This is the first in a series of 4 posts looking at the Trump administration’s goals for its first year and to what degree they have been accomplished — all with an eye toward investment. It has long been anticipated that the midterm elections would be decisive in determining whether President Trump’s radical revision of American politics will last. Now is the beginning of the midterm campaign season, and this raises the question of whether we are approaching Peak Trump. The series will look at foreign affairs first, the domestic economy with regard to government second (IRS, SEC, Justice Department, etc.), the domestic political economy looking toward the midterm elections, and finally how the analysis advanced here might affect investment.
Donald Trump did not win his second term as president because of his foreign policy goals or record. His first term was not dominated by foreign affairs and was not seen as notable in those terms one way or the other. His confrontational first-term China policy was generally reckoned a success, at least as a strategic re-orientation, and mostly adopted by the Biden administration. There were other innovative policy initiatives, including the Abraham Accords in the Middle East and the Clean Network campaign for exclusion of Chinese telecommunications technology from international networks (also amplified in the Biden years). The renovation of NAFTA into USMC was not especially consequential, although it introduced a 6-year review, which comes due this year. Otherwise the first Trump administration’s foreign policy was mainly about trying to make major deals — with Kim Jong-un of North Korea, with Vladimir Putin, with Xi Jinping — and substituting economic nationalism for overseas commitments to allies and international institutions. The dealmaking was a failure, including when a deal was actually reached (with China). The turn from internationalism to nationalism, however, was a success in its own terms, and the US’s long march away from alliances and international institutions, beginning in the Clinton administration and continuing (with pauses, as in 2008) ever since, became ingrained practice. But Trump’s second presidential campaign did not run on any of this. The only major foreign-policy campaign promise was to resolve the Ukraine conflict within 24 hours of assuming office.
That, of course, did not happen, and the Ukraine war continues a year later, with Europe struggling to replace military aid stopped under Trump and with US-led diplomacy lacking in results. The most striking thing about Trump foreign policy early in the new administration, as discussed in a number of SIGnal posts, was the doubling down on economic nationalism (using tariff policy) and neo-isolationism (the end of USAID and other international commitments). These moves were radical in themselves; more radical still was the degree to which they took power away from the Republican-dominated Congress and the professional civil service. The lack of effective political opposition to the administration’s moves revealed the shallowness of the American political commitment to internationalism. It also revealed the extraordinary freedom of maneuver now available to the president in foreign affairs.
But President Trump did not have an alternative programmatic use for the powers he had succeeded in acquiring. He lacked a positive ideology. His goals were essentially negative, such as spending less money abroad. Beyond that, there was simply the demonstration of power: threatening to take the Panama Canal (December 2024), then Greenland (January 2025), then Gaza (February); confronting the president of Ukraine (February); harshly criticizing European domestic policies (February, via Vice President Vance); and attacking Iran (June).
At the same time, there was the assertion of a special ability to solve long-standing crises through mediation. This began with a diplomatic intervention in an India-Pakistan confrontation in May, which caused Pakistan to nominate Trump for the Nobel Peace Prize, followed by other instances of what he called ending, or in the Balkans preventing, conflict: Rwanda-Democratic Republic of Congo, Kosovo-Serbia and Israel-Iran (all in June), Thailand-Cambodia (July, and again in December), Egypt-Ethiopia (July), Armenia-Azerbaijan (August), and Gaza (September). None of these conflicts are actually solved. In December the State Department announced that the US Institute of Peace, an independent think tank funded by Congressional appropriation since its founding in the Reagan years, had been renamed the Donald J. Trump United States Institute of Peace to “reflect the greatest dealmaker in our nation’s history.”
What should one make of this seesaw pattern, with aggression from January to June, peacemaking from May to September? The Peace Prize went to María Corina Machado of Venezuela on October 10, 2025; the US’s first strike against a Venezuelan vessel was on September 2, followed by 20 more strikes to November 15. After a pause, the pace picked up in early December, and President Maduro was extracted from Caracas on January 3 after announcing he was interested in peace talks with the US. The US also bombed northern Nigeria at the end of December.
It is obviously tempting to think that the president wanted to show strength abroad from his inauguration to the early summer, but to take on the role of peacemaker in the summer and fall in the hope of being recognized outside his administration as the “greatest dealmaker” for peace. He had stated since 2018 that he thought he deserved the Nobel Peace Prize and reiterated this in February and June of 2025. When he did not receive it, his actions abroad became violent again. He appeared very pleased when Machado gave him her peace-prize medal. But with threats against Cuba, Mexico, Colombia, and again Greenland and Panama, the president seemed to swing back to the belligerence with which his presidency began, in the last two cases with the same targets. The US withdrew its support from some 20 international agencies — the result of a long-delayed State Department review ordered nearly a year ago — and froze the visa-approval process for citizens of more than a third of the countries of the world.
So the pattern of military actions and peacemaking in the administration’s first year does seem to have a pronounced personal component. The president’s weekend letter to Norwegian prime minister Støre confirms this. There is nothing else that links Nigeria, Armenia, Thailand, Iran, Greenland, and so forth. It is a mistake to impose more of a pattern than there is.
However, at some point in the summer or fall the reign of budget director Russell Vought, whose task it was to shrink the US government, seems to have given way to the reign of chief policy advisor Stephen Miller, whose ideas stretch beyond dismantling Diversity Equity and Inclusion (DEI) and Environmental, Social and Governance (ESG) projects and intimidating institutions (corporations, universities, law firms) who once pursued them. Miller has a worldview and a theory. It unites the militarization of anti-immigrant policies with foreign policy, including economic policy. The re-focus of US foreign policy on Latin American drug gangs had been a staple of DC gossip since early in the administration. Now it was clear. In Miller’s words:
Not long after World War II the West dissolved its empires and colonies and began sending colossal sums of taxpayer-funded aid to these former territories (despite have [sic] already made them far wealthier and more successful). The West opened its borders, a kind of reverse colonization, providing welfare and thus remittances, while extending to these newcomers and their families not only the full franchise but preferential legal and financial treatment over the native citizenry. The neoliberal experiment, at its core, has been a long self-punishment of the places and peoples that built the modern world.
There is something to dispute in almost every word in those sentences, but the point here is that the role of Miller and Vice President Vance appears to be to give some intellectual structure to what might otherwise — given the lack of effective political or public opposition to the concentration of decision-making power in the White House — be simply a personal foreign policy. The criticism of Europe, in the US National Security Strategy, for engaging in its own “civilizational erasure” by not having enough children, sapping the vitality of nations by imposing a European Union on them, and admitting immigrants is part of a larger idea about imperialism and the West. Europe is seen as a betrayer of the West, and the US under Trump as its lone defender. The global economy for perhaps a century is seen as having been an unfair deal for the US and the once-imperial Western powers. The emotional power of this view comes from the sense of internal Western betrayal and of being besieged by the undeserving poor wanting to take what is left of the once splendid West. The chief mode of response, in Miller’s words, must be “strength,” “force,” “power”: “These are the iron laws of the world.”
This is the emergent ideology of the Trump administration with regard to foreign affairs, with ample room allowed for the president’s personal reactions to people and events, such as not winning a famous prize. Trump has never demonstrated a historical sensibility, so it is difficult to know how much he himself believes in this ideology. Nonetheless, it has been foreshadowed for nearly a year and does seem to be the one his administration has. We will look at some of the implications for investors in the conclusion to this series.