basic research that undergirds the country’s technological and scientific breakthroughs.

 

The administration is cutting billions of dollars in grants to universities, scientists and researchers, undermining work on topics like environmental hazards, disease control, climate and clean energy programs, computer processing, agriculture, defense and artificial intelligence. It has slashed funding for the cybersecurity work that protects the power grid, pipelines and telecommunications. Thousands of veteran and up-and-coming experts have been fired.

 

Institutions are worried about a brain drain as American and foreign researchers turn elsewhere for grants, jobs and academic freedom.

 

Nor would it be easy to quickly reconstitute the networks of people, assistance, information and logistical know-how contained in agencies that have been disbanded or emptied.

 

“This is a revolution dedicated to destroying not only policies but institutions,” Mr. Schell at the Asia Society said. Even if the Democrats were to regain power, it’s not clear “there will be a structure to revive or whether it will have to be arduously rebuilt.”

 

Sometimes a signature event like the fall of the Berlin Wall in 1989 serves as an endpoint to an era. But it is not necessarily always clear in real time if stress on a system is so extreme that it won’t be able to snap back.

 

Many people thought the “Nixon shock” represented such a break, David Ekbladh, a history professor at Tufts University, said. In 1971 President Richard M. Nixon terminated the system of fixed exchange rates and severed the value of the U.S. dollar from gold.

 

The author William Greider called it the “precise date on which America’s singular dominance” of the global economy ended. Chaos enveloped global markets and America’s allies worried that the president’s unilateral decision undermined the postwar cooperative system. Still, the larger economic order held.

 

“The game changed, but it wasn’t a revolution,” said Mr. Ekbladh. Negotiations to open markets continued, the America’s alliances remained intact and the Group of 10 negotiated a new arrangement. Respect internationally for the rule of law prevailed and the United States was still universally seen as the leader of the free world.

 

The question for the United States now is how deep support is for the system that was, Mr. Ekbladh said. These currents of deep discontent with the global economy and have been bubbling up for a long time, and many people voted for Mr. Trump because of his promise to upend the system. “Do the American people want this to go away?”

 

Patricia Cohen writes about global economics and is based in London.