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Fast Thinking January 20, 2025

What Trump’s inaugural address means for the world

By Atlantic Council

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“A tide of change is sweeping the country.” Beneath the 180-foot-high Capitol dome on Monday, US President Donald Trump was sworn in for a second term, promising in his inaugural address and with a slew of executive orders to enact a 180-degree turn away from many of his predecessor’s policies. Below, Atlantic Council experts offer their insights on what the new US president announced on his first day back—and what to expect next.

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An ‘intermestic’ inaugural

  • While Trump emphasized a theme of “peace through strength” on defense policy and even pledged a US mission to Mars, it was primarily “an ‘America first’ speech,” Matt notes, with Mexico, Panama, and China the only foreign countries briefly mentioned. 
  • But Trump “highlighted a series of intermestic issues—those of both domestic and international concern—including plans to follow through on campaign promises with near-term action to strengthen border security, pursue energy dominance, and levy new trade tariffs,” Matt adds.

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Border lines

  • The US southern border stood out as a focus. Trump is declaring an emergency at the border, authorizing the US military to help secure the border, labeling Mexican drug cartels as Foreign Terrorist Organizations, and ending the “catch and release” practice for migrants.
  • That will yield some immediate results: “Declaring a national emergency and designating cartels as terrorists gives Trump access to authorities and resources that the federal government would not have otherwise,” Tom explains. But don’t expect everything at once: Trump will need not just expanded authority but also “billions of dollars to make his border security plans succeed, and that will not be settled on day one.” 
  • Trump “also needs public support over several years,” Tom adds, pointing to polling showing strong backing for some policies but weaker support for other actions.

Close-up on the Canal

  • The Panama Canal was another focus for Trump, who criticized the US transfer of the critical trade waterway as a “foolish gift.” “We’re taking it back”, Trump said, in response to what he described as unfair treatment of US ships transiting the canal and the creeping presence of China in the area. Panamanian President José Raúl Mulino swiftly responded with an official communication reiterating Panama’s sovereignty over the canal. 
  • Jason notes that Trump’s concerns about the canal go back decades, and he sparred with Panama in his first term. But one option that Jason predicts the Panamanians would welcome is “to ramp up US investment in the canal and in the many direct and indirect businesses that support canal operations. The United States needs to really get in the game to win the game.”
  • “The new Panamanian government is more pro-US than its predecessors,” Jason says, and China’s growing influence there can be addressed. On a recent trip to Panama, Jason adds, “I saw and heard concerns of a disproportionate uptick in Chinese investment and a yearning for more US companies to invest in Panama.”

What wasn’t said

  • Watching with attendees at the World Economic Forum in Davos, Josh tells us that there was “a shared surprise (and perhaps relief) that the president’s favorite word—‘tariffs’—got such little attention in the speech.”
  • Why? Josh, who predicted a careful opening salvo, says that if Trump were to follow through on the large, immediate tariffs that he promised on the campaign trail, the stock market “would react badly” and “tit-for-tat retaliation” from target countries could increase inflation. Without his economic team in place, that was a risk Trump wasn’t willing to take, Josh surmises. 
  • One lesson of the first Trump administration is tariffs are a core policy conviction, but the president is sensitive to what the markets think,” Josh adds. “While the markets may have won out today, it’s more likely than not that the president returns to his favorite word in the very near future.”
  • Another word that did not make the address: “Ukraine.” But Rachel points to Trump’s criticism of “unlimited funding to the defense of foreign borders.” That could “spell trouble for Europe and Ukraine,” she tells us.
  • Trump’s incoming national security team has indicated support for stronger sanctions on Russia, seizing frozen Russian assets, and pushing for a negotiated peace in Ukraine. But Trump has also signaled a desire to reduce the US commitment to Europe’s defense. Rachel notes that Trump will expect the Europeans to lead on any potential negotiation for a ceasefire in the war, including “holding a ceasefire line and providing long-term security guarantees for Ukraine.”

Further reading

Related Experts: Matthew Kroenig, Thomas S. Warrick, Josh Lipsky, Jason Marczak, and Rachel Rizzo

Image: US President Donald Trump speaks during inauguration ceremonies in the Rotunda of the US Capitol on January 20, 2025 in Washington, DC. Photo by Chip Somodevilla-Pool via Imagn Images and Reuters