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Analysis
ZOHRAN MAMDANI, Rama Duwaji, MIRA NAIR, MAMOOD MAMDANI during an election night event at The Brooklyn Paramount Theater in the Brooklyn borough of New York, US, on Tuesday, Nov. 4, 2025.
Last Tuesday, a self-identified democratic socialist who ran on making New York affordable for the 99% won the city’s mayoral race in a landslide, defeating former Governor Andrew Cuomo. And the reactions have been predictably hysterical.
Some critics are claiming that Mamdani will impose Sharia law and turn New York into Venezuela. Business leaders and billionaires are warning about a mass exodus. The Washington Post editorial board sees "class warfare" on the horizon. And President Trump, never one to waste an opportunity for confrontation, is threatening to cut federal funding to the city.
Everyone needs to take a breath. Yes, a 34-year-old Muslim who's never managed anything bigger than a state assembly office with five staffers just won the most powerful mayoral job in America on a platform of free buses, rent freezes, universal childcare, and soaking the rich. But most of that isn’t going to happen. Why? Because the mayor of New York City, for all the pomp and circumstance of the office, has remarkably little unilateral power to do... well, almost anything.
Let’s start with the most basic and binding constraint on Mamdani: money. The city is legally required to run a balanced expense budget each year, meaning that every dollar the mayor wants to spend on new programs has to come from somewhere else – either budget cuts elsewhere or new revenue.
Mamdani has proposed increasing the top corporate tax rate from 7.25% to 11.5% and levying an additional 2% tax on incomes over $1 million to fund his ambitious agenda. But – and this is key – the mayor of New York can’t raise income or business taxes on his own. The power of the purse belongs exclusively to the state legislature in Albany and requires Governor Kathy Hochul's signature.
And Hochul – a centrist Democrat who was Andrew Cuomo's lieutenant governor – has already ruled out tax hikes. "I'm not raising taxes at a time where affordability is the big issue," she stated flatly. Not surprising given that New York already has a combined top marginal income tax rate of 51.776 percent – the highest in the nation. Mamdani could raise property taxes with City Council approval, but that wouldn't solve his problem – property taxes don't discriminate by income, hit middle-class homeowners and co-op owners who've already seen taxes skyrocket, get passed through to renters, and wouldn't raise nearly enough to fund his agenda anyway.
What does this mean for free buses? Mamdani made this a centerpiece of his campaign, but it’d cost the Metropolitan Transportation Authority $630 million annually in lost fares, and the mayor doesn't control the MTA – the governor does. To make buses free, he would need to get either the City Council to approve funding replacement or the state to pony up the money.
What about universal childcare? The mayor could operationally run such a program, but funding it would cost $5 billion annually – requiring either massive budget cuts elsewhere or tax increases he can't authorize and Albany and Hochul won’t. A $30 minimum wage by 2030? Can't do it without the state legislature. Building 200,000 affordable housing units? That would require borrowing $70 billion, $30 billion more than the city's debt limit – and Albany’s approval is needed for that, too. Are you starting to see a pattern?
Even the rent freeze – probably Mamdani’s most viable promise – would face challenges. Yes, the mayor appoints the Rent Guidelines Board, and there’s precedent for political appointees freezing rents. But the RGB is supposed to follow economic indicators or risk lawsuits, and it doesn't always do what the mayor wants. Crucially, even if Mamdani gets his freeze, it’d only cover about one million rent-stabilized apartments – not market-rate units, condos, co-ops, or the thousands of newer "affordable" units governed by federal and state regulations.
What can Mamdani do? He can make buses faster through dedicated bus lanes and Department of Transportation enforcement. He can open city-run grocery stores through the Economic Development Corporation, which already operates retail food operations, for relatively little money. He can reorganize the NYPD to create an Office of Community Safety, even if a full department would need City Council approval. And he can use new charter amendments passed in November—which reduce City Council and community board veto power over housing—to accelerate private development, even if he can't fund the government-built affordable housing he promised. Not nothing, but not exactly a socialist revolution.
The good news is that Mamdani’s tenure doesn’t need to be revolutionary to be successful. Fiorello La Guardia had it right when he said, “There is no Republican or Democratic way to pick up the garbage.” There isn't a socialist way either. What most New Yorkers will care about when they go back to the polls in four years is whether their mayor kept the subways running, the trash collected, the schools functioning, and the streets safe. That’s what the job is largely about, and why the mayor’s real power isn't passing laws or raising taxes but appointing hundreds of commissioners and department heads and managing the 300,000-person workforce that runs city services. Here's where a truly radical mayor could do real damage: hiring incompetent ideologues and cronies to run the NYPD, the Department of Education, sanitation, emergency management, and so on.
Given Mamdani’s lack of an administrative track record, the jury is still out on whether he will govern as an ideologue or a pragmatist. But the early signs are encouraging. His transition team is heavy on people with actual records of accomplishment. He’s talking to experienced hands like Maria Torres-Springer, who's served multiple mayors and knows how to get things done at City Hall. He’s expressed a desire to keep Jessica Tisch as police commissioner, a widely respected technocrat whom business leaders and moderates trust. And in his victory speech on Tuesday night, Mamdani quoted his defeated opponent’s dad Mario Cuomo about campaigning in poetry but governing in prose, signaling that he understands the job ahead will take more than just slogans.
The real risk isn't that Mamdani will turn New York into a socialist hellhole, but that he won't be able to accomplish much of anything at all. This isn't some low-tax, low-spending jurisdiction where a progressive can open the spigots and transform society. New York already has some of the highest taxes and spending in the country. But the problems that actually make the city so unaffordable – entrenched public unions with ironclad contracts, overregulation, a bloated bureaucracy – have no easy fixes and are mostly beyond any mayor's control.
We've been here before. When progressive Bill de Blasio won the mayoralty in 2013 on a very similar “soak the rich” campaign, the same people predicted an apocalypse. Crime would explode, the tax base would flee to Florida, and the city would enter a death spiral. De Blasio made many mistakes during his eight years at Grace Mansion, but none of that (save for crime going up during the pandemic, not just here but everywhere) came to pass. New York remained New York: dirty, noisy, expensive, still the greatest city in the world.
I don’t know if Mamdani will be a good mayor. But people who've been predicting the death of New York for forty years still haven't learned that betting against the city is a sucker's game. We’ve survived far worse than an inexperienced progressive mayor with big ideas and limited power. And if you look past all the pearl-clutching, Mamdani’s victory reveals something far more interesting about where American politics is headed.
Mamdani ran a left-wing populist campaign focused almost entirely on one thing: affordability. He didn't win on identity politics or progressive social policy or democracy or Trump's corruption. He won by speaking to New Yorkers’ economic anxiety while mostly avoiding the more polarizing cultural issues that alienate moderate voters and tear the Democratic Party apart.
And here's the thing: economic anxiety resonates far beyond New York. Yes, the city's electorate is younger, wealthier, more educated, and less white than the rest of the country. These people are particularly concerned that they and their children won't have the opportunities their parents had – whether because of inflation, housing costs, student debt, AI displacement, or disillusionment with capitalism. But voters everywhere are angry at a system that feels rigged for the rich and powerful, less meritocratic capitalism than kleptocracy. That grievance is not exclusive to liberal urbanites.
Just as Trump won by convincing Americans that democracy was broken and he alone could fix it, expect to see a wave of left-wing economic populism that mirrors right-wing Trumpism but comes from a completely different place. Neither the current Democratic establishment nor Trump himself – who's abandoned "drain the swamp" for pay-to-play corruption – is positioned to capitalize on this energy.
It won't be Mamdani either. His Israel-Palestine and identity-politics positions don't play nationally like they do in deep-blue New York (frankly, neither do his demographics). But his economic playbook will. The candidates who can speak most credibly to economic anxiety and promise to disrupt a captured system – without the culture-war baggage – will have an edge in 2026 and 2028.
A fruit and vegetable stall is lit by small lamps during a blackout in a residential neighborhood in Kyiv, Ukraine, on November 6, 2025, after massive Russian attacks on Ukraine's energy infrastructure in October.
As a fourth winter of war approaches, Russia is destroying Ukraine’s energy grid faster than it can be rebuilt. “We lost everything we were restoring,” Centrenergo, one of Ukraine's largest power operators, said on Facebook following a devastating weekend assault that reduced the country's energy capacity to “zero.”
Since Sunday, most of Ukraine has been plunged into intermittent darkness as the government schedules rolling blackouts to preserve what little power remains. Russian drones and missiles have pummeled power plants, substations, and gas infrastructure in a relentless campaign that has intensified as temperatures drop. Further complicating the situation, Ukrainian authorities charged senior energy officials with a $100 million kickback scheme – which has outraged the public and raised concerns that graft could ward off desperately needed energy assistance from the European Union.
“Since the start of the war, Russia’s main objective in attacking civilian energy infrastructure is to demoralize the population and inflict economic damage,” says Eurasia Group analyst Dani Podogoretskaya. The targets extend beyond power facilities to hospitals, apartment buildings, schools, and kindergartens – all aimed at breaking Ukrainian resolve.
More than three years into the conflict, the strategy appears to be working, at least on paper. Some 69% of Ukrainians now say they are ready to settle for a negotiated end to the war, up sharply from just 22% in 2022. “This is exhausting for Ukrainians,” says Eurasia Group Russia expert Alex Brideau. “They are resisting, but it is taking a toll.”
Yet, with Vladimir Putin showing no signs of coming to the negotiating table, Ukrainians are simultaneously growing more resilient and resigned, adapting their lives to sustain the war effort. Many have purchased small generators to keep the lights on.
Ukraine's military isn't surrendering to the initiative either. Though far less frequent than the strikes they endure, Ukrainian forces have landed attacks deep inside Russia, targeting its energy infrastructure to bring the war home to ordinary Russians. “[This weekend’s] strikes have reinforced the imperative of fighting and winning,” says Podogoretskaya.
A chill across Europe. Ukraine’s energy crisis won’t remain contained within its borders. As the country’s ability for power generation collapses, it must turn to European neighbors for electricity and gas imports — a shift already reverberating through EU energy markets strained since Russia’s invasion.
The pressure is showing up in prices. German baseload electricity for January 2026 delivery has climbed nearly €10 per megawatt-hour in recent weeks, now exceeding €105/MWh and up from €94/MWh in November. Ukraine’s increased demand for imported power will continue pushing regional prices upward as winter deepens.
But the longer-term consequences may prove even more significant. Russia’s systematic destruction of Ukrainian energy infrastructure has poisoned any remaining prospects for cooperation. The idea of resuming Russian gas transit to Europe through Ukrainian pipelines – once a cornerstone of the continent’s energy supply – is now politically dead.
“Any transit arrangement would be viewed as rewarding Russia's deliberate targeting of civilian infrastructure,” says Podogoretskaya. Ukrainian politicians, energy officials, and security experts are united in their opposition to serving as a conduit for Russian gas after watching their power sector and domestic production facilities reduced to rubble. This stance will shape European energy policy for years to come, cementing the EU’s pivot away from Russian energy dependence – even as the costs of that transition continue to mount.
US President Donald Trump welcomes Indian Prime Minister Narendra Modi to the White House for bilateral discussions about trade and security on February 13, 2025.
After months of tensions between the world’s richest country and the world’s most populous one, it appears that the United States and India are on the verge of making a trade deal.
“We’re going to be bringing the tariffs down,” US President Donald Trump said during a swearing-in ceremony for the newly-minted US Ambassador to India Sergio Gor, while noting that India’s purchases of Russian oil have decreased. He didn’t give a timeframe, but added that the two sides were “pretty close” to a deal.
The inevitable question will be how much Trump lowers the tariff. The US president slapped a 25% levy on India in late July, in part because of Delhi’s purchases of Russian oil. When India refused to tell their companies to stop buying Russian crude, the tariff doubled to 50%.
“India’s oil purchases from Russia are on the downward trend,” Ashok Malik, partner and chair of The Asia Group’s India practice, told GZERO. “This creates a pathway for the removal of the 25% ‘oil tariff’ on India and, coinciding with Ambassador Sergio Gor’s arrival, steps towards the trade agreement.”
How did we even get here? Trump and Indian Prime Minister Narendra Modi were two peas in a pod during the former’s first term in office. The two leaders believed in espousing strength and in a foreign policy that prioritized bilateral relationships over multilateral agreements. They both viewed radical Islam and China with skepticism. When they held a giant rally together in Houston in 2019 – labeled, “Howdy, Modi” – the pair held hands.
“India was central in terms of our Asian strategy… It was incredibly simpatico between the two leaders,” Matthew Bartlett, who served in the US State Department during Trump’s first term, told GZERO. “Now there’s a new, rather difficult dynamic – maybe dysfunction – to it, and you would hope that we would be able to put this back on track in short time.”
When Trump returned to office earlier this year, it appeared that the two would start where they left off. Modi visited the White House in February, and the two leaders exchanged effusive messages.
But the good times didn’t last. Six months ago, when India and Pakistan announced a ceasefire following a brief flare-up in Jammu and Kashmir, Islamabad credited the Trump administration for helping to foster the peace, whereas India said the White House wasn’t involved. The issue was exacerbated when Trump told Modi over the phone that he was proud of the role he played in fostering peace – the Indian leader rejected his counterpart’s account.
Then in July, the tariff war began. Months later, even as the US has struck deals with the European Union, Japan, South Korea, and its greatest rival China, it still hadn’t reached any sort of truce with India. Washington’s 50% levy on India is now larger than the 47% effective rate on China.
“The entire dialogue between India and the US reached a boiling point where it was just very tense in terms of relations,” said Bartlett. “I think even Modi dodged Trump on his last trip.”
Further, Trump announced last week that he would exempt Hungary from Russian oil sanctions. No such luxuries were afforded to India, the second-highest purchaser of Russian oil.
The duties have taken a toll: Indian goods exports to the US, its largest foreign market, are down 40% over the last few months. Smartphones and pharmaceuticals were hit especially hard – exports of the former plunged by 58% from May to June. In September, the country’s trade deficit reached its highest level in 13 months.
Then the season changed. Tensions started to ease during the fall, as Modi and Trump shared kind words on social media following a September phone call. Then India started to comply with the new sanctions on Russian crude – they won’t even come into place until Nov. 21. A deal now appears imminent.
While conversations are moving in the right direction again, Malik says the relationship isn’t yet back to the heady days of that famous Houston rally.
“Does this resolve all problems and clean up all the bad blood from the past few months? Likely not,” said Malik. “But that’s fodder for a considered assessment on another day.”
Pope Leo XIV presides over a mass at Saint John Lateran archbasilica in Vatican City on November 9, 2025.
It’s been six months since the Catholic Church elected its first American pope, Leo XIV. Since then, the Chicago-born pontiff has had sharp words for another high-profile US leader: President Donald Trump, most recently urging “deep reflection” on Trump’s treatment of migrants. Leo’s interventions have irked the White House – but could they also shape political opinion in America?
What has Leo said – and how has the White House responded? Shortly after his election as Pope, a series of tweets by Robert Prevost (Leo’s lay moniker) attacking Trump’s migration policies and the views of Vice President JD Vance went viral, prompting former Trump advisor Steve Bannon to call Leo the “worst pick for MAGA Catholics.” Vance, who converted to Catholicism at age 35, responded, “I try not to play the politicization of the Pope game.”
In October, Leo described Secretary of War Pete Hegseth’s remarks to US generals that, “The only mission of the newly restored Department of War is this: warfighting, preparing for war and preparing to win, unrelenting and uncompromising in that pursuit,” as “worrying.” He also questioned whether someone who is against abortion but “in agreement with the inhuman treatment of immigrants who are in the United States” could be considered “pro-life.” White House Press Secretary Karoline Leavitt, herself a Catholic, subsequently rejected the pope's claim that the Trump administration's treatment of migrants was inhumane.
On November 7, Leo criticized ICE for denying deportees their religious rights, including to take communion, and added that US military and enforcement actions could “fuel regional tension” in Latin America. In response, Homeland Security Assistant Secretary Tricia McLaughlin posted to X that, “Religious organizations have ALWAYS been welcome to provide services to detainees in ICE detention facilities.”
Continuity with Pope Francis. Leo’s predecessor was also a vocal critic of Trump. In February 2016, Francis criticized Trump’s plan for a border wall with Mexico, and in February 2025 penned a letter to Catholic bishops in the US stating that US deportations were damaging “the dignity of many men and women.”
How are Leo’s words being received by American Catholics? Reactions vary. Some American bishops and Catholic charities say Leo’s comments have emboldened their efforts to assist immigrants. But some conservative US Catholics are dismayed that the pope would challenge a president they see as a friend of their faith.
Leo is also seen as attempting to sway Catholic lawmakers. According to Catholic historian Austen Ivereigh, “When the Pope speaks very definitely like this, it does put pressure on the US administration – particularly those who identify as Catholics.”
Could Leo influence the Catholic and Hispanic vote in the US? In 2024, Trump got 55% of the Catholic vote; one in five Trump voters was a follower of the faith. He got 42% of the Hispanic vote, up from 28% in 2016 and 32% in 2020. However, in last week’s gubernatorial and mayoral elections, Latino districts went significantly Democrat, voting 68% for the Democratic candidate for governor in New Jersey and 67% in Virginia. Support is slipping due to anger at immigration crackdowns – the same issue taken up by Leo.
The extent to which the pope can influence voting patterns is unclear, but his views appear to align with many Hispanic Catholics, 65% of whom believed immigrants should have a pathway to citizenship, per a PRRI poll last year. If Trump continues to adopt a severe tone on immigration, he risks repelling a group of voters who had been shifting in his direction as the US heads into a midterm election year.
Brazil's President Luiz Inácio Lula da Silva and Germany's Chancellor Friedrich Merz walk after a bilateral meeting on the sidelines of the UN Climate Change Conference (COP30), in Belem, Brazil, on November 7, 2025.
When it comes to global warming, the hottest ticket in the world right now is for the COP30 conference, which runs for the next week in Brazil.
What’s COP30? It’s the 30th installment of an annual UN-backed event that brings together world leaders, diplomats, and experts for two broad purposes: finding ways to slow global warming and to address the impacts of climate change.
This year’s meeting, held in the Amazon rainforest city of Belém, comes amid huge new challenges to the climate agenda. The government of the world’s largest economy, the US, is once again actively hostile towards climate policy. The world’s leading philanthropist, Bill Gates, has recently downgraded climate change as a key concern.
What’s more, it’s been ten years since nearly 200 countries signed the Paris Agreement, pledging to reduce emissions in order to keep global temperature rises within specific targets. The efforts have largely failed, and the targets are now unreachable.
So what is achievable at this year’s COP? To learn more we sat down with Herbert Crowther, an energy and climate expert at Eurasia Group. Our conversation has been lightly edited.
GZERO: Herbert, you’re on your way to COP 30 in Brazil. How does this COP feel different from previous ones? Are the stakes higher? Lower?
This COP feels different because there isn’t a single trademark deliverable or negotiating point. Most other recent COPs have had that: last year at COP29 it was about setting financing targets, for example.
This year the larger question is how to find ways to address the current geopolitical obstacles. The Brazilian COP hosts have tried to frame this in terms of COP30 being about “implementation” of prior commitments rather than negotiating new commitments, but that framing has faced some pushback.
So it’s all much more unpredictable than other recent gatherings. From a negotiating point of view, the stakes are perhaps lower – but from a political sentiment point of view, the stakes are higher.
GZERO: The Trump administration has left the Paris Agreement. Bill Gates is focusing on other things. That means two huge, longstanding pillars of support for climate policy are now gone. Who is going to drive this stuff now?
Those are real headwinds. But there are other data points that are less foreboding. Besides the US, no other country has departed the Paris Agreement. The costs of low-carbon energy continue to drop, driven in significant part by Chinese manufacturers. The private sector generally remains bullish on decarbonization technologies. And many philanthropies will still engage in climate work, even as they change their public framing around it or prioritize other issues. The area where politics may be most disruptive is in the question of financing: projects may be more difficult to finance and more reliant on government support.
GZERO: What’s a realistic expectation of what can be achieved at this COP? What are you most optimistic about and what are you most pessimistic about?
We will likely see more agreements between countries on carbon trading, as well as some new targets for financing and monitoring projects that help countries to adapt to climate change.
I’m more pessimistic on the ability of COP30 to find a political message that will respond effectively to this geopolitical environment. In many ways, a positive vision for COP30 is simply to maintain credibility for the multilateral process, and to create conditions for a COP31 next year that has more time to identify solutions tailored to this geopolitical environment.
GZERO: A lay reader, or a person who doesn’t follow climate policy closely, might look at the headlines about how countries keep failing to meet their obligations, and wonder “why keep having COP at all?” How would you answer that?
That’s a very understandable concern. What is sometimes lost by those headlines is the value of the COP process as a choreography mechanism to encourage countries to regularly deepen their long-term climate ambitions. Most countries have done this ahead of COP30 with new 2035 targets, even if those commitments are not as ambitious as many observers would like. Recalibrating expectations and finding a new political framework for the whole process will be a topic of discussion in Belém.
No matter what happens, you’ll be in Brazil! What’s one thing you’re excited to do there that has NOTHING to do with climate change?
I am looking forward to seeing Belém – my first time in the Amazon! I will be consuming lots of Brazilian espressos throughout the week.
Have a couple for us too – enjoy!
October 21, 2025: The owner of this cattle feedlot in Sergeant Bluff, Iowa, USA, used to fly a Trump/Vance flag. The Trump/Vance flag is no longer flying at the feedlot.
These days, US farmers aren’t just worried about the weather jeopardizing their harvests. They’re keeping a close eye on geopolitical storms as well.
The American agricultural industry exports roughly 20% of its production, making it heavily reliant on global trade. This year, China – the third biggest buyer of US agriculture – has drastically cut back orders in response to President Donald Trump’s tariffs. While China agreed to resume buying soybeans, a major import crop, after meeting with Trump at the ASEAN summit last week, it has not bought any US corn, wheat, sorghum, or soybeans so far this year. Accordingly, the USDA projects that American agricultural exports to China will fall 30% compared to last year, to $17 billion. That’s down more than 50% since 2022.
“There’s uncertainty in the markets,” Farm Bureau economist Dr. Faith Parum explains. “Farmers are making decisions now for next year, unsure of where the markets are for what they planted this year.”
Parum says she is “optimistic” about the trade deals Trump made with Southeast Asian countries at the ASEAN summit last week, as Malaysia, Cambodia, and Vietnam all opened up to more US exports. The region is now the fastest-growing export market for US agriculture, with over $12 billion in products shipped there last year.
But the US-China trade tensions come at a bad time for many farmers. Despite a record corn harvest this year, many US growers are losing more than $100 an acre, according to Parum, squeezed between falling crop prices, a result of losing their major buyer, and rising production costs. Parum says production costs, like fertilizer, transportation, and labor, have increased over the past few years. Fertilizer prices have not stabilized since Russia’s full scale invasion of Ukraine, and have risen since July because of China limiting exports. Meanwhile, immigration crackdowns have caused the price of farm labor to go up.
From 2020 to 2022, 61% of the hired farm workers were immigrants, and only 7% were US born – the rest were immigrants who had obtained US citizenship. As a result, according to Eurasia Group US policy expert Noah Daponte-Smith, “A lot of [workers] are losing their authorization to work or being deported outright. And that is creating labor market pressures in the food supply chain that are pushing prices up.”
“[Immigration] is one of these issues where administration policy counteracts other policies, namely: keeping food prices down,” Daponte-Smith added.
This tension can also be seen in the meat aisle. Beef prices are at record highs due to droughts which have shrunk herd sizes. Trump’s solution was to quadruple imports of Argentine beef. The deal gave Argentine President Javier Milei, an ideological ally of Trump’s, a lifeline ahead of midterm election but enraged US beef producers who were suddenly subjected to more foreign competition. The pushback was immediate, prompting Vice President JD Vance to hold a private meeting with lawmakers from leading agricultural states to hear out their grievances.
There’s a political component to this: America’s agriculture industry is disproportionately consolidated in Republican led-states like Iowa, Texas, and Nebraska, and farmers are an “ancestral” contingent of the GOP, says Daponte-Smith. Republicans have a 25-point advantage over the Democratic party in rural areas of the country, according to Pew Research Center.
“Trump’s between a rock and a hard place,” says Daponte-Smith. “The administration campaigned on an anti-inflation message, but his efforts to bring prices down anger a core Republican constituency.”
Yet farmers remain optimistic about the country’s direction, according to Purdue University, with 71% saying the US is “headed in the right direction.” However, confidence in tariffs has declined: only 51% now believe tariffs will strengthen the agricultural economy, down from 70% in spring. Meanwhile, 30% think tariffs will weaken it.
Politically, Trump appears to be moving quickly to neutralize the farm backlash, offering farmers a multibillion dollar financial support package drawn from tariff revenues.
“They don’t want this to be happening next August,” says Daponte-Smith. “That’s when it really could be an issue.”
The United States is #winning.
At least that’s how it looks if you’re tracking the economy, market indices, or the parade of countries lining up to cut deals with President Donald Trump. Asian and Gulf countries have pledged trillions of dollars in foreign direct investment in the US during the Trump presidency. The United Kingdom, the European Union, and several Southeast Asian nations have offered non-reciprocal trade deals. Canada folded on its plan to impose a digital services tax. Japan made unilateral concessions on automotive tariffs and Nippon Steel. European pharmaceutical companies are relocating production stateside to avoid punitive tariffs. Consumer confidence may be in the doldrums, but spending remains resilient (driven by the wealthiest Americans). Combined with an artificial intelligence spending boom and massive deficit spending – enabled by the dollar’s ongoing status as the global reserve currency – markets continue betting on American liquidity and growth.
It’s a heady moment. But while the short-term picture looks strong, the United States is systematically trading long-term strategic advantages for immediate tactical gains, with the accumulating costs hiding in plain sight.
Start with immigration. For decades, the cornerstone of America’s technological, economic, and soft-power dominance has been its ability to attract the best and brightest from around the world. Talented engineers, scientists, and entrepreneurs long chose the US because it promised opportunity, freedom, openness, and meritocracy – a fair shot at the American Dream. Now, the welcome mat is fraying. The Trump administration is increasingly hostile to immigrants (whether legal or illegal, skilled or unskilled), nativist sentiment among Americans is growing, and civil liberties (especially for non-white immigrants) feel increasingly uncertain. The numbers speak for themselves: International student arrivals to the US have declined by nearly 20% relative to last year. Meanwhile, China is rolling out new visas explicitly designed to poach high-skilled workers from the United States, and Canada is plastering airports with recruitment pitches. As America becomes a less attractive destination for top global talent relative to its competitors, the long-term economic damage will compound.
Then there are the universities. Yes, many humanities departments had grown intellectually insular and politically captured. Taking on these echo chambers for fringe woke ideology was long overdue. But the Trump administration has gone much further, slashing research infrastructure at America’s (and the world’s) finest universities. These institutions are what keep America at the cutting edge of advanced science and technology and draw the most talented students globally – the ones who become tomorrow’s leading researchers, inventors, and entrepreneurs. Undermining that ecosystem will erode one of the most important pillars of the US economy at a time when public trust in science itself is declining. Growing vaccine skepticism, embrace of conspiracy theories, reflexive rejection of expertise – these aren’t just cultural quirks, they’re a structural disadvantage when competing against countries where faith in science remains strong. They’re making Americans less capable of driving the next wave of technological advances, and therefore less likely to dominate the commanding heights of the world economy and geopolitics.
Consider artificial intelligence. The United States is racing ahead in consumer-facing AI – chatbots, engagement-maximizing social media algorithms, generative tools to produce yet-more-addictive slop, ever-larger language models that claim to be one step closer to superintelligence – because that’s where the money is. But these technologies are also fragmenting society, amplifying misinformation, and possibly contributing to a kind of collective psychosis. China, by contrast, has channeled AI development away from consumer applications in favor of defense and industrial uses, which carry less risk of social fragmentation and more strategic upside.
It’s a similar story when it comes to energy. The United States has become the world’s most powerful petrostate, producing more oil, gas, and coal than any other country. That’s not inherently a problem – fossil fuels will continue to power data centers, agriculture, and heavy industry for decades to come. But the US has effectively ceded leadership on post-carbon energy to China, which already dominates battery technology, solar power, next-generation nuclear, and supply chains for critical minerals. Washington is doubling down on hydrocarbons while letting the future of energy pass it by.
Or take trade policy. The Trump administration is imposing the highest US tariffs in a century – including on major allies, on countries with no bilateral trade imbalances, and on sectors where America lacks capacity to ramp up domestic production quickly enough to avoid shortages or inflation. Following Trump’s Oct. 30 meeting with Chinese President Xi Jinping – which put escalation on hold for a year and lowered fentanyl tariffs on China from 20% to 10% in exchange for politically-sensitive soybean purchases – the effective US tariff rate on Chinese imports now sits at 32%, close to the rate on ASEAN countries and lower than on its strategic partner India and South America’s largest economy, Brazil, which actually runs a trade surplus with the United States.
The cumulative result is a roughly 17% regressive tax on American businesses and consumers, which are forced to pay more for intermediate inputs and final goods. Paired with a sharp turn toward industrial policy and state capitalism, the US is moving away from the free-market principles that made its economy so competitive in the first place. Targeted government intervention in select sectors (e.g., semiconductors, banking) can sometimes be justified on specific grounds (e.g., national security, financial stability), but history shows that broad protectionism and state direction tend to make economies less, not more, dynamic over time.
This short-term thinking extends to geopolitics. As I wrote last week, most countries are prepared to give the US wins – some pyrrhic, some significant – to avoid open conflict. But these same countries are also working to ensure they’re never in that position again. The EU has finalized trade agreements with Mexico, Indonesia, and the South American trading bloc Mercosur. Brazil is deepening economic ties with Europe, China, and Canada. India is working to stabilize relations with China while accelerating infrastructure projects that reduce its dependence on US markets. Saudi Arabia has signed a nuclear deal with Pakistan to hedge against future security neglect from Washington.
These moves aren’t costless – they require years of political capital, billions in investment, and new institutional architecture. Once built, they’re hard to reverse. But countries have learned the hard way that US policy can change course every election cycle with little in the way of policy continuity or long-term strategic planning, and they’re building alternatives now while accommodating Washington in the short run. Every four years, there’s a 50/50 chance that everything – not just the winners and losers but the rules of the road – shifts. Gone are the days when politics ended at water’s edge. That structural volatility reduces American leverage over time, even as it delivers wins for the world’s largest economy.
So when asking whether the United States will retain its lead over its allies and adversaries, the answer depends on the time horizon. Short-term? Absolutely. America remains by far the world’s most powerful country, so there’s a lot of room for damage before structural decline sets in. Moreover, artificial intelligence is about to change everything, and the US is one of only two games in town (China being the other) and still the preferred partner for most of the West and parts of the Global South.
But long term, the trajectory is troubling. The historical advantages the United States enjoyed over its peers – better physical and institutional infrastructure, superior demographics driven partly by immigration, public tolerance for inequality undergirded by perception of meritocracy, greater capacity for deficit spending – are all heading in the wrong direction, arguably unsustainably so. China, despite being in a weaker overall position, is doing what it can to exploit these shifts. And while Beijing faces severe structural challenges of its own, it benefits from the increasingly accurate perception that it takes the long view while America chases the next election.
Perhaps most worrying is the one thing everyone in a deeply divided America now agrees on: that the country’s biggest threat is domestic. They just disagree on who that threat is. That kind of inward turn ensures the bulk of the national energy and focus will remain on fighting internecine political battles rather than making the deeper, patient investments – in people, institutions, research, and infrastructure – required to keep the United States competitive a generation from now.
America is giving up long-term leadership in exchange for short-term wins. The question isn’t whether the United States will pay for this addiction to immediate gratification. It's only when the bill will come due – and how much it will cost.