Trump's New America

Democratic candidate Grover Cleveland was the first at the end of the 19th century. It would be another 130 years to see a second US president elected to serve two non-consecutive terms – and that is Donald Trump. This is enough to highlight how the feat is anything but simple. Indeed, it is so difficult that all – or nearly all – political analysts, the media and much of the public considered Kamala Harris the natural favorite, or at least able to play it out at the last vote, despite the hastily prepared candidacy and some doubts within the Democratic Party itself. Trump's victory will also inevitably have great repercussions globally and in Europe in particular, both from an economic-political and military perspective – most importantly because it happened in such a clear-cut way. We will talk about it further in this interview with Vincenzo Galasso, full professor of Economics and Head of the Department of Social and Political Sciences at Bocconi University.

Before the election, many analysts argued that relations with Europe would change regardless of who won. We do not know how it would have gone with Harris, but perhaps we can dare to speculate more with Trump.

It is true that we have already seen Trump at work. He, however, remains a multifaceted figure who is difficult to decipher. What changes greatly, compared to his first term, is that he now has a vice president – JD Vance – who acts slightly as his theorist, the one destined to transform MAGA from a Trumpian improvisation to a real ideology. This represents an important change compared to the past, even in relations with Europe.

At the moment, the crucial turning point in Europe is the situation in Ukraine.

Trump has already made clear that the war could end with some concessions from Ukraine, and that the country could not join NATO at least for the next 20 years. It is difficult to say how this will affect Europe, just as it is difficult to say what will happen to the Baltic states given that Russia will draw its consequences; that is, it may be tempted to expand... even if the Baltic states are part of NATO.

The other major issue, on which the future president has already expressed himself in the past, is that of NATO. It is an issue dear to Americans in general.

Relations with NATO will change, and they probably would have changed even if Harris had won. The feeling in the United States is that NATO is a sort of American blanket for Europe, but for which Europe does not pay enough – certainly less than the 2% of GDP set for 2024 by the NATO guidelines, while the US pays 5%. Given his geopolitical view, Trump – much more concerned with China than with Russia – could also lean towards a complete disengagement from NATO, as France did in the 1960s. 

A US exit from NATO would highlight one of the European Union's greatest weaknesses...

The European Union would be confronted, even aggressively, with one of its greatest weaknesses – namely, the absence of a common defense policy. This would be a very delicate step, which we will try in every way to avoid perhaps by adopting an intermediate solution, that is, by increasing the military spending of European countries and bringing it to that decisive 2% we were discussing earlier. However, the United States could then request even more. It is terrible to call it 'blackmail', but... 

The issue of military spending, however, does not only concern NATO – eliciting a whole series of reflections.

We will start with industrial policy, given that many countries – including Italy – produce and sell weapons. This is certainly a relevant issue. The main argument, though, remains the conviction of the Americans – and, in this case, of Trump himself – that Europeans must take more responsibility in terms of defense. However, we must not forget another consideration: if there were talk of a common European military defense at this time, the United Kingdom – the primary and historic ally of the United States – would be left out. It is a difficult puzzle to put together, with several elements at play as we have seen, from industrial policy to common defense and the United Kingdom matter. I am convinced that these issues will be forcefully revealed and closely connected with what will happen in Ukraine.

Returning to the reflections on Europe, the economy is another major issue. Trump brushed up on his threat of tariffs again.

In this case, the "war" – if we want to call it that – is not with Europe, but with China. Europe, and certainly also Italy, which has a positive trade balance with the United States, risks remaining in the middle. Furthermore, this is during a historical period in which the other major country to which we export, Germany, is also going through a rough time. Our economy could therefore suffer a double shock. Trump's approach with China is an economic policy move, but with important implications for both domestic and foreign policy. The risk is that the United States will be isolated and that China will be able to expand in some countries, such as Mexico, historically very close to the United States. It is ultimately possible that Trump will adopt some more superficial, politically significant measures to please the electorate, rather than measures with real impact on international trade. Let us not forget that Trump is a very pragmatic person. He knows very well that inflation was one of the winning themes of his election campaign, and he should know that a trade policy based on tariffs would increase it.

Another topic: the role of Elon Musk, considered decisive in the election campaign. Will he be rewarded?

Musk made a large financial contribution to Trump's election campaign, about a tenth of the total. That is not all, though. It is easy to think that his closeness to the future president will have a positive impact on the country's industrial policy specifically. Many hope that it goes in this direction – including Nobel Prize winner, Daron Acemoglu – with regulation, most importantly, on new technologies and artificial intelligence. The concern, though, is that Elon Musk will push in the opposite direction, i.e. complete deregulation and greater concentration of economic power. This is an epochal change compared to not that long ago when economic power was said to be in the hands of big business; now those dominating are big social media. 

There is another, more domestic issue – the announced replacement of bureaucratic top management.

Yes, Trump – whose party, as a result of the elections, won a majority in both the House and Senate – wants to worsen the spoils system and place his men and women at the helm of the government’s major agencies. This, in some degree, would violate the spirit of the American Constitution, which calls for neutral bureaucracy to serve as a check on politics. With this move, Trump would not be subject to any control – at least until the Midterm elections.

Let us take a step back. In your opinion, when did Trump begin to build his victory?

After the defeat in the 2020 elections and the events on Capitol Hill in 2021, the Republican Party could have somehow ousted Trump and replaced him with a leader who was conservative but not populist. However, the party was not strong enough to do it, perhaps due to a lack of capable candidates who were willing to go above and beyond in this sense. From then on, Trump took back the party. Then there is another consideration: the Democrats have always claimed to have the majority of the votes in the country, even if they were sometimes penalized by the electoral system. Well, perhaps now this narrative is no longer true, and Trump managed to keep the party because the electoral base had shifted in the meantime.