Navigating Disruption

Introduction

The second Trump administration features policies that bring both challenges and opportunities for traditional U.S. allies and partners. Some of these ring familiar from President Trump’s first term, but others are entirely new and paradigm-shifting in their impact. This compendium features eight analyses of how America’s allies and partners around the world are responding to, and coping with, U.S. policies. For each case, the authors define which U.S. policy shifts are most significant for the ally, as well as the range of actions being undertaken to manage relations and preserve interests.

Paradigmatic shifts in U.S. foreign policy take place in the context of disruptive changes in the global order. Conflicts in Ukraine and Gaza, U.S.-China great power competition, increasing cohesion among autocratic actors, and the weaponization of trade and finance by the two largest economic actors in the international system amplify the challenges faced by allies and partners. “America First” policies generally challenge the notion that allies and partners are assets for the United States; they are seen instead as sapping U.S. power. This effectively puts the custodial burden of the alliance’s welfare in the hands of the ally. Allies and partners must navigate the balance between highly transactional policies like those emanating from Washington and policies that sustain and prevent damage to long-term alliance equities with the United States.

When examining how U.S. allies and partners have coped with the policy changes wrought by Washington, one could infer some common traits. While allies initially wish to resist U.S. demands, promising not to “bend the knee,” many seek to make deals with Washington in the end. The reasons vary for each case, but a common motivation relates to internalizing the responsibility for identifying solutions that preserve long-term alliance equities. In many cases, allies can ill afford disruptive relations with their primary security and economic partner in times of acute uncertainty. In this sense, the Trump administration is wielding U.S. power, but its employment of transactional means could invite unpredictable consequences for alliance ties and U.S. interests.

Using the cases in this compendium, the authors infer a range of tactical and strategic actions in response to U.S. “America First” policies:

• Seek a face-to-face meeting. Allies all seek leader-to-leader meetings—not as a last resort but as the first step—given that the decisionmaking apparatus in the Trump administration features many loyalists around the president with little input from traditional foreign policy professionals.

• Minimize risk. Allies seek to minimize abandonment and entrapment fears and any damage to alliance equities from Trump’s policies to the best of their ability because they must bear the custodial burden of the alliance.

• Flatter the leader. Allies avoid disagreements with the U.S. leader (particularly in front of the camera), focusing instead on superficial flattery. They all seek to avoid a “Zelensky moment.”

• Prepare headline summitry deliverables. Allies come prepared with a large and flashy package of incentives that Trump can trumpet as wins, putting aside their policy instincts and focusing on the show. However, allies operate with the tacit understanding that the commitments may not all need to be fulfilled.

• Maximize reward. Given the flux created by U.S. policies, allies identify and capitalize on opportunities to find new areas of cooperation that align with their interests (while giving Trump the credit), thus creating positive-sum solutions.

• Identify contingency plans. Allies identify alternative trading or security partners as insurance in case of alliance failure and also as a form of leverage over Washington. But concrete efforts to formalize and invest in new relationships that might yield joint strategies for engaging Washington have yet to emerge.

• Practice self-help. In most cases, particularly outside of the European Union, allies and partners have responded to U.S. demands not by banding together to compare notes and exercise leverage in response to Washington, but individually and bilaterally, seeking expedient deals that address the immediate problem, such as reducing U.S. tariffs. They practice self-help rather than long-term mutually beneficial approaches vis-á-vis other similarly affected U.S. partners.

Allied reactions to the paradigm shift in U.S. policies are not uniform, but these responses provide a good metric. Some allies may adopt policies at the less cooperative end of the spectrum, while others might do more for the sake of preserving alliance equities.

The compendium chapters explore the responses of Africa; Australia, New Zealand, and the Pacific; Europe; Japan; Latin America and the Caribbean; the Middle East; South Korea; and Southeast Asia. Each author concludes their analyses with an outlook for the future and recommendations for policy.

Trump’s Africa Policy

Commerce and Domestic Politics Clash

Oge Onubogu

Introduction

The Trump administration has adopted a foreign policy approach of prioritizing economic and security relations with countries where interests converge. This strategy may be initially popular with some foreign leaders who think their countries could gain more from trade than they did from aid, but it is already clashing with the administration’s credo of “America First.” This tension is most visible in U.S-Africa relations.

The Trump administration’s early push for a commercial diplomacy strategy for Africa that prioritizes trade over aid was welcomed by many African leaders. These leaders have long called for the United States to recognize the African continent as a commercial partner, and not only as an aid recipient. The United States, of course, has a long history of commercial diplomacy in Africa. The Trump administration is trying to distinguish its approach, especially for its domestic constituencies, by emphasizing trade benefits, private sector investments, and bankable partnerships for U.S. businesses, while also seeking to persuade African leaders of the potential for economic growth. Recently retired Ambassador Troy Fitrell, the State Department’s senior bureau official for Africa who helped craft the administration’s policy, told an audience in Abidjan, Côte d’Ivoire, in May 2025 that the administration’s strategy would be implemented in close partnership with U.S companies, African governments, and other stakeholders to create conditions for economic growth on the continent.

Africa’s growing strategic and geopolitical relevance—given the potential of its burgeoning population and its store of the critical minerals needed to serve the globe’s high-tech needs—offers clear areas where U.S interests converge with opportunities, and a commercial diplomacy strategy could help achieve alignment. But foreign policy does not operate in a vacuum: All foreign policy is inherently domestic, and under this administration, domestic priorities such as supporting U.S. businesses strongly influence the foreign policy agenda. This creates challenges in the conception and execution of a commercial diplomacy strategy for Africa. Perhaps two areas where this tension is most visible are trade protectionism and immigration reform.

How Have Trump’s Policies Impacted Africa? How Is Africa Responding?

Trade Protectionism

The Trump administration’s April 2, 2025, “Liberation Day” Executive Order 14257, which proposed significant tariffs aimed at addressing trade deficits and promoting U.S. economic independence, undermines the administration’s own trade-over-aid agenda in Africa. The order (since modified more than once) initially imposed baseline 10 percent tariffs on 29 African countries and placed higher tariffs on 20 more African countries, reaching up to 50 percent for Lesotho—the second-highest rate after China. Lesotho, one of Africa’s smallest economies and greatly reliant on textile exports to the United States, declared a state of disaster in its textile industry before Trump announced a 90-day pause. Following the administration’s modification of reciprocal tariff rates on July 31, Lesotho’s new duty on imports decreased to 15 percent, which has provided some relief. But about 12,000 textile jobs in Lesotho hang in the balance. The country is now courting buyers from other markets for its goods.

Trump also has imposed a 30 percent tariff on select South African goods and has threatened a 10 percent increase in tariffs for nations aligned with the BRICS bloc of major emerging economies. These sets of tariffs impact two of Africa’s largest economies, Nigeria and South Africa, along with many smaller countries. The 30 percent tariff on South Africa is expected to significantly impact the country’s job market, especially in the automotive parts industry, which relies heavily on duty-free exports to the United States. Nigeria’s tariff rate, now at 15 percent, may rise by an additional 10 percent given it recently joined BRICS in January 2025 as a partner country, just before Trump took office with a view of BRICS’ policies as “anti-American.”

Although the Trump administration ultimately modified some of its tariffs on Africa, the levies have caused uncertainty and panic for many African countries that rely heavily on trade with the United States. The tariffs have shaken African economies and raised significant doubts about the intent of the United States’ commercial diplomacy strategy, with some questioning whether it is only about securing minerals from the continent and not a mutually beneficial partnership.

The Trump administration has demonstrated a preference for a transactional foreign policy approach on the continent; for example, earlier this year, the Democratic Republic of the Congo (DRC) offered exclusive mineral rights for U.S. companies in exchange for U.S. security assistance against the M23 rebel group, a paramilitary force backed by neighboring Rwanda. The request influenced a subsequent peace deal between the DRC and Rwanda, brokered by the United States, that apparently would grant rights to certain critical minerals to foreign investors, including from the United States. The declaration of principles for peace that was signed in June 2025 by the foreign ministers of the DRC and Rwanda purportedly is intended to provide economic incentives for all parties involved through what State Department Senior Advisor on Africa Massad Boulos described as a “regional economic integration framework.”

The quest to secure critical minerals appears to be a key focus of this administration, playing a significant role in Trump’s early overtures to Ukraine as well. And while the U.S.-facilitated peace agreement for the DRC and Rwanda is seen as a step in the right direction, the verdict is still out on whether this process can restore peace in the region. Notably, the presidents of the warring countries were absent from the June signing, which included an Oval Office appearance with the two foreign ministers; a key rebel group was not involved in those talks; and significant hurdles to implementation remain. Without an enabling environment of stability and security, it would be difficult for U.S businesses to operate in the region.

The tariffs also placed a question mark over the future of the African Growth and Opportunity Act (AGOA) trade deal, which has given African countries tariff-free access to U.S. markets for 25 years. AGOA expired in September 2025, and at the time of this writing, there is no clear indication of whether and how it will be renewed, a step that would have to be taken by Congress. Many in the Trump administration have noted its significance, and Trump himself, when asked about AGOA during the July 2025 summit he conducted with five African presidents—from Gabon, Guinea-Bissau, Liberia, Mauritania, and Senegal—said that he would “look at” extending the trade pact. But many African leaders doubt the prospects of AGOA’s renewal, given its no-tariff regime for some goods.

Meanwhile, China is already Africa’s biggest trading partner, giving nearly the entire continent tariff-free access to its markets: In June 2025, China removed tariffs for 53 African countries. That will help expand the already notable gap between Chinese and U.S. trade figures with Africa—Africa’s trade in goods with China rose 6.1 percent in 2024 to $295 billion compared with $72 billion of goods traded with the United States.

In response to this uncertain environment and to counter Trump’s tariffs, African countries are doubling down on efforts to leverage their flagship free trade initiative, the African Continental Free Trade Area. That initiative, which began trading in 2021 to bring the continent’s 1.4 billion people in more than 50 countries into a single market, has been slow in implementation. While 49 countries have ratified the agreement, fewer than half are actively trading under its umbrella—though the initiative has still seen some progress. In the meantime, African nations are expanding trade ties with China, the European Union, and Persian Gulf states.

Immigration Reform

The Trump administration’s immigration policies also undermine its commercial diplomacy strategy and economic partnership narrative with Africa. Washington has imposed sweeping visa and travel restrictions under the premise that tightening them protects U.S. national security. But these moves significantly harm many African countries by, among other impacts, hindering the travel required for trade and investment, distracting African leaders who must deal with the sociopolitical effects, and poisoning the atmosphere between U.S. and African leaders.

Distracting from economic issues, the administration’s July summit with the five African leaders included a push to have African countries accept third-country nationals deported from the United States, hardly creating the atmosphere of mutual respect needed to develop strong economic relations. Furthermore, the United States has imposed complete or partial visa bans on at least 19 countries, 10 of which are in Africa. All this comes on top of Trump’s divisive new policy of admitting white Afrikaner South Africans who claim persecution because of discrimination and violence as refugees.

Multiple African officials have condemned the punitive Trump administration measures as unacceptable and counterproductive. Nigeria, for example, said that while it is eager to strengthen trade ties with the United States, the travel restrictions are a major hinderance. Nigerian Foreign Minister Yusuf Tuggar publicly rejected the Trump administration’s pressure for the country to accept third-nation asylum seekers, saying the country has “enough problems of our own” and will not cave to U.S. coercion to take in deportees with no ties to Nigeria.

The Trump administration’s new immigration policies also severely restrict student visas, with many African youth heavily impacted; even those already studying in the United States are being cautioned against leaving because they may not be able to return. This is another case of the Trump administration shooting its foreign trade and investment policy in the wallet, so to speak, as Africa’s youth boom is becoming a major economic force globally. The World Economic Forum has reported that “by 2035, there will be more young Africans entering the workforce each year than in the rest of the world combined.” And China already has a significant numbers advantage over the United States in attracting the best and brightest of them to its education system.

Recommendations for the United States

The United States must rightfully prioritize its domestic national interests. But foreign policy interests are inextricably intertwined with domestic priorities in today’s globally interdependent world, even for the economically powerful United States. It would be shortsighted, to say the least, to hamper potentially beneficial and even lucrative economic ties abroad with counterproductive measures that might undermine the goals of trade and economic growth. The Trump administration risks falling further into that trap by failing to balance these interests in a way that helps, not hurts, Americans—not to mention, in this case, Africans as well. The administration’s much-touted commercial diplomacy is at stake.

As Africa’s geopolitical importance grows, the United States must clearly identify why it wants to—and why it must—engage with African countries, and it cannot just be to displace China with more of the same. That would be of little interest to African leaders or Africa’s citizens. Why shift from one usurious “partner” to another?

Instead, the Trump administration would find more economic success by understanding fully how it can distinguish itself in the eyes of potential partners. As noted, China already surpasses the United States in trade with African countries and is also increasing its investment in the soft-power approaches that the United States has been using for years, such as in education. And now the Trump administration is eviscerating many of the soft-power tools that gave the country a competitive edge in Africa, not only by restricting immigration and educational exchange but also by dismantling major institutions such as the U.S. Agency for International Development (USAID), the source of extensive U.S.-Africa economic ties. Among other initiatives, the gutting of USAID took down the 2013 Power Africa project, which aimed to help the continent get up to par on energy production—crucial to any economic development. Another program that fell to the axe was Prosper Africa, a promising initiative created under the first Trump administration that facilitated the creation of the government-backed but private U.S.-Africa Trade Desk to further enhance trade cooperation. The Trump administration has also suspended the U.S. Trade and Development Agency, which once helped reduce risks in early-stage investments and could have been instrumental in ensuring a successful commercial diplomacy strategy. And while the administration retained its Africa bureau in a recent reorganization of the State Department, it has considered significantly scaling back embassy representation on the continent.

Some of the best-performing government agencies like the Millennium Challenge Corporation (MCC) are now under severe budget-cutting pressure. Despite this, the MCC seems to be rebounding with the recent announcement of a $300 million electrification grant for Cote D’Ivoire. Investments like this by the MCC are crucial to deliver the infrastructure needed for successful trade and investment and ensuring that its high-profile senior-level delegations to the continent are not simply symbolic. The administration has signaled that it plans to rely much more on financial institutions such as the U.S. International Development Finance Corporation—also facing reauthorization this year—which provides financing and other assistance for development projects, and the U.S. Export-Import (EXIM) Bank, which provides credit to support U.S. trade. The EXIM Bank, for example, announced in August a $66 million guarantee for a small Washington, D.C.–based exporter of equipment for a new national data center in Côte d’Ivoire. But even then, the announcement makes clear that a key motivator is that the offer “displaces competition” from China. The project could nevertheless be promising, if it is accompanied by the right personnel on the ground—after all, people equal policy.

Similarly, the administration still has a chance to correct or offset its travel restrictions and tariff decisions and its extensive cuts to foreign assistance and diplomacy in ways that support the president’s agenda of commercial diplomacy with Africa, rather than weakening U.S. influence around the globe. The reorganization of the State Department, which Secretary of State Marco Rubio announced in May 2025, should be aimed at ensuring that qualified personnel with experience on the continent are in decisionmaking positions for any offices or programs related to Africa. The department needs advanced skills and experience to successfully navigate complex relationships, not only with overseas partners but also with other U.S. government agencies that could be helpful if the president is really serious about an agenda that prioritizes trade over aid. Any budget deliberations with Congress for FY 2026 should ensure sufficient funding to keep embassies staffed and running and for the State Department to advance these priorities. Renewing AGOA should be another priority—it is not a perfect tool, but it offers the possibility to innovate and create more jobs and opportunities for both the United States and Africa.

In pursuing their commercial diplomacy, Trump and his cabinet should ask—and answer—a question honestly: What makes the United States different from China? The perceptions of citizens everywhere are shaped by their lived experiences, and Africans’ perceptions of China remain relatively positive despite some recent decreases in Chinese funding to the continent. The most recent Afrobarometer survey of 30 African countries finds that 60 percent of Africans hold a positive view of China’s economic and political influence, compared with 53 percent who say the same of the United States. Five years earlier, the two global powers were neck-in-neck, at 59 percent for China and 58 percent for the United States.

In an era in which Africa is being courted by other major countries, including U.S. allies such as Japan, with offers of free trade zones and immigration to foster cultural exchange, the United States must make clear what makes it different—and better. Only then can the Trump administration’s commercial diplomacy reap the benefits it claims, for the United States as well as for Africa.

Pacific Perspectives on Trump’s Second Term

Uncertainty and Adaptation

Charles Edel, Kathryn Paik, and John Augé

Introduction

Before Donald Trump assumed office for the second time, there was rampant speculation about what exactly an “America First” foreign policy would amount to in this new administration. Governments, global leaders, and analysts across the world wanted to know what form Trump’s economic policy would take, and how much pressure he would apply to allies and partners perceived as not “pulling their weight” on defense spending. They also wondered whether Trump would be willing to muster coalitions of allies and partners to lean into competition with authoritarian actors in Tehran, Pyongyang, Moscow, and, above all others, Beijing.

Would a more assured and less constrained Trump overly privilege U.S. interests, potentially rendering the nation more isolated and alone? At their core, these questions revolve around whether Trump 2.0 will amount to “America First” or “America Alone” and if Trump will attempt to reform, abandon, or destroy the rules-based order. The answers to these questions carry enormous implications for the future of Australia, New Zealand, and the Pacific Islands region and for how countries across the Pacific will calibrate their own strategy. That, in turn, has implications for the United States’ own interests.

To understand the impact of these policy changes, what regional responses have looked like, and what next steps might be, the CSIS Australia Chair reached out to security experts, policy analysts, journalists, academics, and current and former government officials from around the region. All discussions were conducted on background to encourage candid conversations.

Unsurprisingly, as the authors consulted a broad range of individuals, the results of these conversations were not uniform. Nevertheless, taken together, they form a broad picture of how the region is thinking about, and reacting to, the emerging agenda of the Trump administration.

The Impact of Trump’s Policies on the Region

The past six months have seen a wide range of America First policies that have cut across development, trade, and defense. Arguing that foreign assistance needed to better align with U.S. national security priorities, the Trump administration paused or halted most foreign assistance, and the State Department began a full-scale review of multilateral institutions. The imposition of historically high tariffs and the cutting or halting of development aid are having the greatest impact on the region; however the United States’ review of multilateral architecture, its withdrawal from global institutions, and pressure on defense spending are also causing concern.

Australia

For Australia, a long-standing U.S. ally that holds a trade deficit with the United States, the imposition of tariffs and U.S. expectations on defense spending have had the biggest impacts. In April, Prime Minister Anthony Albanese stated that the 10 percent tariff on Australia had “no basis in logic” and “was not the act of a friend.” This sentiment was echoed across most of the authors’ interviews. Despite Trump’s deep unpopularity in Australia, overall public support for the U.S.-Australia alliance remains high. However, actions such as tariffs have the potential to significantly erode trust in the U.S.-Australia alliance. One respondent noted that “there are growing voices among elites openly questioning the value of the alliance.” There is also a sense that tariffs on allies are incongruent with great power competition, as “anything that gets any part of the supply chain out of China should be a win.”

The U.S. expectation that allies increase defense spending has created domestic political friction, and, for some, is an example of U.S. bullying. This comes even as many acknowledge that an increase in defense spending is necessary to fund both the nuclear submarine program under AUKUS Pillar I, as well as to remedy conventional military shortfalls. But even as some welcome this external pressure, unease remains over the public manner of these requests—and how they might be tied to other critical components of the alliance.

Additionally, perceptions of a capricious and transactional Washington are creating pressure to reconsider long-standing assumptions about the alliance. Moreover, there is a growing sense within Australia that the United States is withdrawing from its role as a global leader. One respondent summarized this sentiment, describing Australia’s perception of MAGA as: “an indifference to allies, a power-above-rules mindset, . . . a gutting of development assistance, and associated ceding of ground to China in the battle for influence in our region.”

New Zealand

The top concern for New Zealand is tariffs, as the United States has become New Zealand’s second-largest trading partner. The Luxon government has put significant time and effort into reinvigorating the U.S.-New Zealand relationship and was disappointed by the increase of New Zealand’s tariff rate from 10 to 15 percent on July 31. But it is more than mere disappointment; public consternation over trade is ultimately shrinking the permission space for New Zealand leaders to align more closely with the United States on key policy issues, such as potentially joining AUKUS Pillar II.

In addition to trade, interviews also revealed concern over the United States’ about-face on climate change; the reduction of development assistance, especially in the Pacific; and the potential implications of the U.S. review of multilateral institutions. Any reduction in funding or withdrawal from international organizations would be particularly alarming for New Zealand, given the country’s reliance on the current global system.

Pacific

While none of the Trump administration’s policies have been specifically directed at Pacific Island nations, recent announcements have disrupted much of the goodwill that had been built up over the past half decade of reengagement. In many cases, the implications on the ground have been immediate, with job losses and local civil society organizations left vulnerable.

Many respondents saw the administration’s combination of withdrawal from the Paris Agreement, shuttering of USAID, pause of foreign assistance, and implementation of tariffs as a demonstration of U.S. inconsistency and self-interest, a perception that is allowing China to recast itself as a reliable partner in the region.

How the Region Is Responding to America First

Australia, New Zealand, and the Pacific island region are reacting to these changes with a range of their own policies. Countries in the region are seeking to strengthen relationships and institutions outside of the United States, and some Pacific nations are considering leaning further into their relationship with China.

Australia

In response to growing uncertainty over U.S. actions and intentions on trade and defense policy, Australia is attempting to balance alliance commitments with domestic resource constraints and increasingly negative public sentiment toward the United States. Navigating defense spending has been particularly complex. While some Australians welcome external pressures on defense budgets, thus far the Albanese administration has resisted calls to raise defense spending in any meaningful way, a situation that may become politically uncomfortable for the current government.

Amid what it views as an increasingly transactional United States, Australia is also strengthening its broader network of relationships, including with Japan, South Korea, the United Kingdom, the European Union, Canada, and India. This move highlights a shift in Australian foreign policy to reduce dependence on a single nation, a shift which has been taking place over the last several years but has accelerated of late. Australia is also assessing where to fill gaps left by the United States, especially in the Pacific, even if it is already carrying the majority of developmental weight in the region. Yet, decreased confidence in the United States is also affecting Australia’s willingness to assert itself regionally. One respondent stated, “uncertainty around Trump also makes the government more hesitant to pick fights with China.”

Still, most respondents emphasized the continuing importance of the alliance in the Australian system even as Australia looks to bolster other relationships. Others pointed out that enhancing “spoke-to-spoke” ties is not necessarily a bad result, as it “breaks the hub and spoke system for good, making the spoke-to-spoke relationships much stronger.” However, this trend does reduce the United States’ ability to push its own agenda, and may put constraints on how far allies are willing to go to support U.S. interests.

New Zealand

With growing uncertainty over U.S. intentions, many New Zealanders are questioning whether the country can collaborate with the United States on global issues such as energy and trade. One respondent stated that some New Zealanders think that “the rules-based order has been obliterated . . . [which] is antithetical to [New Zealand’s] interests.” In response, New Zealand has been drawing even closer to its ally Australia, especially in navigating the current Trump administration, and is increasingly reaching out to other countries in the Indo-Pacific. Amid discomfort over U.S. trade policies, the government is looking at other ways to bolster economic resilience.

Pacific

Due to their small size and narrow economies, Pacific Island countries are limited in their ability to backfill development shortfalls or negotiate better trade deals. A common refrain among Pacific respondents was that recent U.S. actions will push Pacific countries to look to other nations—including China—for partnership. As Papua New Guinea Prime Minister James Marape diplomatically stated after the April tariff announcement, “We will continue to strengthen our trade relations in Asia and the Pacific. . . . If the U.S. market becomes more difficult . . . we will simply redirect our goods to markets where there is mutual respect and no artificial barriers.”

For some Pacific partners, the primary response to a less certain United States has been to hedge by maintaining relations with the West even as they deepen ties with China. Overall, this shifting environ- ment is creating opportunities for China to expand its influence in the Pacific. As one Pacific interviewee explained, “Gone are the days when China was widely feared in the Pacific. . . . now, it’s increasingly seen as a credible development partner.”

Implications for the United States

Taken in sum, U.S. policies are having the combined effect of undermining the United States’ moral authority and influence across the Pacific.

As the United States declines in popularity, its ability to prosecute U.S. national interests is also degraded. A recent Lowy Institute poll found that only 36 percent of Australians trusted America to “act responsibly,” a 20-point decrease since 2024. This reinforces what many interviewees alluded to: The perception of the United States as an unreliable and self-interested partner is negatively affecting public opinion and limiting policymakers’ ability to act in partnership with the United States. A former official noted that if AUKUS were being created now, the current Albanese government would not likely have the social capital to enter such a major agreement. What this means for the future of the U.S.-Australia alliance is less conclusive. While for many the alliance remains strong, there is the potential for a change in the trajectory of the partnership, with Australia becoming a “less dependable ally.”

Ultimately, this perception of U.S. retrenchment and unreliability creates opportunities for China to expand its influence. One official noted that “[China’s] message resonates, especially when the United States is seen to be retreating.” One respondent explained the direct implications for U.S. interests: “China will exploit this situation to deepen its campaign to persuade a wide range of Asian and Indo-Pacific nations to let it win without fighting, whether in the South China Sea or Taiwan.”

Recommendations from the Region

A topline message from almost all participants was the need for the United States to be more consistent in its resourcing and messaging, or as one interviewee stated: “Starting to meet deadlines, sticking to red lines. . . . There needs to be some sort of signal to the Indo-Pacific as to what’s important and what role they will play.”

Australia

In addition to greater consistency in policy, timelines, and messaging, the United States must communicate a coherent and credible Indo-Pacific strategy if it wants to shore up its influence and partnerships abroad.

While the architecture of the U.S.-Australia alliance remains strong, several respondents emphasized that U.S. engagement must respect the sovereignty, perspectives, and domestic politics of partners.

In a world where the Trump administration has shifted U.S. foreign policy to be more transactional, some respondents urged the United States to avoid zero-sum approaches and to treat partners differently from adversaries. One Australian former official stated that there is a logic to pursuing increased burden sharing but noted the importance of combining burden sharing with presence and collaboration.

New Zealand

Several New Zealand interviewees urged the United States to be more communicative and present with partners and allies, especially if the United States wants to have a voice in shaping the evolving multilateral architecture. To rebuild some of the lost momentum with the Pacific—a top concern voiced in interviews with Australians and New Zealanders—the United States could bring Pacific leaders to Washington for another U.S.-Pacific summit, and capitalize on U.S. strengths, such as providing education and scholarship opportunities to deepen ties with emerging Pacific Island leaders and to counteract Chinese efforts to build ties with senior officials in the region.

Pacific

In the Pacific, the United States could improve its visibility and messaging to counter narratives from adversaries like China. This messaging should be accompanied by action. “The United States needs to decide how important the Pacific really is to its strategic interests,” stated one journalist. “Don’t tell us the Pacific is vital, only to turn around and implement drastic aid cuts.”

Despite recent challenges, the United States remains an important player in the Pacific, and Pacific leaders are eager to see the United States demonstrate leadership and reinvigorate relationships across the region. In the Pacific, this is a relatively low-cost, high-gain endeavor. As one interviewee pointed out, “America doesn’t have to pay billions” to engage effectively.

Recommendations for the United States

While the Trump administration’s strategic approach to the region has yet to be fully delineated, 2025 has already brought an astonishing number of U.S. foreign policy shifts.

In addition to tangible effects on the ground, recent U.S. government actions have also created an environment whereby it is politically more difficult for partners and allies to align themselves with U.S. objectives, and concurrently China is able to frame itself as a more favorable partner.

At the same time, support for the U.S.-Australia alliance remains high, for the time being, and many Pacific countries are eager to regain the momentum they have built with the United States in recent years. To this end, respondents provided several observations and recommendations.

First, because the full extent of policy changes remains unclear, governments across the region are struggling to assess Trump’s ultimate direction and objective. Consequently, governments have been hesitant to shift their own strategies and resource allocations in meaningful ways. Interviews often emphasized the need for the United States to be more consistent and transparent in messaging to help partners better align their own systems more effectively.

Second, virtually all respondents urged Washington to develop and communicate a clear Indo-Pacific strategy. Doing so would allow these countries to calibrate their own policies, align where warranted, and deconflict where necessary.

Third, many individuals acknowledged that having partners and allies contribute more increases broader regional security. However, pushing for burden sharing should be combined with presence and collaboration to be most effective.

Fourth, uncertainty around how deeply the Trump administration is leaning into competition with Beijing is tempering how countries in the region are framing their own China policies. U.S. economic policy seems to be at cross-purposes with defense policy, with the former aimed at extracting more concessions and the latter intended to build collective resilience. Clarifying policy objectives, as well as better sequencing policy actions, would ease friction between Washington and the region on efforts to build a larger collection of nations committed to taking on the more harmful aspects of China’s continuous outward push.

Finally, almost all respondents noted that there has been a profound perception shift of the United States in the region. To ensure the United States retains critical influence in the Pacific, nearly all discussants urged the Trump administration to determine the direction of its development policy and underscored that soft power is a necessary enabler of hard power.

Transatlantic Relations Under Trump

An Uneasy Peace

Max Bergmann

Introduction

The transatlantic relationship is surviving, just. Every transatlantic interaction, new U.S. policy initiative, or presidential social media posting has the potential of triggering a deep rupture in the grand alliance. The surprise thus far is that the explosion and rupture have not yet happened.

During its first year, the second Trump administration has pushed to reorient the transatlantic alliance. Believing that the past alliance relationship was unfair, with the United States ensuring European security but getting little in return, the Trump administration has sought to invert the relationship, viewing allies more as clients and creating terms, conditions, and fees for service. The linkage between economic and security discussions, while not completely unprecedented, represents a new dynamic.

Thus far, European leaders have seemingly accepted the transactional shift in transatlantic relations, taking the necessary steps to appease Trump. Needing the United States to ensure its security and support Ukraine, Europe has not pushed back as it initially indicated it would. However, submitting to Trump’s demands on trade and fawning over the president has been an internal humiliation for Europe, leading to domestic political acrimony directed at Europe’s leaders.

For the European Union, with an economy roughly the size of the United States and China combined, this humiliation was a choice. Europe has the economic tools to respond assertively to the United States but has chosen not to deploy them, choosing instead to bide its time and manage relations with Trump while working to reduce its security dependence on the United States. By inverting the transatlantic relationship, Trump is triggering the European Union to do what the French have long called for—develop strategic autonomy and reduce its reliance on the United States. Europe is now acting to invest in defense and reorient its foreign, domestic, and economic policies to reduce its exposure to outside powers, whether that be the United States or China.

There is presently an uneasy peace in transatlantic relations. Yet, this peace may not last, especially as new transatlantic policy collisions emerge.

The Trump Administration’s Policies

For more than a half-century, a bright line separated security and economic issues, with the United States and European Union clashing over all sorts of policies but the U.S. commitment to NATO never wavering. When discussing a transatlantic trade row, President John F. Kennedy once sarcastically asked, “Is the Grand Alliance going to founder on chickens?” But now, it might.

Transatlantic relations today are incredibly dynamic because there is now a direct, transactional linkage between security and economic issues. President Trump has talked repeatedly about the need for Europeans to “pay up,” and the United States has sought European commitments in trade negotiations to purchase U.S. weapons and invest in the United States. Vice President J.D. Vance warned that if Europeans do not respect “free speech” (i.e., stop requiring content moderation on digital platforms), the United States may not come to their defense. In a leaked Signal chat over a planned strike on Yemen, White House Deputy Chief of Staff Steven Miller wrote, “If the US successfully restores freedom of navigation at great cost there needs to be some further economic gain extracted in return [from Europe].”

Transatlantic relations are currently focused on three increasingly entangled issues: the Trump administration’s “Liberation Day” tariffs, the Russia-Ukraine conflict, and the U.S. commitment to NATO.

Tariffs

The European Union had been preparing for a trade war with the United States since well before Trump took office. When President Trump announced tariffs against the European Union on April 2, 2025, the European Union announced retaliatory measures, just as it retaliated during trade fights in Trump’s first term. But when Trump abruptly announced a 90-day pause to create time for negotiations, the European Union similarly paused its retaliatory measures to give talks a chance. This is where the administration’s approach to negotiate a peace agreement between Russia and Ukraine came into play.

The Russia-Ukraine War

Initially, the Russia-Ukraine war looked like the issue most likely to cause a rupture in the transatlantic alliance. President Trump seemed to believe that Ukraine was the obstacle to peace, and he put immense pressure on Ukraine while offering praise of Vladimir Putin and sending emissaries to Russia offering economic enticements. After dressing down Ukrainian President Volodymyr Zelensky in the Oval Office in February 2025, the Trump administration cut off U.S. weapons deliveries and intelligence sharing to Ukraine, resulting in battlefield losses and creating deep concern across Europe. However, after Zelensky reengaged and expressed a desire to reach a ceasefire in talks with senior U.S. officials, the administration reversed its stance on military deliveries and intelligence sharing. European leaders were also deeply troubled and annoyed to be cut out of peace talks. They used the intervening months to engage Trump on the conflict in an effort to shift his views on Russia.

Meanwhile, Russia’s bombardment of Ukraine and its military offenses continued, despite U.S. efforts. The quickly convened Anchorage summit between Presidents Trump and Putin in August had a lot of pomp and circumstance, but there was little substantive breakthrough. Russia, it seems, was unwilling to make any real concessions. The convening of European leaders with President Zelensky at the White House the following week was much more positive than Zelensky’s February meeting and left European leaders believing that Trump had softened his stance toward Ukraine and hardened his stance toward Russia.

NATO

NATO was put on notice at the beginning of the Trump administration. Ahead of a meeting of European defense ministers in February, Secretary of Defense Pete Hegseth claimed in a written brief that the United States would no longer be “the primary guarantor of security in Europe.” The Pentagon also announced a force posture review, with reports indicating it would result in significant U.S. troop withdrawals from Europe. The signal being sent was that the burden of ensuring European security would no longer be shared, but instead shifted to Europeans.

Yet Europeans have since received mixed signals. The State Department has operated as if little has changed in the NATO alliance. It has opposed EU involvement in defense and encouraged the continued purchases of U.S. weapons, similar to past administrations. At the NATO summit, the United States adopted a familiar approach, pressing Europeans to make new defense spending commitments. Every European country, with the exception of Spain, agreed to spend 5 percent of their GDP on “defense”—specifically, a minimum of 3.5 percent on “pure” defense, with the remainder devoted to investment in critical security infrastructure—as demanded by President Trump. But the United States did not commit to do anything in exchange for European spending commitments; Washington did not commit to spending 3.5 percent, maintaining its current troop presence in Europe, or continuing to aid Ukraine.

European Responses

Europe has been torn about whether to confront or appease the Trump administration. While the European Union has the economic might to hit back, European security remains dependent on the United States through NATO. Europe has integrated its economies but not its militaries; reduced economic barriers within the bloc and close bonds with partners like Norway and the United Kingdom have created might in unity. Yet while European countries act as one economically through the European Union, European defense is fragmented across roughly 30 different states. European weakness on defense has hindered its ability to defend its economic interests.

The European Union was initially ready to retaliate, tit for tat, in response to U.S. tariffs. After the 90-day tariff pause, EU leaders were ready to engage in traditional trade talks. However, they soon discovered that this was not a typical trade negotiation involving reciprocal compromises and efforts to reduce trade barriers; rather, the Trump administration expected unilateral concessions. For Europe, this was not an economic calculus but a political one about the future of the transatlantic relationship, as a trade war with the United States could also destroy the transatlantic alliance.

The 90-day trade negotiations overlapped with the G7 and NATO summits in the summer, where European leaders eagerly sought to avoid a transatlantic rupture. At the NATO summit, European leaders heaped praise on the president and sought to meet his demands for more European spending. At the summit, Trump seemed relatively pleased and did not walk away from the alliance, as Europeans feared he might. The NATO summit thus successfully avoided a rupture.

Additionally, Trump’s rhetoric toward Putin on the Russia-Ukraine war hardened somewhat in this period, while his tone toward Ukraine softened. In response to the Pentagon indicating it would halt deliveries of air defense to Ukraine, NATO Secretary General Mark Rutte visited Washington in July, and European states agreed to in effect buy U.S. military aid for Ukraine, weapons the United States once gave to Ukraine as U.S.-funded security assistance. European leaders had averted the worst-case scenario for them and for Kyiv—the cutoff of U.S. weapons flows to Ukraine—even if Europe would now be paying.

Throughout this period of negotiation, European leaders felt they developed a rapport with Trump, and he seemed to appreciate high-profile summitry and the grandeur of European royal pageantry. This sapped the willingness of European states to back a strong retaliatory move on trade from the European Union. EU Director General for Trade Sabine Weyand said as much when she told a public forum that EU leaders accepted a trade deal at Trump’s Turnberry golf course in Scotland because if they did not, “the U.S. would abandon the security partnership with the EU.”

Yet U.S. leverage did not reach its high point until the summer of 2025. While it is unlikely that European states will fully meet the NATO spending commitments promised in the Hague, it is clear that European leaders agreed to spend more not just to appease Trump—in part this is because they do not believe they can rely on the United States any longer. European countries have already implemented a dramatic and sustained increase in defense spending in recent years—up 83 percent since 2015—both to rearm themselves and to aid Ukraine. If EU countries are to meet their new NATO defense spending commitments, the bloc would have to spend roughly as much as the United States on defense. Rearming Europe is a significant undertaking, and in the interim, European leaders have been playing for time. But at some point, Europe will be less reliant on the United States for protection and therefore more willing to stand up to Washington.

EU trade officials have also been working overtime to diversify Europe’s economic relationships and to shift the multilateral trading order to revolve around Europe. The European Union has sought to close or negotiate trade agreements with countries around the world. The bloc has finalized trade agreements with Mercosur (a bloc including Argentina, Bolivia, Brazil, Paraguay, and Uruguay), Indonesia, and Mexico and is working on agreements with India, the United Arab Emirates, and members of the Comprehensive and Progressive Trans-Pacific Partnership. From an EU perspective, the old trading order is not dead—it is only that the United States is no longer part of it. Time will tell if these EU efforts will succeed, but there has been tremendous global interest in engaging the European market.

Looking Ahead

There is likely more turmoil ahead in the transatlantic relationship, and it is unclear whether the present uneasy peace will hold. There appears to be significant hostility within the Trump administration toward Europe, viewing European leaders as essentially political opponents. It would not take a lot for the relationship to combust.

The biggest X factor may be the U.S. force posture review, which is due to be announced in the fall of 2025. While it seems apparent that the Pentagon is intent on passing the baton to Europe on security, the question of whether Trump will approve such cuts remains. European leaders will attempt to persuade him to maintain the status quo. Furthermore, domestic policy interest groups with power in the administration will want to use the potential for troop cuts as bargaining leverage with Europe on other policy issues. Should the United States announce significant cuts, European willingness to confront Trump will increase significantly. Trump’s efforts to make transatlantic relations transactional only works so long as the United States continues to provide the service of defending Europe. Otherwise, the client will inevitably fire the provider.

The next big issue to roil transatlantic relations will likely be Europe’s tech regulations. The Trump administration and big U.S. tech firms bitterly oppose EU regulations, which they say unfairly target them and restrict their business. U.S. tech firms are also deeply concerned that EU regulations could be adopted by countries worldwide, becoming a global regulatory standard. The Trump administration has also railed against European restrictions on “free speech” in response to the European Union’s Digital Services Act, which requires content moderation for online platforms. The Trump administration attempted to bring digital regulations into trade negotiations, but the European Union pushed back. While EU leaders have some room to discuss how they implement the Digital Services Act and Digital Markets Act, these are EU laws, and it is just as hard for the European Union to change a law as it is for the United States.

While a fight over tech regulations would likely upend the U.S.-EU trade deal and initiate a trade war, this is a war the European Union is ready to fight. While a trade war would not be good for Europe, trade with the United States amounts to 20 percent of EU exports, roughly 3 percent of EU GDP. It would certainly be survivable. The European Union could also retaliate by using its “anti-coercion instrument,” which widens its ability to respond. As the Financial Times’ Martin Sandbu assessed, “The US has a lot more to lose than either side’s behaviour would suggest. Whatever pain the US can impose through tariffs, the EU can do the equivalent through measures against service imports or US companies’ intellectual property rights.” The European Union would no doubt lose more economically, but President Trump could lose more politically.

There are many other potential transatlantic flashpoints: the European Union introducing a carbon tariff in 2026; U.S. sanctions against officials of the International Criminal Court; growing European recognition of Palestinian statehood; the ending of U.S. foreign aid; and U.S. support of far-right parties in Europe.

Lastly, the issue of Ukraine and Russia remains. Presently, Europe feels it has successfully moved President Trump to adopt a firmer line toward Russia. However, as a peace agreement looks increasingly unlikely, it remains unclear who the president blames, if anyone, for the failure of the talks. Furthermore, U.S. leverage in the conflict—perhaps never quite as strong as President Trump thought—is decreasing as U.S. military aid and deliveries to Ukraine decline. President Trump appears to have no intention of asking Congress for more assistance. Meanwhile, as European defense production ramps up for itself and for Ukraine, and as Ukraine’s indigenous defense industry grows, Ukraine is becoming less reliant on the United States. Europe, not the United States, will become Ukraine’s most important supporter, sapping European willingness to cater to the whims of the president on the war.

Recommendations for the United States

The Trump administration is right to want to transition responsibility for defending Europe to Europeans. However, this should be a managed transition, as it will take time for European states to organize themselves to replace U.S. combat power. An abrupt transition will leave Europe exposed militarily and cause a deep, possibly permanent rupture in transatlantic relations.

Additionally, the Trump administration should recognize that burden shifting will also change the nature of transatlantic relations. This will inevitably result in the weakening of U.S. influence; U.S. defense firms will lose market share in Europe, and the European Union will play an increasing role integrating European defense efforts. That is the cost of such a transition, and frankly, it is one worth embracing. But that means instead of opposing EU defense initiatives, the Trump administration needs to accept them.

This transition will also prompt Europe to stand up for itself more assertively. With a militarily stronger Europe, should the Trump administration push too far economically, the European Union may snap back hard. Policymakers in Washington should recognize that Brussels has significant retaliatory tools, and an overly aggressive push by the United States and its companies risks triggering a major European backlash. The United States should recognize that the European Union is not going to abandon its domestic laws on tech or climate. While Europe is dependent on U.S. tech companies, it could conceivably take dramatic steps to reduce its dependence, just as it is doing to decouple from Russia on energy. This would be the worst possible outcome for U.S. firms.

Lastly, an additional effect of the Trump administration’s transactional approach to transatlantic relations may be to facilitate the emergence of the European Union as a global actor. While the European Union moves slowly, in a world without a dependable United States, Europeans are being increasingly forced to act as one on the world stage. Brussels, for instance, without any pressure from Washington, has adopted a firmer approach toward Beijing, especially regarding its support for Moscow and its trade practices. The European Union’s global economic and commercial diplomacy on trade, climate, and regulations has ramped up and made real headway. The European Union and its member states are set to spend like a major military power. Additionally, the EU energy and climate transition is continuing apace, with European reliance on U.S. natural gas decreasing.

Trump’s policies and rhetoric are pushing Europe to be more assertive globally. This is a positive development, but it also means transatlantic relations will have to adjust. The United States has long taken European weakness for granted. But as Europe strengthens, the Trump administration will need to come to terms with the fact that the stronger, more assertive Europe it helped bring about will not be nearly as compliant.

Japan’s Response to Trump 2.0

Sustaining U.S. Ties, Strengthening International Partnerships

Kristi Govella

Introduction

Although U.S.-Japan relations under the second Trump administration started on a positive note with the February summit between President Donald Trump and Prime Minister Ishiba Shigeru, the subsequent months have been full of challenges. Negotiations over new U.S. tariffs have dominated the headlines, and there are also questions about the future of the U.S.-Japan alliance. Thus far, Tokyo has responded with a dual strategy of sustaining close ties with the United States while also bolstering relationships with other like-minded countries. However, Japanese leaders are facing increasing pressure both at home and abroad, and there is evidence of growing strains in U.S.-Japan relations.

Moving forward, it is important for the United States and Japan to prevent national political and economic imperatives from derailing mutually beneficial bilateral cooperation. While asking Japan to contribute more on the economic and security fronts, the United States should also articulate a positive vision for strategic cooperation with Japan, offering pathways for collaboration and demonstrating sensitivity to the increasingly fluid political situation in Japan. This will help to ensure that Washington and Tokyo can continue to jointly address intensifying security threats and other challenges, even as domestic priorities increasingly demand leaders’ attention in both countries.

Trump Administration Policies

Since the beginning of the second Trump administration in January 2025, U.S. tariff policies have had the greatest impact on Japan. The United States is Japan’s top export market. The March 26 U.S. announcement of 25 percent tariffs on automobiles and auto parts targeted an industry that constitutes about 21.5 percent of Japan’s total exports and employs roughly 8.3 percent of its workforce. When combined with the 25 percent reciprocal tariff rate separately proposed by the Trump administration, these tariff policies were estimated by some to have the potential to reduce Japan’s total GDP by as much as 0.7–0.8 percent—a significant threat to a country whose annual real GDP growth rate is only around 0.5 percent. Consequently, tariff negotiations were a high priority for Tokyo, and the United States and Japan announced an agreement on July 22 that promised the United States up to $550 billion in Japanese investment and improved market access for U.S. producers, while also providing Japan with some relief in the form of reduced 15 percent rates on reciprocal and automobile tariffs.

The deal was hailed as a significant political victory on both sides, but several major concerns about implementation caused frictions for weeks after the initial announcement, until several new documents were concluded on September 4. First, Japan’s 15 percent reciprocal tariff rate was initially incorrectly implemented, resulting in higher tariffs being charged until an executive order (EO) corrected the matter. Second, the Trump administration did not reduce its original 25 percent tariff on Japanese automobiles to the agreed-upon 15 percent until the September 4 EO, a delay that cost Japanese car companies an estimated $20 million per day and generated much anxiety about whether the United States would fulfill its commitment. Third, the initial announcement raised major questions about the promised $550 billion from Japan, so a memorandum of understanding clarified that investments must be made before the end of Trump’s second term and that the president and a U.S. investment committee would play an active role in selecting projects, with the stipulation that higher tariffs could be imposed if Japan declines to provide funding. Although these new documents resolved some of the ambiguities that had caused tensions in U.S.-Japan relations, they also made it clear that the two countries will continue to negotiate over trade and investment issues in the coming months.

On the security front, Tokyo has been partially encouraged by statements from the White House and the Department of Defense that reaffirm the importance of the U.S.-Japan alliance, as well as by continued U.S. participation in the Quad and trilateral U.S.-Japan-ROK meetings. However, Tokyo is concerned about impending demands from Washington for increased burden sharing and defense spending. After decades of having an informal defense spending limit of 1 percent of GDP, Japan has already embarked upon a historic increase in defense spending to 2 percent of GDP by 2027. Although recent reports indicate that the U.S. government would like Japan to further increase defense spending, this will be difficult considering Japan’s long-term economic challenges related to rising healthcare and pension costs in an aging society and short-term challenges related to inflation, the weak yen, and the negative impacts of U.S. tariffs.

Beyond the bilateral context, decisions by the United States to cut back on foreign aid and other types of global engagement have also impacted Japan indirectly. Tokyo is concerned about the consequences of decreased U.S. engagement on the wider security environment, particularly at a time when threats from China, Russia, and North Korea are intensifying. There are also broader concerns that decreased U.S. investment in soft-power initiatives will increase the relative influence of China in Southeast Asia and other parts of the world in ways that threaten Japanese interests.

Responses from Japan

To some extent, the policies of the second Trump administration echo the dynamics that Japan experienced during the first Trump administration, when Tokyo was pressured to negotiate two bilateral trade agreements and contribute more to defense burden sharing. Throughout both administrations, Japan has responded in a broadly similar manner. Tokyo is pursuing a dual strategy of sustaining a close relationship with the United States while also strategically strengthening partnerships with other countries to stabilize the international environment and fill diplomatic gaps left by changes in U.S. policy. However, due to increasing domestic political instability, questions remain about the extent to which Japan will be able to play a more significant international leadership role.

Sustaining Close Ties with the United States

Japan’s high priority on maintaining close ties with the United States has been clear from the beginning of the second Trump administration. For example, Prime Minister Ishiba was one of the first world leaders to meet with Trump after his inauguration. Similarly, after Trump’s April 2 “Liberation Day” announcement of tariff hikes, Japan was one of the first countries to begin talks with the United States, with lead Japanese negotiator Akazawa Ryosei traveling to Washington on an almost weekly basis.

The intense pace of meetings on tariff and investment issues has received the most attention over the past nine months, but U.S.-Japan alliance cooperation has also been sustained during this period. The United States and Japan are continuing plans to upgrade U.S. Forces Japan to a joint force headquarters, which will modernize its command and control architecture and improve coordination. Joint military exercises and bilateral discussions on deterrence and other issues have continued.

However, the second Trump administration’s economic policies and relatively more unilateral tone toward U.S. allies have prompted more visible frustration from Tokyo than during the first Trump administration. For example, in June, Japan canceled the annual 2+2 Ministerial Dialogue of top Japanese and U.S. diplomats and defense chiefs, which was widely interpreted as a reaction to U.S. demands for an increase in Japanese defense spending. In an unusually critical public statement, Onodera Itsunori, chairman of the Policy Research Council of the Liberal Democratic Party (LDP), described Trump’s July 7 tariff notification letter to Japan as “very disrespectful to an ally.” Perceptions of U.S. unreliability have also stimulated debate about whether Japan should become more independent. For example, amid tense tariff negotiations in July, Ishiba said, “We need to make more efforts to become less dependent on the U.S. It would be a problem if we came to regret that they were telling us to do what they say because of that dependence.”

Public opinion also reflects growing concerns about the United States. For example, an annual poll by the Yomiuri Shimbun conducted in June showed that only 22 percent of Japanese respondents somewhat or greatly trust the United States—the lowest figure since the poll was first conducted in 2000. And according to an Asahi Shimbun poll, 77 percent of Japanese respondents do not think that the United States would defend Japan in a crisis.

Strengthening International Partnerships

At the same time as it has sought to maintain close ties with the United States, Japan has also strengthened its relationships with other key partner countries to attempt to stabilize and strengthen its strategic position. Japan has continued to engage in minilateral dialogues and initiatives with other U.S. allies and partners in the Indo-Pacific. This has been done with direct U.S. involvement in some cases, such as in trilateral meetings with South Korea and the Philippines, as well as with Australia and India as part of the Quad.

In addition to these U.S.-inclusive engagements, Japan has separately cultivated its bilateral ties with other U.S. allies in the Indo-Pacific. Tokyo has engaged positively with South Korean President Lee Jae Myung since he took office in June, including two leaders summits in August and September. Ishiba and Philippine President Ferdinand Marcos Jr. announced in April that they had started talks on a potential information security agreement and an acquisition and cross-servicing agreement, building on the reciprocal access agreement (RAA) between the two countries that entered into force this September. Japan and Australia are continuing to deepen ties through more frequent joint exercises under their own RAA, and at a recent 2+2 meeting, they announced plans for closer cooperation in areas such as economic security and advanced capabilities. In August, Japan’s Mitsubishi Heavy Industries was selected for a $6.5 billion deal to build warships for the Royal Australian Navy, Japan’s most consequential defense sale to date.

Elsewhere in the Indo-Pacific and around the world, Japan has pursued closer relationships with other countries that have been shaken by recent changes in U.S. foreign policy. Ishiba visited Vietnam in April, and the two countries signed cooperation deals on semiconductors and energy. In August, amid worsening U.S.-India ties, Japan and India released a joint vision for increased cooperation in areas such as economy, economic security, mobility, environment, technology and innovation, and health. The same month, the Tokyo International Conference on African Development gathered leaders from 49 African countries to discuss economic cooperation, and Ishiba announced several initiatives to encourage Japanese companies to move into the African market.

Japan has also continued bolstering ties with U.S. allies in Europe on both economic and security issues. Although Ishiba did not attend the July NATO summit, Tokyo has generally been on a trajectory of closer cooperation with NATO since the start of the war in Ukraine. The two sides agreed to step up defense industry cooperation in April, and Japan deployed its Air Self-Defense Force aircraft to Europe for the first time ever for defense exchanges in September. At the July Japan-EU summit, economic security and stabilizing the international trade order were key themes, and the parties agreed to launch a dialogue on defense industry cooperation and negotiations to facilitate the exchange of classified security information. In addition, Japan has engaged bilaterally with partners such as the United Kingdom, which signed an RAA with Japan in 2023. The two countries held their first economic 2+2 meeting in March, and they are also codeveloping a sixth-generation stealth fighter jet with Italy.

Notably, there is little evidence that Japan is seeking a fundamentally closer relationship with China, although ties have warmed since Ishiba took office in October 2024. High-level diplomatic exchanges have resumed, and economic links between the two countries remain strong. However, Tokyo continues to have serious concerns about China’s continuing military buildup, its aggressive behavior in the East and South China Seas, and its economic practices, as well as about China’s burgeoning cooperation with Russia and North Korea. In May, for example, Japan and China accused each other of violating airspace over the disputed Senkaku/Diaoyu Islands. Recent diplomatic activity between Tokyo and Beijing has focused mostly on promoting stability, easing tourist visa restrictions, and reducing tensions over issues such as China’s ban on Japanese seafood imports.

Demonstrating International Leadership?

The question for many observers is whether Japan will be able to play a leading international role, as it did when it spearheaded the creation of the Comprehensive and Progressive Trans-Pacific Partnership after the United States withdrew during the first Trump administration. Japan’s actions during that time were made possible by strong, stable domestic political leadership under former Prime Minister Abe Shinzo, combined with a relative lack of populist, anti-globalization sentiment.

However, the current situation in Japan is very different. In July, the ruling LDP-Komeito coalition lost its majority in both houses of parliament for the first time in 70 years. Populist sentiment has begun to rise in Japan, and Japanese voters are deeply concerned about inflation and other economic issues that have been worsened by U.S. tariffs. In early September, Ishiba announced that he would resign as prime minister, leaving his successor in a difficult situation of having to revitalize a weakened LDP, address voters’ demands, and contend with a volatile foreign policy environment.

These factors suggest that it will be more challenging for Japan to play a prominent role in shaping international policy this time around. However, there are still opportunities for Tokyo to take the lead on important issues and build coalitions of like-minded countries to address mutual concerns. Many other countries are facing similar challenges to Japan, and this can be a source of shared interests rather than weakness.

Recommendations for the United States

Close relations with Japan are crucial to the security and prosperity of the United States. Despite the challenges of the past nine months, Japan has continued to behave like a responsible partner, accommodating U.S. demands where possible while also trying to protect its own national interests. However, recent changes in U.S. foreign policy have deepened Tokyo’s concerns about Washington’s reliability, and continued uncertainty over trade and other issues risks damaging mutual trust between the two allies. In this context, what can the U.S. government do to promote productive relations with Japan moving forward?

First, the U.S. government should avoid letting domestic economic imperatives derail important mutually beneficial cooperation with Japan on deterrence and other issues, and Washington should reassure Japan of its importance as an ally. Although the Trump administration has made it clear that U.S. economic prosperity is a top priority, that does not preclude it from working with Japan—in fact, close relations with Japan are necessary to ensure the international stability that underpins U.S. success.

Second, the United States should clarify its major strategic priorities beyond the recent focus on trade and offer paths forward for cooperation with Japan on security, economic security, and other issues. New U.S. strategic documents such as the National Defense Strategy may send important signals to Tokyo about how it can work with Washington to address concerns about China or engage in defense industrial base cooperation, for example. There is also much to be gained from building on existing cooperation with Japan on economic security issues. The planned $550 billion in Japanese investment in sectors such as semiconductors, pharmaceuticals, metals, critical minerals, shipbuilding, energy, AI, and quantum computing could catalyze deeper collaboration.

Third, U.S. leadership should be aware of the increasingly fluid and unstable political environment in Japan and exercise flexibility in negotiations. The LDP-Komeito coalition is in its weakest position in over a decade, and Japanese voters are demanding solutions to inflation and other economic problems that have been exacerbated by U.S. tariffs. During his first term, Trump displayed awareness of then–Prime Minister Abe’s domestic political challenges, even publicly commenting that he would wait until after a Japanese election to press Abe on bilateral trade negotiations. Demonstrating the same kind of sensitivity during this second Trump administration will help to ensure that Japanese leaders can build support at home to enable stronger cooperation with the United States.

President Trump’s Latin America Policy

Short-Term Gains, Long-Term Risks

Christopher Hernández-Roy, Juliana Rubio, Jessie Hu, and Sam Smith

Introduction

One lament often heard from Latin America and the Caribbean (LAC) since the turn of the twenty-first century is that the United States has paid insufficient attention to the region. LAC has been left wanting for trade and support for development—and in some cases, support for democracy. For example, the idea of creating a continent-wide free trade area to increase prosperity, launched at the First Summit of the Americas, quietly died as the deadline for concluding negotiations passed in 2005. President Obama, at the Fifth Summit of the Americas in 2009, acknowledged that promises of partnership with Latin America had gone unfulfilled in the past and vowed to do something about it. Aside from a recalibrated approach toward Cuba, however, not much has changed as of 2025. President Trump’s first administration launched the América Crece initiative, of which, as of this writing, officials in the region have only a vague memory; meanwhile, President Biden’s Americas Partnership for Economic Prosperity was labeled as intentionally unambitious and vague.

Under President Trump’s second term, the United States has given the Western Hemisphere more attention in nine months than many past administrations of either party have since the Cold War—though in the region, some now regret getting what they wished for. This change in approach springs from a concern that the United States has prioritized power projection and policing global hotspots over attending to its “shared neighborhood” for too long, thereby allowing China to expand its influence in LAC and allowing criminal organizations and record migration flows to directly threaten U.S. security. In response to these challenges, and to a perceived need to right trade imbalances in parts of the region, the current administration seems to be adopting a “Monroe Doctrine 2.0” approach to the Western Hemisphere: decimating soft-power initiatives in favor of deploying (or threatening to deploy) military force, while also relying on economic coercion and trade pressure. This is in line with an “America First” approach guided by narrower country-specific interests, rather than by the “enlightened” self-interest of past U.S. foreign policy.

The Trump Administration’s Policies

Soft Power

Foreign assistance and soft-power programs are important tools for engaging with the LAC region. They foster a sense of goodwill and cooperation while strengthening the United States’ influence and reputation. At the same time, these programs have been criticized for fostering dependency and failing to enable countries to achieve self-sufficiency; combined with the view that they were incompatible with an America First foreign policy, this led the Trump administration to attempt to end or significantly reduce them. While official reactions to the closures have been mixed, this decision has had an outsized impact to parts of LAC—especially Central America, Colombia, and Haiti.

International development initiatives like the U.S. Agency for International Development (USAID) strengthened democracy and the rule of law, reduced poverty and corruption, fortified civil society, supported the development of more professional police forces, and contributed to the fight against drug trafficking. Most USAID programs have now closed, allowing competitors, including China, to potentially step into poverty reduction or development projects—though not likely democracy or human rights projects—thereby gaining greater leverage in the region. Much of U.S. aid to LAC was meant to support refugees and migrants. Now, projects that provided food, shelter, water, and health care are also shutting down. For communities living in poverty and experiencing displacement, this means more hunger, more untreated illness, and greater desperation—right when large numbers of deportees are being sent back to Latin America under President Trump’s aggressive migration enforcement efforts. The ripple effects of the United States’ wholesale deprioritization of soft power are being felt throughout the region.

Hard Power

Since coming into office, the Trump administration has demonstrated a willingness to respond to public safety issues—particularly drug control—with military assets. President Trump has also threatened the use of military force to achieve political objectives, such as to “take back” the Panama Canal or to acquire Greenland.

The return of hard power in the Western Hemisphere is most evident in the militarization of the “war on drugs,” where the administration has increasingly relied on the U.S. military to curb the flow of illegal drugs. On January 20, 2025, President Trump issued Executive Order 14157, designating cartels and other organizations as Foreign Terrorist Organizations (FTOs). This shift broadens the range of countermeasures available for the United States to target these groups. Shortly thereafter, the Department of Defense sent 1,500 active-duty service members and additional air and intelligence assets to the southern U.S. border.

The FTO designation marked a first step toward legitimizing the use of unilateral military responses to perceived drug threats. On August 8, 2025, the New York Times reported that President Trump had secretly signed a directive to the Department of Defense to begin using military force against Latin American drug cartels, indicating that attack plans would be ready by mid-September. This was followed by the deployment of three Aegis-guided missile destroyers, along with the Iwo Jima Amphibious Ready Group and the 22nd Marine Expeditionary Unit (which includes more than 4,500 sailors and Marines), to waters off Venezuela. On September 2, U.S. forces carried out a strike against a Venezuelan boat allegedly carrying drugs and killed 11 “terrorists” on board. The next day, the administration declared the start of a new campaign against Venezuelan cartels. This gunboat diplomacy is clearly aimed at pressuring the Maduro regime and sending a message to other Latin American governments, including Mexico, to intensify efforts against cartels and curb illicit drug flows to the United States.

Economic Coercion

The Western Hemisphere has been a test case for President Trump’s use of import tariffs to achieve non-trade foreign policy objectives through economic coercion. He used the International Emergency Economic Powers Act to impose a 25 percent tariff on Mexico and Canada (as well as China), with the justification that drug and migrant flows from those countries represented a national emergency for the United States. He briefly imposed a 25 percent tariff on Colombia when the country attempted to block the return of its citizens deported from the United States. His 50 percent tariff on Brazil is an intrusion on the country’s judicial system, aimed at pressuring the government to drop charges against former President Jair Bolsonaro, who was accused and subsequently convicted of staging a coup after losing the 2022 election. It is also an effort to challenge Brazil’s judicial rulings on freedom of speech issues. While president-elect, Trump also threatened Canada with “economic force” as a means to make it the 51st U.S. state.

President Trump’s separate sectoral tariffs on steel, aluminum, and copper have hit the Western Hemisphere particularly severely. Canada, Brazil, and Mexico are the United States’ top sources of steel imports. Canada is its single-largest source of aluminum, while Chile, Canada, Mexico, and Peru account for 97 percent of imported copper. While these tariffs are likely related to the president’s laudable expressed goal of increasing production of these metals at home, there is no doubt that in negotiations with Canada and Mexico they are also used as pressure to address non-trade irritants. While the Mexican economy seems to be weathering the tariffs for now, Canada’s GDP shrank in the second quarter of 2025 by 1.6 percent on an annualized basis—a much larger contraction than expected.

Outside of North America—with the exception of Nicaragua, which saw an 18 percent “reciprocal” tariff imposed—the rest of the hemisphere has either had the 10 percent baseline tariff imposed or a slightly higher 15 percent tariff. The variation seems to be related in part to if countries have a trade surplus or deficit with the United States. In an effort to further squeeze the Maduro regime, countries that import Venezuelan oil may also face a secondary 25 percent tariff on goods they export to the United States.

How Has the Region Responded?

Soft Power

One of the leaders most concerned with the deep cuts to USAID is President Luis Abinader of the Dominican Republic, who fears not only the impact at home but also in neighboring Haiti, where ongoing turmoil inevitably spills over into his country. In Guatemala, despite the election of a progressive leader, the country has become a willing ally of the Trump administration by accepting deported Guatemalans as well as other migrants, while remaining largely silent about the cuts to aid. Mexico’s President Claudia Sheinbaum, in contrast, has said “it is better that they close it,” referring to USAID—which her predecessor deemed “interventionist”—while in El Salvador, President Nayib Bukele has happily said that there is “no opposition without [USAID] money,” leaving him in control of a one-party state. In Colombia, President Gustavo Petro welcomed the cuts, as he claimed the dependency on the United States was detrimental to Colombia’s sovereignty. It is evident that reactions to diminished aid have thus been shaped less by the programs’ benefits for democracy, human rights, or civil society than by effects on current leadership, with the strongest criticism coming from governments facing democratic backsliding or led by ideological opponents of the U.S. administration.

Hard Power

So far, responses to Trump’s hard-power projection have been mixed. President Sheinbaum has firmly defended Mexico’s sovereignty, rejecting the suggestion of U.S. boots on Mexican soil. At the same time, she has made concessions by sending 10,000 additional troops to the border and handing over high-level cartel leaders to face justice in the United States. President Nicolás Maduro in Venezuela condemned the U.S. deployment actions as “illegal” attempts to topple his regime and announced that he would mobilize up to 4.5 million militiamen throughout the country in response. Colombia’s President Petro responded by saying a military strike against neighboring Venezuela could drag Colombia toward a regional conflict and warned that “it would be the worst mistake.”

On the other hand, some governments in the region have been supportive of U.S. policy. Argentina designated the Tren de Aragua and the Cartel de los Soles as terrorist organizations, as did Paraguay and Ecuador; the Dominican Republic also singled out the Cartel de los Soles, but not Tren de Aragua. Guyana and Trinidad and Tobago expressed their willingness to collaborate on joint actions with the United States against drug trafficking. The prime minister of Trinidad and Tobago, Kamla Persad-Bissessar, said she would give the United States access to its territory should Venezuela invade Guyana, revealing another possible aspect of U.S. naval deployment to the area.

Economic Coercion

The primary result of the Trump administration’s economic coercion approach is that major regional trading partners have sought to diversify their markets to reduce their reliance on the United States. Canada has looked to beef up trade with Europe by signing a security and defense partnership with the European Union, allowing Canadian companies to participate in the $840 billion ReArm Europe program, and it now sells more oil to China than to the United States from its Trans-Mountain Pipeline. It has also restarted trade discussions with Mercosur (a block including Argentina, Bolivia, Brazil, Paraguay, and Uruguay). Mexico and Canada are having discussions about strengthening their trade and diplomatic ties, and Mexico has also signed a trade agreement with the European Union, as have the Mercosur countries (though its ratification is far from certain). Meanwhile, longtime U.S. ally Colombia recently joined the Belt and Road Initiative and acceded to the BRICS Bank, and Brazilian exporters are accelerating partnerships in Africa, Europe, the Middle East, and Southeast Asia. Brazil also signed an agreement with Vietnam and sent a trade mission to Mexico. Even smaller countries such as Guatemala that rely heavily on the United States are looking for new partners, including India.

Implications

Soft Power

The loss of U.S. foreign assistance weakens Washington’s broader influence; any messaging on democracy, human rights, and the rule of law now carries less weight, making it harder to rally support against backsliding, corruption, and abuses. The loss of assistance in places like Central America, Colombia, and Haiti could fuel political and social instability and undermine regional cooperation. The resulting instability—caused by increased migration pressures and greater openings for China and Russia and the undemocratic values they promote—runs counter to long-standing U.S. interests in the hemisphere.

Hard Power

While military operations may deliver headline-grabbing metrics—such as sinking the Venezuelan boat, killing or capturing a certain number of cartel leaders, destroying production centers, or seizing large quantities of drugs on land or at sea—cartels can quickly replace their leaders and rebuild operations with their substantial financial networks. Only a sustained and intensive campaign against cartel activity—whether in Mexico, the Caribbean, or South America—may significantly erode the capabilities of foreign terrorist and transnational criminal organizations. If the United States were to launch extensive military actions against cartels, inter- and intra-cartel violence would escalate, there would likely be large numbers of collateral casualties, and internal displacement could increase. The resulting chaos and bloodshed, compounded by the reawakening of traumas from past U.S. military interventions, would likely fuel widespread anti-American sentiment. This, in turn, could push countries away from cooperating with Washington on the issues the Trump administration prioritizes most and pave the way for LAC to seek alternative partners, including Beijing and Moscow.

Economic Coercion

A May 2025 opinion poll commissioned by The Economist found that most South American countries surveyed now view China as the more respectful superpower and the more reliable trading partner. Although countries will likely make concessions to maintain access to the important U.S. market in the short term, the Trump administration’s economic coercion is leading to a deliberate effort to rewire international trade networks to diversify away from the United States in the medium and long term.

Recommendations for the United States

The lament that the United States did not pay enough attention to the LAC region was really a call for greater investment and business partnerships that would allow the region to grow under stable democratic governments, therefore benefiting the United States both economically and geostrategically. Yet under the Trump administration, Western Hemisphere countries are being pressed to take back large numbers of migrants, intensify efforts to combat drug trafficking, and take steps to box out China. All this is happening while U.S. support for development, rule of law, and democracy-strengthening programs has essentially ceased, and as the administration has increasingly used economic coercion or threats of military force to achieve its goals. Even continued access to the U.S. market occurs under less favorable conditions than in the past. These efforts may produce some results desired by the Trump administration in the short term, but they will likely create more distance between Washington and the region over time, to the benefit of U.S. rivals.

To help avoid that outcome, the Trump administration would do well to adhere to the vision outlined by Secretary of State Marco Rubio on the eve of his first visit to the region, when he stated that “even when circumstances demand toughness, the president’s vision for the hemisphere remains positive. We see a prosperous region rife with opportunities. We can strengthen trade ties, create partnerships to control migration, and enhance our hemisphere’s security.” This U.S. “toughness” needs to be accompanied by efforts to create opportunities that contribute to the region’s prosperity.

The Trump Administration’s Middle East Policy

Shaping an Emerging Regional Order

Mona Yacoubian

Introduction

The Middle East figures prominently in the second Trump administration’s foreign policy, beginning even before Trump’s inauguration with the administration’s involvement in the January 2025 Gaza ceasefire and hostage release. Referencing the deal in his second inaugural address, the president highlighted his aspirations to be a “peacemaker and unifier.” Indeed, rather than adopting an isolationist approach to the region as favored by its MAGA base, the Trump administration has thrust itself into the fray of the region’s defining conflicts. With the Middle East at a “hinge moment” where the old order is collapsing and a new order emerging, the Trump administration could play a defining role in stabilizing the region and shaping the contours of a new Middle East. But the president has not demonstrated the attention and commitment needed, nor provided his administration with the necessary resources and bandwidth, to bring his vision to fruition.

The administration has had several touchpoints in the region from its earliest days. Israeli Prime Minister Benjamin Netanyahu was the first foreign leader to meet with President Trump in a February 4 Oval Office meeting. The president’s first major foreign trip was also to the region when he traveled to Saudi Arabia, Qatar, and the United Arab Emirates (UAE) in May. In many ways, the trip embodied the president’s approach to the Middle East: highly transactional, while short on groundbreaking diplomacy and prone to some unexpected twists. It highlighted the administration’s focus on commercial deals, with investments reportedly valued at $2 trillion. At the same time, the president did not announce progress on various diplomatic efforts, despite hopes for another Gaza ceasefire or movement toward a deal with Iran.

Yet, he stunned many with his announced decision to lift sanctions on Syria, followed by a surprise meeting with Syria’s interim president, Ahmed al-Sharaa. Most significantly, while the trip appeared to signal a reorientation of U.S. Middle East strategy away from military intervention in the region, President Trump ordered strikes on Iranian nuclear facilities in concert with Israeli military intervention less than one month later.

The Trump Administration’s Middle East Policies

In examining the Trump administration’s Middle East policies, three decisions hold the potential for the greatest impact on the region: (1) U.S. strikes on Iranian nuclear facilities, (2) lifting sanctions on Syria and normalizing relations with the transitional government, and (3) broad support for the Netanyahu government’s Gaza policies. These decisions either touch on the region’s two defining conflicts—Iran and Gaza—or affect the transition trajectory of a regional linchpin, Syria, with enormous geostrategic stakes for the region. Taken together, they will play a critical role in shaping the contours of the Middle East’s emerging order, for better or worse.

U.S. Strikes on Iranian Nuclear Facilities

On June 22, the United States carried out Operation Midnight Hammer, targeting Iranian nuclear facilities at Fordow, Natanz, and Isfahan. The U.S. strikes came as part of a wider 12-day conflict between Israel and Iran that started on June 13 when Israel initiated strikes on Iranian nuclear and missile sites as well as its military leadership. Iran undertook counterstrikes against numerous targets across Israel, although most Iranian strikes were intercepted by Israel’s missile defenses. Iran also retaliated against the United States with a carefully choreographed strike on al-Udeid air base in Qatar. There were no casualties, and Qatar quickly mediated a ceasefire that—while shaky—remains in place.

Damage assessments have varied since the attacks, but recent U.S. assessments judge that the Fordow nuclear facility was badly damaged. However, the whereabouts of Iran’s store of 400 kilograms of highly enriched uranium remains unclear, raising the prospect that Tehran might yet pursue its nuclear ambitions. As of early September, Iran has moved toward resuming cooperation with the International Atomic Energy Agency but has not resumed negotiations with the United States. Both Iran and Israel have warned that the conflict could resume, raising the prospect that the United States could once again be drawn in.

Trump’s decision to intervene militarily against Iran may be one of the most consequential of his presidency. The U.S. strikes on Fordow—long contemplated but until June 2025 never pursued—marked a significant escalation and the first large-scale U.S. strikes on Iranian targets in nearly 40 years. The decision could either pave the way for a resumption of negotiations—and a possible deal, given Iran’s weakened position—or Tehran could decide to sprint toward a crude nuclear device, provoking renewed military strikes by Israel and possibly the United States. In the first instance, Trump’s decision could move the region significantly forward on a path toward de-escalation. In the second instance, the decision could contribute to the region plunging deeper into war.

Lifting Syria Sanctions and Warming Bilateral Ties

Following Trump’s surprise May announcement pledging to lift Syria sanctions, he signed an executive order on June 30 removing the sanctions and directing the secretary of state to evaluate suspending congressionally-mandated Caesar sanctions. Trump’s sanctions decision prompted the European Union to follow suit.

More significantly, the U.S. decision paved the way for Gulf countries to begin investing in Syria, as they had previously been fearful of running afoul of international sanctions. In late May, a Qatar-led consortium announced a $7 billion investment in Syria’s energy sector. Saudi Arabia and Qatar also announced they would jointly fund Syria’s state salaries. The UAE signed an $800 million agreement to develop Syria’s Tartus port. Additional Gulf deals to rebuild transportation and infrastructure are also in the works.

While in Riyadh, President Trump met with Ahmed al-Sharaa, Syria’s transitional president. Trump’s historic meeting resonated across the region as a strong signal of U.S. support for Sharaa, despite his jihadist past. The interaction launched a normalization process that includes regular meetings with U.S. envoy Tom Barrack and prominent members of Congress, and even efforts to broker normalization with Israel. In July, Hay’at Tahrir al-Sham—Sharaa’s militia—was removed from the United States’ list of foreign terrorist organizations.

Trump administration support for Syria’s transition could have an outsized impact. Sitting at the heart of the Middle East, Syria’s transition will exert enormous influence on the region’s trajectory. By sparking Gulf investment in Syria’s beleaguered economy, the U.S. move has already facilitated the country’s transition process. While the country is far from stabilized and has witnessed worrying episodes of sectarian violence, enduring U.S. sanctions would have made Syria’s difficult transition even more precarious. Yet continued U.S. attention to Syria, including encouraging Sharaa to broaden participation in Syria’s governance, will be critical to avert the country’s descent back into conflict.

Broad Support for Netanyahu Government’s Policies on Gaza

Since taking office, President Trump has largely offered unquestioning support for the Netanyahu government’s policies on Gaza, including its restrictions on humanitarian aid. Even after Israel’s controversial strike on Hamas targets in Doha, Trump’s expression of concern over the attack was soon followed by Secretary of State Rubio’s trip to Israel, where he once again underscored strong support for Israel’s Gaza policies. While Trump occasionally calls for ending the conflict in Gaza, he has yet to exercise the leverage necessary to do so. On the contrary, glimpses of Trump’s Gaza vision suggest alignment with more extreme Israeli positions on the disputed territory. During his February 4 meeting with Netanyahu, President Trump proposed to displace Palestinians from Gaza and create a “riviera in the Middle East.” Backtracking from this proposal, President Trump presented 21-point plan for Gaza post-conflict security and governance that envisions gradual Israeli withdrawal, an Arab-Muslim security force, and elements of Palestinian governance. Whether the plan comes to fruition remains very much in question.

Similarly, regarding Israel’s controversial policies of restricting humanitarian aid into Gaza, the Trump administration has followed Netanyahu’s lead. Israel’s full blockade of Gaza from March 2 through mid-May sparked a dramatic deterioration in humanitarian conditions. In May, the Gaza Humanitarian Foundation (GHF), an Israeli- and U.S.-backed alternative to the UN aid distribution system in Gaza, began operations at four distribution sites. The controversial GHF has proven woefully inadequate to address growing hunger and provoked criticism for its unwillingness to abide by humanitarian principles.

Taken together, these policies reflect two intertwined elements of the Trump administration’s approach to Gaza: a deference to Prime Minister Netanyahu’s preferences and a deprioritization of humanitarian needs. The administration has not pushed back on the Israeli government’s plans to occupy Gaza City and forcibly evacuate Palestinians into a smaller area of Gaza. Instead, President Trump has noted it is “pretty much up to Israel” if it wants to occupy Gaza. He subsequently posted on social media that the only way to get hostages out of Gaza is when Hamas is “confronted and destroyed,” seemingly offering tacit support for Israel’s expanding operations. Meanwhile, the Trump administration’s complacent approach to Gaza’s worsening humanitarian situation—marked by a formal declaration of famine in parts of Gaza—underscores the devastating impact of its acquiescence to the Israeli government’s refusal to provide adequate aid to the besieged territory.

Regional Responses: Israel and Saudi Arabia

Regional reactions to these Trump administration policies have varied widely. They can best be captured by unpacking how Israel and Saudi Arabia—each with strong ties to the United States—have responded. Not surprisingly, their reactions differ significantly in all three cases. Their responses also reflect the growing disparity between these two regional powers as they pursue widely differing strategies for how to shape the Middle East’s emerging order.

For Israel, October 7 marked a watershed moment that reinforced the state’s resolve to never again allow the country to be vulnerable to attack by Iran or any of its proxies. It has signaled a willingness to use force whenever and wherever threats arise. This determination has translated into ever-bolder military interventions across the region that have redrawn the Middle East’s balance of power. Yet, Israel has not translated these military gains into enduring strategic wins. For Saudi Arabia—the Arab world’s current center of gravity—the imperative for economic diversification has fueled a drive to de-escalate tensions in the region, a push for post-conflict stabilization in the Levant, and aspirations to build out commercial and trade ties across the Middle East and beyond. This existential need for regional stability has led to bold diplomatic initiatives, including rapprochement with Iran and warming ties with Turkey. As with Israel, however, whether and how Saudi Arabia translates its expanding leverage into lasting strategic gains remains to be seen.

U.S. Strikes on Iranian Nuclear Facilities

Israel was strongly supportive of the U.S. strikes on Iranian nuclear facilities. For decades and across multiple U.S. administrations, Prime Minister Netanyahu sought U.S. support for and participation in strikes on Iranian nuclear facilities. As such, President Trump’s decision to order strikes on Iran marked a major victory for Netanyahu.

Going forward, Netanyahu will look to maintain U.S. support, especially if Iran begins to rebuild its ballistic missile arsenal or restart enrichment. Israel has made clear that it will strike Iran again—ideally with U.S. support—in either scenario. Absent a clear U.S. “red light” opposing further Israeli military intervention in Iran, possibly paired with a U.S. “carrot” on other issues of interest to Israel, Israel could seek to derail potential U.S. negotiation efforts with Iran.

By contrast, Saudi Arabia—worried about uncontrolled conflict escalation—responded to the U.S. strikes on Iran with “deep concern.” The kingdom worked closely with its Gulf allies to find an off-ramp for the conflict rather than encouraging the United States and Israel to pursue regime change in Iranonce the favored position of the Arab Gulf. This about-face on Iran embodies broader shifts in the regional order where Gulf Arabs now believe the Islamic Republic is a challenge to be managed (and possibly integrated into the region), rather than eliminated. Increasingly, the Gulf views Israel, not Iran, as the primary threat to regional stability.

Going forward, Riyadh will push hard for a diplomatic resolution to Iran’s conflict with the United States and Israel. While Saudi Arabia likely is heartened by Iran’s weakened position, it views with alarm the prospect of deepening interstate conflict between Israel and Iran. It will remain critical of any further Israeli military action directed at Iran and will likely encourage Washington to restrain its Israeli ally and instead restart bilateral negotiations with Iran.

Lifting Syria Sanctions and Warming Bilateral Ties

Israel responded with alarm to both the U.S. decision to lift sanctions on Syria and President Trump’s meeting with Ahmed al-Sharaa. Prime Minister Netanyahu reportedly asked President Trump not to lift Syria sanctions in advance of Trump’s trip to the region. Moreover, since the fall of the Assad regime in December 2024, Israel has been wary of the former jihadist now in control in Damascus. Seeking to keep the Sharaa government weak and off balance, Israel has repeatedly resorted to military strikes, including in the capital, Damascus. It has also deployed troops in southern Syria, occupying an increasing area beyond the demilitarized zone separating the two countries.

Going forward, Israel will remain wary of the Sharaa government and will likely continue to apply military pressure on Syria, including an expanded occupation of southern Syria and occasional air strikes. At the same time, the Israeli government has demonstrated a willingness to ease up on its interventions when the Trump administration signals its displeasure. Yet, Israel’s openness to the Trump administration’s efforts to broker a nonaggression pact between Israel and Syria remains an open question. Instead, Syria could become a locus of regional power competition between Israel and Turkey as both seek to exert their influence over Syria’s trajectory.

Since the fall of Assad in December 2024, Saudi Arabia has lobbied hard for the United States to lift Syria sanctions, citing them as a key obstacle to the country’s reconstruction. Trump’s decision to lift sanctions and meet with Sharaa—while in Riyadh—undoubtedly was timed to please his Saudi hosts and likely came at the direct suggestion of Muhammad Bin Salman (MBS), the Saudi crown prince. For MBS, the U.S. decision stood as an important victory emerging from Trump’s trip.

Going forward, Saudi Arabia will likely encourage the United States to continue along its path toward normalization with Syria. It may push for the repeal of the Caesar sanctions, which must be undertaken by Congress. Riyadh may also press the United States to rein in Israel, should it continue with aggressive military action in Syria.

Policies Toward Gaza and Humanitarian Aid Distribution

Netanyahu is undoubtedly pleased with the tacit, if not outright, support the Trump administration has provided for its military campaign in Gaza. Despite widening domestic and international criticism of Israel’s approach, the prime minister has not wavered in his expanding occupation of Gaza in the absence of any U.S. pressure. Indeed, the prime minister appears to bask in U.S. support, with no hint of a shift in policy.

Going forward, Netanyahu can be expected to continue along the same trajectory in Gaza, especially since a dramatic shift in U.S. policy is not in the offing. On the contrary, as the international outcry against Israel’s actions in Gaza grows and with an increasing number of U.S. allies moving to declare a Palestinian state, Israel is likely to entrench its position further, bolstered by the prospect of continued U.S. support. Indeed, the Trump administration announced its decision to deny visas to the Palestinian Authority leadership ahead of the UN General Assembly, seemingly in response to mounting calls for declaring a Palestinian state.

Saudi Arabia has been among the most vocal critics of Trump’s February 4 proposal on Gaza. Riyadh immediately rejected Trump’s proposal and reiterated its refusal to normalize relations with Israel in the absence of significant progress toward the creation of a Palestinian state. The kingdom has also strongly criticized Israel for the lack of adequate aid flowing into Gaza. Following the August 22 famine declaration, Saudi Arabia, while not calling out the United States, faulted the Israeli occupation as the cause of the “humanitarian catastrophe” in Gaza.

Going forward, Saudi Arabia will continue to press hard on Gaza, demanding a permanent ceasefire, unfettered humanitarian access, and significant movement toward the establishment of a Palestinian state. Its leading role in pushing for a two-state solution at the 80th UN General Assembly stands as its most prominent effort in this regard. The kingdom will likely continue its behind-the-scenes lobbying of the United States to pressure Israel to relent on these demands, holding out on any progress toward normalization with Israel in the absence of movement on these issues.

Recommendations for the United States

The Trump administration stands before a historic opportunity to help usher the Middle East into a new era of stability and prosperity. Its engagement in the Middle East is shaping the contours of the emerging regional order—whether by default or design. Specifically, its decisions on Iran, Syria, and Gaza all touch on core challenges in the region and hold the potential to move each in a positive direction. Yet, peril and deepening conflict stand on the flip side of each opportunity. The administration could squander this opportunity if it fails to exploit openings for peace and de-escalation, disregards the negative consequences of untethered military action, or falls into the false lull of inaction.

On Iran, the administration should capitalize on Iran’s weakened position to negotiate a deal. It should leverage the threat of implementing snapback sanctions, additional U.S. sanctions, and the credible threat of military force to compel Iran to the table. Ultimately, a deal could emerge that constrains both Iran’s nuclear and regional ambitions in exchange for broad sanctions relief and a potential path for its wider integration into the region.

On Syria, the administration should calibrate its continued support for the Sharaa government with measures that instill buy-in from Syria’s minorities and their integration into a decentralized system of governance. It should work closely with Gulf Arab allies to ensure that Gulf-funded stabilization efforts in Syria address key challenges around security, governance, and economic growth.

On Gaza, the administration should reject plans that envision further mass displacement of Palestinians in Gaza, a move that would enflame the region and jeopardize future cooperation with Arab allies. Instead, it should exercise more leverage on Israel to allow adequate levels of humanitarian aid while also pushing for a permanent ceasefire that results in the release of all remaining hostages and movement toward sustainable security and governance arrangements in Gaza.

South Korea’s Response to U.S. Demands

Minimize Risk, Maximize Reward

Victor Cha

Introduction: Playing Catch-Up

For the Republic of Korea (ROK, or South Korea), the recent paradigm shift in U.S. policy and alliance relations has been magnified due to an uncanny confluence between South Korea’s domestic political crisis and the speed and force with which President Donald Trump has organized the U.S. government to implement his wishes. Unlike other U.S. allies and partners, however, South Korean leaders have contended with these changes not by resisting, but by embracing them—making agreements that appease their ally while laying the groundwork for new areas of cooperation. This “let’s make a deal” attitude has prevailed for two reasons. First, allies in Asia, including Japan and South Korea, still operate in a bilateral hub-and-spokes context with the United States, rather than as a group like the European Union, thereby bequeathing all the leverage to Washington. Second, Trump’s “America First” policies have shifted the traditional custodial burden of alliance management from the patron ally to the partner. The United States would do well to share that burden once again. Until then, alliance managers must navigate the torrent of untraditional policies, minimizing risk to the alliance while maximizing any potential reward.

The ROK is a dependable ally of the United States. South Korea has fought with the United States in every war since the Korean War, including Vietnam, Iraq, Afghanistan, and Ukraine. In Ukraine, South Korea has reportedly supplied more ammunition to Kyiv (via Poland and the United States) than all European nations combined. The two allies negotiated one of the first “high-quality” free trade agreements (FTAs) in 2006 that addressed not just tariffs, but also nontariff barriers and labor and environmental standards. During the Biden and Trump administrations, the alliance opened new horizons of cooperation, with South Korea becoming the largest source of greenfield foreign direct investment (FDI) in the United States in the clean energy and high-technology sectors.

A unique set of circumstances, however, left South Korea ill-prepared to manage the onset of the new U.S. administration in January 2025. President Yoon Suk Yeol’s declaration of martial law, his subsequent impeachment, and the snap election of President Lee Jae Myung effectively left South Korea in political stasis for the first half of 2025 and, therefore, six months behind all other U.S. allies as President Trump began his second term with a slew of trade actions and executive orders. Even after Lee took office, the two leaders missed opportunities to meet in the summer of 2025 at the G7 summit and NATO leaders summit, leaving Seoul without the direct leader-to-leader interface enjoyed by other similarly affected allies deemed critical to negotiating relief from U.S. tariffs.

▲ Table 1: South Korea FDI Commitments to the United States, 2017–2025. Source: The White House “Joint Press Release by the United States of America and the Republic of Korea,” press statement November 8, 2017; Antony J. Blinken, “Secretary Antony J. Blinken and Republic of Korea Foreign Minister Cho Tae-yul at a Press Availability,” U.S. Department of State, remarks, January 6, 2025; and “Korea agrees to 15% reciprocal tariffs, USD 350B investment with US,” Korea.net, July 31, 2025.

The Trump Administration’s Policies: Paradigm Shift

Two policies define the paradigmatic shift in the alliance. The first relates to Trump’s desire to reduce the U.S. military force presence on the peninsula. Currently, 28,500 U.S. ground troops in South Korea provide the trip wire deterrent at the heart of the U.S.-ROK mutual defense treaty, as well as the nuclear extended deterrence commitment. In May 2025, news reports surfaced of an administration plan to reduce the number of ground troops in South Korea, with the initial removal of one rotational brigade from the peninsula. The Pentagon denied the story, but there are a number of reasons to believe its veracity. First, as highlighted in a CSIS database, Trump has long questioned the need for U.S. troops abroad in Germany and South Korea, which he sees as expensive for the United States and as encouraging free riding by allies. Second, senior Pentagon officials prioritize deterrence and defense against China in the Taiwan Strait and in the first island chain and require South Korea to carry the burden of deterrence against North Korea.

The second paradigmatic shift in U.S. policy for South Korea relates to tariffs. Trump’s policies have thrust the trade relationship into an entirely new world. U.S.–South Korea bilateral trade (goods and services) was worth $239.6 billion in 2024, making the United States South Korea’s second-largest export market and South Korea the United States’ sixth-largest trade partner. Despite a successful FTA that took bilateral tariff rates to nearly zero, Trump targeted South Korea’s $66 billion merchandise trade surplus as validation that allies cheat the United States on trade while free riding off U.S. security guarantees. The April Liberation Day reciprocal tariff of 25 percent against South Korea took no account of the pre-existing FTA; moreover, the impact on South Korea went far beyond the bilateral tariff. The Section 232 25 percent tariffs on steel and aluminum, the 25 percent tariffs on automobiles and auto parts, and the 25 percent tariffs on Mexico (from where South Korean plants export to the United States) all had a disproportionate effect on the country. The impact was immediate: South Korea’s car exports to the United States fell by 27 percent in May year on year, with overall exports to the United States falling by 8.1 percent year on year. While there are other issues in the alliance, these troop and tariff issues are of a scale never before experienced in the alliance, and Seoul, mired in its own political crisis, was unprepared to respond.

Responses from South Korea: Let’s Make a Deal

If the initial reaction by European and Canadian allies to Trump’s actions was outrage and resistance, South Korea’s response could be characterized as “let’s make a deal.” On the reciprocal tariffs, South Korea did not criticize its ally; it did not call out the United States for unduly violating the existing FTA, and it did not retaliate by raising its own tariff rates to 15 or 25 percent (from 0 percent). Instead, Seoul reached out proactively to identify the makings of a deal that would lower U.S. tariffs. From February to June 2025, South Korean senior trade officials, and even the national security adviser and foreign minister, shuttled to Washington almost weekly, even following Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Grier to Scotland to meet for late-night additional negotiations. There was arguably no U.S. trading partner that tried harder to make a deal. This resulted in a framework agreement announced by President Trump on July 30 that reduced the reciprocal tariff rate to 15 percent and lowered the sectoral tariff for automobiles and auto parts to 15 percent. South Korea promised a $350 billion investment fund for U.S.-owned companies—including $150 billion in shipbuilding—and an additional $100 billion in energy purchases from U.S. sources. The magnitude of these commitments spoke to South Korea’s willingness to make a deal to satiate its ally; $350 billion is 72 percent of the South Korean government’s budget this year, and more than 18 percent of South Korea’s GDP in 2024.

At the same time, Seoul has taken advantage of the Trump administration’s willingness to operate outside regular policy conventions to seek new opportunities for alliance cooperation that serve ROK interests. Most notably, the $350 billion investment package includes $150 billion for South Korean investment in U.S. shipbuilding. The commercial potential for joint ventures in shipbuilding, ROK-made components for U.S. ships, and maintenance, repair, and overhaul (MRO) have all been areas of commercial interest and strategic cooperation for South Korea, given the strength of its shipbuilding industry and the United States’ shipbuilding gap with China.

On security issues, the Lee government has avoided disagreement with Trump, instead identifying positive-sum solutions that advance U.S. and South Korean goals. The South Korean government maintained message discipline with the Pentagon’s denial of the veracity of the troop withdrawal reports. In return, when Trump was asked about the issue during the August 2025 summit meeting, he deflected the question to talk instead about North Korea. President Lee has also recognized the U.S. desire to see more South Korean alignment on security issues vis-à-vis China. In a public speech at CSIS following his meetings at the White House, Lee made a clear statement of Seoul’s position that aligned with U.S. interests, stating that although China and South Korea share “inevitable ties” because of geographic proximity, South Korea “cannot act or make decisions that go against America’s basic policy stance.” Furthermore, he said it’s “no longer possible” for South Korea to hedge between economic interests with China and security interests with the United States.

This position reflects South Korea’s understanding of its responsibility to minimize damage to alliance equities in the face of an “America First” posture that effectively throws custodial responsibility into Seoul’s hands.

Yet South Korea has also been able to use the unconventionality of the Trump administration to advance its own agenda. Progressive ROK governments like Lee’s traditionally have sought to improve relations with North Korea through inter-Korean engagement and reconciliation. In a wide-ranging and unusually long Oval Office press availability, Lee drew the U.S. president into a discussion of North Korea by appealing to two well-known preoccupations of the president: the Nobel Peace Prize and real estate. Lee called the president a “maker of peace” and asked him to build peace on the Korean Peninsula. He also called on the president to build a Trump Tower and play golf in North Korea and said he believes Kim Jong-un “will be waiting for you.” These entreaties prompted Trump to launch into long statements about his friendship with the North Korean leader and his willingness to reengage, committing to do so by the end of 2025. If Lee’s purpose was to send a public message to Kim of the U.S.-ROK desire to reengage with the North, this was successfully accomplished at the summit—not necessarily by tricking the U.S. president into such statements, but by once again capitalizing on Trump’s unconventionality to identify positive-sum solutions.

The natural question that emerges is why the ROK has exhibited such a cooperative, if not submissive, attitude to nontraditional, paradigm-shifting U.S. policy demands. For one, South Korea’s geopolitical position affords it little leeway. Seoul faces a conventional and nuclear threat across its border in North Korea, as well as threats from China. The revival of deep Russia–North Korea ties because of the war in Ukraine amplifies the threat. In such an environment, South Korea can ill afford disruptive relations with its primary security patron, no matter how much that disruptiveness emanates from Washington. This in part explains the immediate desire to negotiate a solution that appeases U.S. demands.

Second, the legacy of the hub-and-spokes alliance system created by the United States in the postwar period still impacts the way states in the region behave. Allies like Japan and South Korea customarily operate in a bilateral context when it comes to alliance issues, rather than multilaterally. For example, even though Seoul and Tokyo both faced reciprocal tariffs from Trump, their initial instinct was not to collude in order to gain leverage vis-à-vis the common ally; rather, each chose to work the issues alone, thereby giving the bargaining leverage to the United States. Finally, “America First” policies put demands on allies that push past normal alliance conventions. This effectively puts the burden of responsibility for maintaining the alliance’s well-being in the hands of the U.S. partner, which must respond in measured rather than retaliatory ways if it wants to preserve the alliance’s equities for the future.

Recommendations for the United States

With five years left in the new Lee government and over three years remaining in Trump’s second term, there are opportunities to preserve and advance the alliance despite the complexities created by U.S. demands and a worsening external security environment.

1. Create a joint vision document. The August 2025 summit between Trump and Lee, while good on optics, lacked a written joint statement or fact sheet. This is unusual given that the first meeting between heads of state usually affords a proper opportunity to agree on a document that will guide the alliance for the remaining years of the two presidents. Ironically, the agreement was held up not by security issues—where the two sides found mutually acceptable language—but on the details of the investment commitments made by South Korea on issues like profit-sharing and terms of investment. It is imperative to reach compromises on these issues that benefit both allies; otherwise, they will impede more important agreements on strategic goals.

2. Focus on alliance modernization. Any changes in U.S. force posture on the Korean Peninsula must be executed as part of a broader package of alliance modernization initiatives rather than as discrete and unilateral actions by the United States. While such moves may be part of a broader Pentagon objective of enhancing regional capabilities to deter and defend against contingencies with China over Taiwan, they will come at the expense of weakened deterrence on the Korean Peninsula. South Korea will sense acute abandonment, and North Korea will see potential opportunity in weakened U.S. security commitments. Instead, any changes in force posture should be made in conjunction with enhancements in U.S. air and naval presence; enhanced South Korean intelligence, surveillance, and reconnaissance (ISR) and conventional capabilities; and other actions that ensure stable deterrence. The presentation of such a package to the public is as important as the substance for the purpose of maintaining deterrence.

3. Approach South Korean contingency planning with caution. South Korea has not exhibited alternative contingency planning in its dealings with the United States thus far. One might expect that as Washington raises abandonment fears in Seoul with talk of troop withdrawals or tariffs, South Korea might hedge its bets by drawing closer to alternative partners like China. Instead, as noted above, the Lee government has committed to doubling down on relations with the United States. The one area where the United States should be wary of South Korean interests is in renegotiating the bilateral civil nuclear agreement. Seoul has expressed interest in revisiting the agreement, which is now 10 years old, most likely as it pertains to reprocessing capability that was banned in previous agreements. While there may be several arguments for reprocessing proffered by South Korea (including storage limitations for spent fuel), the objective of acquiring a virtual nuclear capability with fissile material stockpiles (similar to Japan) may be more pronounced given uncertainties surrounding the alliance.

4. Better communicate and align policies. The alliance suffered a major and ill-timed embarrassment when the Trump administration’s immigration and investment policies came into direct conflict in the September 2025 Immigration and Customs Enforcement raid of a Hyundai-LG battery plant in Georgia. While the United States must enforce any violations of its visa policies by foreign workers, the detainment of 317 Korean workers led to the suspension of South Korean investments and undercuts President Trump’s broader objective of securing over $500 billion in FDI to bring manufacturing back to the United States and hire American workers. While the immediate task for the allies from the Hyundai raid is to negotiate a visa infrastructure appropriate for the volume of South Korean investment and business travel to the United States, the broader one is to align policies that avoid undercutting President Trump’s major objectives with his allies.

5. Foster U.S.-Japan-Korea trilateral cooperation. There is an opportunity to advance trilateral cooperation among the three allies that has been presented by the Lee government’s willingness to defy the traditional progressive mandate for more antagonistic relations with its former colonizer. Lee signaled this early in his election campaign and followed through with his first foreign visit to Tokyo in August 2025 to meet Prime Minister Ishiba Shigeru before coming to Washington. The Trump administration also supports trilateral alliance security and intelligence coordination, which it believes was hatched in earnest during Trump’s first term in office and then expanded during Biden’s term. Given the difficult external environment, the growing ties between China, Russia, Iran, and North Korea, and uncertainties about the U.S. force posture changes, doubling down on trilateral relations seems more than appropriate.

6. Pursue new frontiers of cooperation. Trump’s tariff pressures will certainly complicate alliance relations, but his nontraditional foreign policy approaches open new areas of cooperation for the alliance. As noted above, shipbuilding is an area of real mutual gains for the two allies, and Trump would not necessarily be constrained by long-standing guidelines limiting the U.S. partnerships with foreign shipbuilders. The allies also share a mutual interest in reducing South Korea’s dependence on politically unstable supplies of energy from Russia and the Middle East. The commitments made during the August 2025 summit for South Korean purchases of U.S. energy (specifically liquefied natural gas) constitute important steps in this direction, provided the details can be successfully negotiated between the two sides.

Southeast Asia Navigates Trump’s Return

Quick Deals, Lasting Dread

Gregory B. Poling

Introduction

The policies of the second Trump administration have been worrying and disruptive for most partners across Southeast Asia, as is true around the world. Regional policymakers, many of whom thought they knew what to expect from Trump’s return to the White House and believed themselves well-equipped to manage it, have been shaken by the scale and unpredictability of changes in U.S. foreign policy. Each regional capital is grappling with the implications of a United States that is at best unattached and at worst actively hostile to the postwar international order. And that order—particularly its economic pillars—has real cache in Southeast Asia, where it provided the stability that has driven rapid economic development.

The risks and, in rarer cases, opportunities of a radically changed U.S. approach to geopolitics and economics vary from country to country. Their responses will vary in turn. The Philippines, for instance, has been mostly reassured of U.S. commitment to a bilateral alliance—and even to key pillars of their economic partnership. Other governments are more anxious about whether the United States will remain a regional security provider. And many regional elites privately express a sense of betrayal at the United States’ disregard for partnerships built over many years.

A clear pattern is emerging, however, in Southeast Asian responses to U.S. economic pressure, with most states seeking to mitigate both the short- and long-term risks of partnering with the United States. Governments have rushed to secure deals reducing the “reciprocal” tariffs facing their exports to the United States, while seeking new partnerships to hedge against future U.S. economic pressure and unpredictability.

Trump Administration Policies in Southeast Asia

Every government in Southeast Asia understood that a second Trump administration would alter U.S. foreign assistance programs, seek to address trade imbalances, and show less commitment to international rules and institutions. But they also thought they would be better able to navigate those shifts. None of them were prepared for the scale of changes in U.S. policy or the speed at which they took place.

On the trade front, Southeast Asian states risked being among the hardest hit by the reciprocal tariffs the White House announced in April. After Lesotho—which trades almost nothing with the United States—the highest threatened tariff rates (between 46 and 49 percent) were reserved for Cambodia, Laos, Myanmar, and Vietnam. About 40 percent of Cambodia’s exports and roughly a quarter of Vietnam’s go to the United States, making the tariff threat a national emergency for those two states. Thailand and Indonesia were also threatened with painfully high rates of 36 and 32 percent, respectively, followed by Malaysia and Brunei at 24 percent each. Philippine goods initially received a 17 percent tariff rate—which, while frustrating to Manila, could also have given Philippine exports a competitive edge over higher-tariffed neighbors. Singapore, as the only country in Southeast Asia to run a trade deficit with the United States, received only the new baseline 10 percent tariff rate.

Along with being targeted by the administration’s trade war, Southeast Asia has been hit especially hard by cuts to foreign assistance and other U.S. government programs. The U.S Agency for International Development (USAID) was active throughout the region, and the unexpected cancellation of most of its grants left Southeast Asian citizens without vital services and local civil society groups unable to cope. Some of the worst stories came from the Thailand-Myanmar border, where hospitals and other services for vulnerable refugees who had fled civil war disappeared almost overnight—resulting in entirely preventable deaths. Later, when a major earthquake struck near Mandalay, Myanmar’s second-largest city, the United States failed to deliver any assistance because of USAID’s closure. Russian and Chinese first responders rushed in to help, while the United States was nowhere to be found.

The United States also halted most work addressing legacies of war in Cambodia, Laos, and Vietnam—including the clearance of unexploded ordnance and dioxin (infamously known as Agent Orange) left behind by the U.S. military. China eagerly offered to step in to fund those efforts in Cambodia, compelling Washington to reverse course. Then there was the closure of Voice of America and Radio Free Asia services across the region, depriving citizens in mainland Southeast Asia of honest news about both their own governments and those of U.S. competitors like China and Russia. The Lowy Institute reported that the Voice of America had been the most popular foreign media outlet in the region; one major beneficiary when it went silent was Russia’s Sputnik, which had previously been a distant second.

The tariffs and radical shifts to U.S. government programs have left Southeast Asian states with no clear idea of what the United States will do next. That sense has been amplified by U.S. policy outside the region: threats of abandonment toward Ukraine and NATO, pressure on Northeast Asian allies and Taiwan, abandonment of certain international organizations and treaties, and waffling between competitive and cooperative approaches to China and Russia.

A notable exception on this front is the Philippines. The country has been affected by cuts to U.S. development assistance and the destabilizing effects of a global trade war (if far less than many others), but Washington has made a considerable effort to reassure Manila of its commitment to the U.S.-Philippines alliance, including a promise to defend Filipinos in the case of Chinese aggression in the South China Sea. A number of factors are probably at play here. The Philippines and the United States face a shared threat in the form of China; as a developing country, however, the Philippines defies the president’s characterization of most allies as “free-riders.” It has a relatively small trade surplus with the United States, while still being an important partner in fields like electronics and semiconductor manufacturing. And, of course, President Trump has repeatedly expressed a personal affinity for President Ferdinand “Bongbong” Marcos Jr., his family, and the Philippines overall.

Uniquely among U.S. treaty allies, the Philippines has faced no public demands to increase defense spending or to clarify its intentions in the case of a Taiwan crisis. President Marcos received the first Oval Office meeting of any Southeast Asian head of state, during which Trump was effusive in his praise. Secretary of State Marco Rubio and Secretary of Defense Pete Hegseth had earlier made sure their Philippine counterparts were their first meetings among Southeast Asian officials, and Hegseth made the Philippines the site of his first visit to Asia. In all of these meetings, the secretaries reiterated that the U.S.-Philippines Mutual Defense Treaty extends to the South China Sea.

The United States has even put some of its money where its mouth is. In April, the Philippines joined Taiwan and Ukraine as the first partners to have their foreign military financing ($336 million for the Philippines) unfrozen. And in July, the State Department announced $60 million for the Philippines in the first new overseas development assistance awarded to any country by the administration. Of that new assistance, $15 million will go toward the Luzon Economic Corridor, the Biden administration’s marquee multilateral economic initiative in the Philippines, which the Trump administration continues to support. This has left the Philippine government less anxious than its neighbors about short-term instability emanating from the White House, although Manila is still seeking to diversify its economic partnerships in the long term.

Regional Responses

Outside of the Philippines, Southeast Asian government responses to the Trump administration have been driven primarily by the trade war. Vietnam is perhaps the best case study in how shocking the April tariff announcement was to regional governments. Vietnam was aware that its large bilateral trade surplus with the United States would cause tensions; it already had during Trump’s first term, and the surplus had grown considerably in the years since. But Vietnamese leaders thought they had a good rapport with Trump and plenty of options to address his concerns. They also had broad support from lawmakers, officials, and policy elites on both sides of the aisle in Washington who viewed Hanoi as an important partner in the strategic competition with China. The Vietnamese public was so convinced that Trump’s return would be good for the relationship—not least because they assumed he would be tough on China—that Vietnamese citizens said they would vote for him over Kamala Harris by margins of up to four to one if they could. The Vietnamese public and elites alike were, therefore, left feeling stunned and betrayed on “Liberation Day,” when tariffs were declared. And while Hanoi was quick to find its footing and pursue negotiations, the sense of betrayal will be lasting.

Shortly after the initial tariff rates were announced, the finance ministers of the Association of Southeast Asian Nations (ASEAN) released a joint statement vowing to pursue a concerted response and avoid any retaliation. Malaysia, as the 2025 chair of ASEAN, continued to give lip service to the need for a unified response from the grouping. But in practice, all the Southeast Asian governments, including Malaysia, prioritized bilateral negotiations with the United States to try and secure the best deal for themselves. That is because the major exporters in the region—Cambodia, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam—compete for foreign investment in export manufacturing. Their greatest fear was thus being left behind if their neighbors secured a more favorable tariff rate. This anxiety was sharpened once Vietnam, which enjoyed a first-mover advantage in engaging the Trump administration early and often, secured an initial deal at the start of July 2025, reducing the topline tariff rate on its goods to 20 percent from 46 percent. Indonesia soon followed with a 19 percent tariff, tailed by the Philippines, Cambodia, Malaysia, and Thailand, all at that same rate. Only Laos and Myanmar have been left behind with tariff rates over 45 percent.

This short-term focus on securing the best bilateral deals possible to avoid major economic shocks is entirely expected from export-reliant developing economies. But the long-term response is shaping up to be more important, for both the region and the United States. The Trump administration’s trade war has proven a major accelerant to new or stalled economic negotiations between ASEAN states and other partners. The 10 member states have agreed to upgrade the ASEAN Trade in Goods Agreement, and in May they concluded negotiations with Beijing to upgrade the ASEAN-China Free Trade Area. Both will be signed in October after years of negotiations and will include new chapters on things such as digital trade and emerging technologies.

Potentially more important are Southeast Asian efforts to deepen trade and investment ties with two key blocs: Europe and the Gulf states. The region has realized that these provide the best options to enhance their own economic resilience by avoiding overreliance on either a predatory China or a mercurial United States. Indonesia and the Gulf Cooperation Council (GCC) held their second round of talks on a free trade agreement (FTA) in February 2025 and hope to conclude a deal by the end of the year. Malaysia also launched FTA negotiations with the GCC in May, while the United Arab Emirates and Manila intend to sign a comprehensive economic partnership agreement (CEPA) and the now annual ASEAN-GCC summit holds out hope for a future bloc-to-bloc agreement.

On the European front, the shared shock of U.S. tariffs has broken through several logjams. The European Union has discovered a new flexibility on the thorny issue of palm oil imports from Indonesia and Malaysia and their links to deforestation. As a result, Indonesia and the European Union signed a CEPA in September. Indonesia also intends to sign a CEPA with Canada this year and—in a development that should concern the United States—has concluded an FTA with the Russia-led Eurasian Economic Union. The Philippines and the European Union have restarted their long stalled FTA negotiations, holding a third round in June. And both Thailand and Malaysia have signed economic partnership agreements in 2025 with the European Free Trade Association states of Iceland, Liechtenstein, Norway, and Switzerland.

Most importantly, the uncertainties spawned by the U.S. trade war seem likely to bring new members into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which the United States walked away from at the start of the first Trump administration. This high-standard 12-member FTA is already the largest of its type. It includes sizeable economies like Australia, Canada, Japan, and Mexico, along with four Southeast Asian states, and it most recently expanded to include the United Kingdom. Indonesia formally bid for membership in September 2024, and South Korea and the Philippines have expressed renewed interest in joining. Powerful voices in Thailand are urging the same, which would bring in all of ASEAN except Cambodia, Laos, and Myanmar. Crucially, the European Union is exploring closer alignment with the CPTPP, though no formal talks have begun as of this writing. Should the European Union ever join the agreement, the resulting bloc could provide the ballast the global trading system badly needs amid challenges from both Washington and Beijing.

Recommendations for the United States

The one relationship in Southeast Asia that the United States has going for it right now is the alliance with the Philippines. That remains stable, and its value in U.S.-China strategic competition is vital. The most important thing the U.S. government can do to keep that on track is to follow through on commitments already made. The administration released the remainder of the foreign military financing the Philippines was allocated for FY 2024, but it will have to continue to deliver for years to come. The Biden and Marcos administrations signed a 10-year Security Sector Assistance Roadmap to aid in the long-term modernization of the Armed Forces of the Philippines; Congress must appropriate, and the executive must spend, funds to that end in the year ahead. Not only will that show the Philippines that the United States remains reliable, but it will help the Philippines share more of the burden of the alliance. The Philippine government also needs to be able to tell its citizens that a close partnership with the United States delivers economic benefits. And to that end, the United States will need to continue programs that incentivize private sector investment in projects like the Luzon Economic Corridor and the redevelopment of Subic Bay.

Beyond Manila, most regional capitals now see Washington as much as a source of risk as of opportunity. This is ironic, since the first Trump administration worked so hard to convince Southeast Asian partners to view overreliance on China in much the same way. Now the administration has severely undermined the United States’ latent advantage over China as the more trusted and influential partner for most of the region. Repairing that will not be easy, but it could start with steps to make U.S. policy more predictable: Staff up the (mostly vacant) positions for political appointees on Asia policy across the administration, articulate a clear China strategy, and stabilize overseas development assistance programs under the control of the State Department and other agencies like the Development Finance Corporation.

Victor Cha is president of the Geopolitics and Foreign Policy Department and Korea Chair at the Center for Strategic and International Studies (CSIS). He is also a distinguished university professor and professor of government at Georgetown University. From 2021 to 2025, he was appointed by the Biden administration to serve on the Defense Policy Board in an advisory role to the secretary of defense.

Nicholas Szechenyi is vice president of the Geopolitics and Foreign Policy Department and senior fellow with the Japan Chair at CSIS. He also served as deputy director of the Japan Chair from 2005 to 2022. His research interests include Japanese politics and foreign policy, U.S.-Japan relations, and U.S. strategy in the Indo-Pacific region.

Will Todman is the chief of staff of the Geopolitics and Foreign Policy Department and a senior fellow in the Middle East Program at CSIS. He was previously deputy director of the Middle East Program. He has over a decade of experience working on conflict, governance, and displacement in the Middle East, and has conducted field research in 12 countries across the region.

John Augé is the program manager for the Australia Chair at CSIS, where he manages initiatives related to U.S.-Australia relations, as well as security and climate change in the Indo-Pacific. Prior to joining CSIS, John worked at the White House Council on Environmental Quality, the U.S.-Pacific Institute for Rising Leaders at the Johns Hopkins School of Advanced International Studies, and the Tuvalu Climate Action Network.

Max Bergmann is the director of the Europe, Russia, and Eurasia Program and the Stuart Center in Euro-Atlantic and Northern European Studies at CSIS. Prior to joining CSIS he was a senior fellow at the Center for American Progress, where he focused on Europe, Russia, and U.S. security cooperation. From 2011 to 2017, he served in the U.S. Department of State in a number of different positions, including as a member of the secretary of state’s policy planning staff, where he focused on political-military affairs and nonproliferation; special assistant to the undersecretary for arms control and international security; speechwriter to then secretary of state John Kerry; and senior adviser to the assistant secretary of state for political-military affairs.

Charles Edel is a senior adviser and the inaugural Australia Chair at CSIS. He previously taught at the University of Sydney, where he was also a senior fellow at the United States Studies Centre. Prior to that, Dr. Edel was a professor of strategy and policy at the U.S. Naval War College and served on the U.S. secretary of state’s Policy Planning Staff from 2015 to 2017. In that role, he advised the secretary of state on political and security issues in the Indo-Pacific region. He has also been a global fellow at the Wilson Center and a Henry Luce scholar at Peking University’s Center for International and Strategic Studies, and he was awarded the Council on Foreign Relations International Affairs Fellowship.

Kristi Govella is senior adviser and Japan Chair at CSIS. She is also associate professor of Japanese politics and international relations at the University of Oxford. Dr. Govella was previously the inaugural director of the congressionally funded Center for Indo-Pacific Affairs at the University of Hawai’i at Mānoa, where she was also assistant professor of Asian studies from 2018 to 2024.

Christopher Hernández-Roy is a senior fellow and deputy director of the CSIS Americas Program. His work includes research into democratic backsliding, transnational organized crime, geopolitics, and economic and national security issues in the Western Hemisphere. Christopher held senior leadership positions at the Organization of American States (OAS), as the first director of the Department of Public Security and later the Department of Sustainable Democracy and Special Missions. He also served as a senior political adviser to two secretaries general, during which time he documented the grave human rights abuses of dictatorship in Venezuela and co-led the OAS’s efforts to bring a case to the International Criminal Court for possible crimes against humanity.

Jessie Hu was an intern with the CSIS Americas Program.

Oge Onubogu is a foreign policy leader with two decades of practical experience shaping engagement and policy on Africa and U.S.-Africa relations, including working with African governments, international organizations, civil society, academia, and the U.S. and African private sectors. Her career spans the public, private, and nonprofit sectors and has included designing and leading projects at the intersection of governance, development, and security. Onubogu recently served as director of the Africa Program at the Wilson Center, where she led scholarship-driven analysis and programs that centered African knowledge and agency in advancing actionable options to address some of the most critical issues facing Africa and U.S.-Africa relations.

Kathryn Paik is a deputy director and senior fellow with the Australia Chair at CSIS. Prior to joining CSIS, Kathryn served in the United States Marine Corps for over 23 years, most recently as the director for Southeast Asia and the Pacific on the National Security Council (NSC) (2021–2023), where she spearheaded numerous initiatives for the administration, including the creation of the first U.S. Pacific Partnership Strategy and the initial U.S.-Pacific Islands Forum Summit.

Gregory B. Poling directs the Southeast Asia Program and Asia Maritime Transparency Initiative at CSIS, where he is also a senior fellow. He is a leading expert on the South China Sea disputes and conducts research on U.S. alliances and partnerships, democratization and governance in Southeast Asia, and maritime security across the Indo-Pacific.

Juliana Rubio is an associate director with the Americas Program at CSIS. She joined the Americas Program in December 2021. She is passionate about international development and has over 10 years of experience working with nongovernmental organizations (NGOs), international governmental organizations, and the private sector. Before joining CSIS she was the senior program coordinator for the Andean region at the Aspen Network of Development Entrepreneurs (ANDE). She has also worked as a research and evaluation specialist at Fundación Capital in Colombia, conducted multiple consultancies for NGOs and social impact organizations, and worked for four years at the International Monetary Fund.

Sam Smith was an intern with the CSIS Americas Program.

Mona Yacoubian is director and senior adviser of the Middle East Program at CSIS. She has more than 30 years of experience working on the Middle East and North Africa, with a focus on conflict analysis, governance and stabilization challenges, and conflict prevention. She was previously vice president of the Middle East and North Africa Center at the U.S. Institute of Peace (USIP), where she managed field programming in Iraq, Libya, and Tunisia as well as Washington, D.C.–based staff.