[On December 31, 2024, we predicted seven developments for 2025 and boldly went where only fools, angels and astrologers dare to go. So, what can we expect in 2025? To borrow words from the military, a more volatile, uncertain, complex and ambiguous (VUCA) world. This is Part 1 of a seven-part series.]

US President Donald Trump won the election by promising more secure borders and higher tariffs. Now that he is in office, he will clamp down on immigration. Trump and his team believe in protectionism and isolationism. The underlying idea is to bring back manufacturing jobs to the US. So, expect higher tariffs. Lower immigration is likely to lead to economic harm. Tighter labor markets, higher costs for businesses and increased inflation are likely to follow.

Republican divide on immigration

As an issue, immigration has created a divide within Trump’s camp. The trigger was his selection of Sriram Krishnan as senior adviser for AI in his administration. Krishnan is a Tamil Brahmin (Tam Brahm) who was born in India. He did his undergrad at SRM Institute of Science and Technology (SRMIST) and is a general partner of American venture capital firm Andreessen Horowitz. This high-achieving Tam Brahm heads the firm’s London office and is pals with both former British Prime Minister Boris Johnson and Tesla and X CEO Elon Musk.

Krishnan’s appointment led to a backlash from the Make America Great Again (MAGA) base. Laura Loomer, a MAGA political activist and Internet personality, took issue with it. Vivek Ramaswamy and Musk, the two co-chairs of the newly proposed Department of Government Efficiency (DOGE) rode out to Krishnan’s defense. So did former PayPal executive David Sacks, whom Trump has tapped to be White House AI and cryptocurrency tsar. The war of words played out on X, the new bastion of free speech.

The MAGA crowd argues that the tech industry imports Indian workers because they are cheap. These Indians put downward pressure on American wages. Trump’s finance and tech bros, on the other hand, argue that there are not enough Americans to do tech jobs and thus the tech industry needs to bring in foreign workers. This controversy will continue to divide Trump’s camp in the months ahead.

The US will isolate itself

Trump’s tariffs will accelerate the creation of two contending economic systems. Such a situation existed during the Cold War, but since the collapse of the Soviet Union, the global economy has become more integrated than ever. However, the American and Chinese economies have now grown increasingly separate from each other. This trend will accelerate.

Importantly, US global leadership will weaken. Trump will pursue unilateralist, isolationist and contentious policies. So, we will see increased fraying of international norms and weakening of US alliances in Europe, the Middle East and Asia.

[Anton Schauble and Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.