While Donald Trump’s election victory has a tendency to dominate the airwaves, there are some other big factors at play globally. The Trump 2.0 administration portends disruption of the global trade mechanism, making it a BIG issue. And we’ll be talking a lot about it going forward. But beyond Trump 2.0, here are some other geopolitical shifts:
- Europe is seeing political upheaval. French politicians ousted Prime Minister Barnier after a snap election last summer split broke a parliament majority. France’s centrist President Emmanuel Macron is likely to see increased opposition and calls to resign as an election cannot occur until June. A shift right is likely.
- German Chancellor Olaf Scholz lost a confidence vote, likely to lead to parliamentary elections in late February. His leftish party has taken fire from conservative opposition pushing for debt reduction in the face of heavy spending. It is likely that the Germany government will shift right.
- Canadian Prime Minister Justin Trudeau’s liberal government is crumbling. Trudeau’s liberals are trailing by 20% versus conservatives in the polls. Pierre Poilievre, the conservative leader has assailed Trudeau over spending, leftist policies (a recent carbon tax), and opposition to fossil fuels. Deficits have soared as the Canadian dollar has plummeted. With the recent resignation of Trudeau’s Finance Minister Chrystia Freeland, it appears Trudeau’s days are numbered as well with a likely conservative shift coming.
- Latin America saw the re-election of leftist Lula da Silva in Brazil (his 3rd term) and leftist Claudia Sheinbaum in Mexico. Unlike many countries, Mexico has a set 6 year term (one term only). President Sheinbaum is a Morena party member like her predecessor Andrés Manuel López Obrador (AMLO) and is committed to his causes of re-writing the Mexican constitution, emphasizing environment, sustainability and government-driven health/food policies. She will walk a fine line with Trump due to the heavy economic dependence with the U.S.
- Argentine President Javier Milei just passed his one-year mark. As an “anarcho-capitalist” he campaigned with a chainsaw and pledged heavy austerity cuts. He has slashed 9 government agencies, furloughing 30,000 government employees. After a painful year Argentine economic optimism has surged. His efforts of deregulation and austerity led Trump to call him “His favorite president” when he quickly came to Mar-a-Lago following Trump’s victory. Challenges remain but expect continued free-market reforms and a cozy U.S. relationship for Argentina.
Politics ebb and flow back and forth among parties over time. 2024 and 2025 elections are being defined by the COVID pandemic with heavy stimulus that drove up inflation and debt, as well as distrust of incumbent leaders. This led to broad incumbent turnovers in 2024 likely to continue into 2025.