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US Election
National Security Advisor Mike Waltz and Rep. Elise Stefanik (R-NY), the then-nominee for US ambassador to the UN, during a Cabinet meeting at the White House in Washington, DC, on Wednesday, Feb. 26, 2025.
Rep. Elise Stefanik’s (R-NY) hopes of moving to the Big Apple have been dashed after US President Donald Trump asked her to withdraw her candidacy for ambassador to the United Nations.
“As we advance our America First Agenda, it is essential that we maintain EVERY Republican Seat in Congress,” Trump wrote on Truth Social Thursday, admitting the political nature of his decision. When asked about her withdrawal, Stefanik told Fox News, “I have been proud to be a team player.”
Margin call: With four vacancies in the House, Republicans only have a 218-213 majority in the lower chamber, meaning they can only afford to lose three votes anytime they want to pass legislation. Trump fears that, if Stefanik moved to the UN, Republicans could lose the special election to fill her seat.
Bad signal: It’s not Stefanik’s seat that Trump is worried about right now, but rather Florida’s 6th Congressional District, formerly represented by none other than National Security Adviser and Signal-chat-scandal creatorMichael Waltz. There’s a special election there on Tuesday, and the president’s team is concerned that the well-funded Democratic candidate, Josh Weil, could defeat the underfunded Republican candidate, Randy Fine, even though Trump won the Daytona Beach district by 30 percentage points in the 2024 presidential election.
Eye on the poll: An internal Republican poll from March has Weil leading Fine 44% to 41%, according to a source familiar with the race, with 10% undecided. The poll was conducted by Fabrizio Ward, the same firm that worked for Trump’s campaign, and isn’t yet public. The February iteration of this poll found Weil trailing Fine by 12 points.
Trump in front of a downward trending graph and economic indicators.
For someone who campaigned on lowering grocery prices on day one and rode widespread economic discontent to the White House, Donald Trump sure seems bent on pursuing policies that will increase that discontent.
If you don’t believe me, take it from the president himself, who refused to rule out a recession last Sunday and acknowledged that his sweeping tariff plans would cause “a little disturbance.” But, he added, “we are okay with that.”
Are we okay with that, though?
From Trump pump to Trump dump
Trump’s election victory unleashed “animal spirits” as many business leaders and investors hoped he’d follow through on his campaign promises to cut red tape and lower taxes while ignoring the more disruptive planks of his economic platform: tariff hikes and immigration restrictions. Surely much of it was posturing and bluffing, they thought, and Trump’s more extreme impulses would be checked by market-friendly advisers like Treasury Secretary Scott Bessent. In the worst-case scenario, they assumed Trump would course correct when confronted with sliding stock prices or signs of economic cracks.
Slowly but surely, they are starting to realize they got it wrong. Trump meant what he said and is less bound by constraints than during his first term. (I hate to say I told you so, but it wouldn’t have taken them so long to figure this out if they subscribed to this newsletter.)
The S&P500 has dropped by 8% over the last month (so far) as the president’s promised “golden age” of growth collided with the chaotic reality of Trumponomics. American equities are not only lower than they were before Trump’s inauguration but have erased all gains since he became the odds-on favorite to win the race in October. This represents the worst stock market performance in a president’s first 50 days since Barack Obama took office in the midst of the global financial crisis.
But it’s not just Wall Street that’s souring on Trump’s plans. Consumers, small businesses, and CEOs alike are all reporting sharp declines in confidence, largely due to record uncertainty about tariffs. Manufacturing activity is slowing, retail sales and construction spending are falling, and businesses of all kinds are paring back their investment plans as threats to the US outlook mount.
Inflation expectations are on the rise, with 60% of Americans believing Trump isn’t doing enough to bring down inflation and 68% fearing that his tariffs will lead to higher prices. Most Americans think the economy is on the wrong track and disapprove of the president’s handling of it. No wonder Trump’s net approval has taken a quick hit, his honeymoon ending faster than any other president’s save one: Trump 1.0.
It's the economic uncertainty, stupid
Businesses and investors have reason to worry.
In his first six weeks in office, Trump has made it clear that he is dead serious about building a “tariff wall” around America, not as a negotiating tool but to reshape global trade flows. The US effective tariff rate is set to rise to its highest level since the 1940s by the end of the year, raising prices for American consumers and businesses and slowing down growth. Trump has virtually closed the southern border and ramped up the pace of deportations, which will constrain the labor supply and lead to higher prices and lower growth. He has threatened to eliminate government subsidies, contracts, and grants that businesses, universities, and other organizations rely on. And he has empowered Elon Musk’s chaotic effort to purge, downsize, and capture the administrative state, threatening the delivery of critical public services, amplifying these macroeconomic shocks, and destroying US state capacity.
And yet, these first-order consequences of Trump’s policies are not the core reason why traders and boardrooms are freaking out about the outlook for the US economy. Don’t get me wrong, businesses prefer good policies to bad policies. But they can adapt to bad policies. You know what they can’t adapt to? Policies that can turn on a dime based on the president’s whims.
Maybe you agree with Trump that “trade wars are good and easy to win,” or perhaps you believe his policies will cause short-term pain but be worth it in the long run. But whatever you may think of the merits of his agenda, there’s no denying that the constant uncertainty he brings to the table is terrible for business.
Every business decision is a bet about the future. The one non-negotiable before making any investment is a bare minimum of predictability. When the rules of the game can change any day (and when they’re no longer applied impartially), the rational choice is to put off costly long-term investment plans – even if the possible payoffs are high.
That’s why the extreme policy arbitrariness, volatility, and uncertainty that characterizes Trump 2.0 – best exemplified by his on-again, off-again, on-again tariffs – is the ultimate economic dampener. Even if Trump walks back some tariffs or implements his pro-growth promises, uncertainty – by some metrics already higher than it was during the pandemic, the 2008 financial crisis, and 9/11 – will remain near all-time highs for the foreseeable future, discouraging investment, hiring, and consumption, and raising prices. Its chilling effect will compound the direct impact of the administration’s implemented tariffs, deportations, federal layoffs, and so on. As I warned in Eurasia Group’s Top Risks report, “in the long run this will risk undermining the predictability and performance of the world’s most dynamic economy, preeminent investment destination, and issuer of the global reserve currency.”
No more Trump put?
Trump seems to have no intention of backing off his plans or moderating his “move fast and break things” approach, even in the face of economic dislocation. “Markets are going to go up and they’re going to go down, but, you know what, we have to rebuild our country,” he said at the White House yesterday.
This contrasts sharply with his first term, when Trump considered the stock market a barometer of success. Back then, investors and business leaders knew they could count on the “Trump put” – the president’s tendency to curtail his most economically harmful policies when faced with financial turmoil. Now, Trump is openly saying he doesn’t care that investors believe his agenda could cause a recession and raise prices – because it might, and he’s convinced the sacrifice will be worth it for the greater good. “Will there be some pain?” he asked in February. “Maybe (and maybe not!) But we will make America great again, and it will all be worth the price that must be paid.”
So the Trump put either doesn’t exist anymore, or the threshold is significantly higher than it used to be. This makes sense when you consider the president doesn’t have to (read: can’t) run for reelection again. After being twice impeached, convicted, nearly assassinated, and taken for dead politically, the 78-year-old Trump is in a rush to cement his legacy before his “enemies” get another chance to take him down.
True, most presidents – even lame ducks – would consider avoiding a crippling economic meltdown, scoring a decent result in the midterms, and handing the reins to a same-party successor essential to a good legacy. But Trump is no ordinary president. He does not, for example, care much about the Republican Party (after all, he hasn't been a member for long). What he does care about is his own image. In that sense, he is still constrained by public opinion – or rather, his perception of it.
The key question is whether there’s anyone around him who can speak truth to power to a man who has famously little patience for being told he’s wrong. As I wrote in Eurasia Group’s Top Risks report:
Not only does the president-elect have unified government and consolidated control of the Republican Party, but he is building a more personally loyal and ideologically aligned administration than last time. His team will come into office ready to implement – rather than thwart – Trump’s agenda.
If his first 50 days are any indication, the US economy may be in for a lot more trouble until reality pierces his bubble … if it ever does. The beatings will continue until morale improves.
President Donald Trump looks on while meeting with President of France Emmanuel Macron in the Oval Office at the White House in Washington, DC on Monday, February 24, 2025.
The 22nd Amendment to the US Constitution is crystal clear: No person can be elected to the presidency more than twice. Ratified in 1951, it was a response to Franklin D. Roosevelt’s four-term tenure. Before FDR, the two-term limit was an unwritten rule respected as a tradition since George Washington.
The amendment doesn’t leave room for loopholes. It even prohibits a vice president who finishes out more than two years of a president’s term from being elected a third time. Grover Cleveland, the only other president besides Trump to serve two non-consecutive terms, was also barred from a third reelection.
So, could Donald Trump run for a third term? Legally, and probably, no. Not under the current rules. But we live in interesting times, and Trump and his advisers have repeatedly hinted that he could stick around for a three-peat – most recently last Thursday at a Black History Month celebration and later that same day at the Conservative Political Active Conference.
The (extremely unlikely) paths to a third term:
Repeal the 22nd Amendment. This would require two-thirds of Congress to approve removing an amendment and three-fourths of US states to ratify it. Translation: It’s politically impossible. There’s zero chance enough lawmakers — or states — would sign off on such a move. But a Republican lawmaker has still introduced a House resolution to amend the Constitution to allow President Donald Trump and future presidents to seek a third term.
Martial Law. While leaders in other countries have suspended elections during periods of martial law, in the US, the Constitution and the 22nd Amendment would remain in effect. There is nothing written in the Constitution that allows for it to be suspended during periods of national emergency. That said, when times are crazy, crazy things can happen that could weaken public and institutional pushback to a president expanding his powers during times of chaos.
Vice president loophole? Could Trump run as vice president, then ascend to the presidency if his running mate resigns? Legal scholars have debated this, but the consensus is no — since the 12th Amendment bars anyone ineligible for the presidency to serve as VP.
Ignore the law. The most extreme scenario: Trump – or any leader – could simply refuse to leave office and dare the system to stop him. Then it would come down to Congress, the courts, and the public to force him out. We saw Trump flirt with this idea after the 2020 election, which culminated in the Jan. 6 insurrection in 2021. But that’s the stuff of banana republics, not stable democracies.
Bottom line. The 22nd Amendment exists for a reason: to prevent the kind of power grabs that have destabilized other countries and destroyed democracies. As of now, it doesn’t appear that a third Trump term could happen — at least, not without a massive, unprecedented, shift in US law and politics. But things are rapidly evolving in US politics, so we will be keeping our eyes on how things develop.
What is the European reaction to what President Trump is trying to achieve in terms of peace?
Well, confusion. A lot of people, and there are quite a number of European leaders here, today, don't really understand what President Trump is up to. He wants peace, that's fine. But peace can be, well, that could be the complete capitulation of Ukraine, that is the Putin definition of peace. Or it can be the victory of Ukraine, that's another definition of peace. So exactly how President Trump intends to pursue this? And without Europe, obviously, neither Putin nor Trump wants Europe around the table.
But how do you do it without Ukraine on the table? Because a lot of the things that are going to be necessary to agree with are things that have to be agreed with Ukraine, with President Zelensky. So a lot of question marks. The desire for peace is clearly here, no question about that. This war has to come to end. But the peace has to be just, it has to be stable. It has to be something that is not just a pause for Russia to recalibrate and restart the war.
So a lot of things to discuss between the European leaders and between the European leaders and President Zelensky, is happening in Kyiv here today. But also eventually, across the Atlantic, President Macron is in Washington today, Prime Minister Starmer is heading into Washington on Thursday.
U.S. President Donald Trump speaks at Mar-a-Lago in Palm Beach, Florida, U.S., February 18, 2025.
The Trump administration is moving to expand presidential authority over key independent regulatory agencies that were set up to be guarded from the executive’s influence.
On Tuesday, Donald Trump issued an order titled “Ensuring Accountability for All Agencies,” requiring independent agencies to submit any proposed regulations to the White House to ensure they align with the president’s priorities.
What does the order say? It gives the Office of Management and Budget – which has been working in lockstep with Elon Musk’s Department of Government Efficiency – the authority to make funding decisions and to “establish performance standards” for employees. It also instructs the agencies to create a leadership position for a “White House Liaison.”
The order applies to 19 agencies, and notably affects:
- The Securities and Exchange Commission, which oversees markets.
- The Federal Trade Commission, which enforces antitrust laws and protects consumers from deceptive business practices.
- The Federal Communications Commission, which regulates the media, internet, and all other forms of communication.
- The Federal Election Commission, which oversees elections and political campaigns.
- The Federal Reserve. While the order does not apply to the monetary policy decisions of the Federal Reserve, it does bring its regulation of financial institutions under the purview of the president.
Pros: Proponents of the executive order argue that putting the commander in chief in charge makes agencies more democratically accountable because voters can hold the president responsible for their decisions at the ballot box. Trump is also keen to control the regulatory state, which he believes hindered his first time in office.
Cons: These agencies were established by Congress to operate independently from the White House for a reason. They protect democratic principles like freedom of the press, preventing their potential weaponization through selective auditing or manipulation of election and campaign finance laws, and shielding markets and financial institutions from short-term, politically motivated regulations that could cause long-term harm.
The courts just caught another case. Since these agencies were established by Congress to be independent of the president, the order will inevitably trigger legal challenges, likely to reach the Supreme Court since they concern questions of checks and balances and executive authority. Once there, Trump will test the long-fringe unitary executive legal theory, which argues that the president has the sole authority over the executive branch.Finnish President Alexander Stubb smiles during an event with a blurred "World Economic Forum" background. The text art reads: "GZERO World with Ian Bremmer—the podcast."
Listen: On the GZERO World Podcast, Finnish President Alexander Stubb joins Ian Bremmer in Davos, Switzerland, where world leaders, business executives, and diplomats gathered for the annual World Economic Forum. Just days after President Trump was sworn in for a second term, the mood in Davos was that of cold pragmatism. As Trump made clear in his speech to the Forum, Europe can no longer rely on the kind of copacetic relationship with the United States it had enjoyed since World War II or even during his first term.
So, what does that mean for Europe—and the war in Ukraine? Finland’s President Alexander Stubb and Ian Bremmer discuss.
Subscribe to the GZERO World Podcast on Apple Podcasts, Spotify, Stitcher, or your preferred podcast platform, to receive new episodes as soon as they're published.
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Carl Bildt, former prime minister of Sweden and co-chair of the European Council on Foreign Relations, shares his perspective on European politics from Davos, Switzerland.
What’s been going on here?
It’s been Trump, Trump, Trump, Trump. It’s been very much dominated by assessments, curiosity, concern about the transition in the US. A lot of businessmen are fairly, sort of, upbeat. They think there’s sort of a deregulation and lower taxes, that’s good. Economists are more worried. Debts and deficits, that’s not good. And those dealing with geopolitics, like myself, are deeply concerned.
Is he going to go to war with Denmark over Greenland? What’s going to happen with the Panama Canal? Is their Middle East policy that is credible? And what is he really up to when it comes to dealing with Mr. Putin on Ukraine? There are lots of questions, lots of concerns. But, upbeat assessment, in spite of that.