Donald Trump does not formally become president until Monday, but his second term got off to a momentous start this week. As was the case in 2016, he mounted the bully pulpit long before he entered the Oval Office, and day after day he has poured forth speech. The early results show the immense potential of his presidency, and the pitfalls that he needs to avoid.
The hostages-for-ceasefire agreement between Israel and Hamas is his most significant early accomplishment. Ironically, it is a bipartisan one. The tentative deal is similar to Joe Biden’s May 2024 proposal, which Biden and Trump agreed to pursue a few days after the election. Evidently, Trump’s post that “there will be ALL HELL TO PAY in the Middle East, and for those in charge,” if the hostages were not free by Monday, concentrated the negotiators’ minds more than Biden’s cajoling had. As State Department spokesman Matthew Miller admitted on Wednesday, the Trump team “has been absolutely critical in getting this deal over the line.”
This deal reveals how Trump’s future negotiations are likely to go. America’s Jacksonians, who form a major part of his political base, prefer short, sharp wars to protracted conflicts. He does not have much patience for drawn-out fighting or long negotiations either, and he is willing to twist arms to wrap things up speedily. Trump’s Middle East envoy, Steve Witkoff, told Benjamin Netanyahu, “Trump is serious about this deal, don’t ruin this.”
Trump may be serious about this deal, but it is not clear that Hamas is. Right after the news of the hostage deal broke, Hamas’s Khalil al-Hayya essentially promised to launch another October 7-style attack as soon as possible. Incoming national security adviser Mike Waltz said that if Hamas reneges, the United States will back Israel.
Trump has had more durable success closer to home. Since the election, Mexican president Claudia Sheinbaum won plaudits from the so-called Resistance for her verbal duels with the president-elect. For every proposal to rename the Gulf of Mexico the Gulf of America, she has fired back with plans to rename the entire continent “América Mexicana.”
But her bluster is far less impressive than the speed with which she is meeting Trump’s demands. After he threatened a 25 percent tariff if drug and immigration problems continue along the border, Mexico literally went gangbusters, seizing over a ton of fentanyl pills in a series of drug raids. Sheinbaum also announced a plan this week to prevent Chinese companies from circumventing U.S. tariffs and trade restrictions by shipping their goods through her country. The United States-Mexico-Canada Agreement is up for review next year, and she is clearly as eager to head off any major issues as she is to look like she is putting up a good fight.
The Europeans are beginning to rethink their defense spending too: At the beginning of the week, Poland’s defense minister endorsed Trump’s demand for NATO members to spend 5 percent of their GDPs on defense, which would more than double the current 2 percent target. New NATO secretary-general Mark Rutte followed up on Monday, telling the European Parliament that even if the final number drops to a little less than 4 percent, Europe may need to cut its lavish social spending to meet it.
Warsaw is already close to Trump’s new target, and Rutte’s job is to mediate between Washington and Europe, so they are his easiest converts. But Trump is already on his way to repeating his first-term successes in Europe. If he can end the Ukraine war without panicking the Europeans into cutting their own deals with Moscow, he might just stabilize Europe.
Wall Street, meanwhile, is salivating about another Trump term, and a booming economy will give him a stronger position for international negotiations. Goldman Sachs’s head, David Solomon, told investors this week that “there has been a meaningful shift in CEO confidence” because of Trump’s victory and that promised regulatory reform is freeing up capital for new deals. This bodes well for a president who keeps a close eye on the stock market.
Trump also wants to reduce American trade deficits, but his other economic successes are making that harder. Investor hopes and his talk about universal tariffs are driving up the price of the dollar, and thus the cost of U.S. exports, in international markets. Unless his team can square this circle fast, his campaign to reduce imports and sell more American goods abroad will falter.
Every president wants to rack up some early wins, which Trump already has. In two days, he will have a lot more tools at his disposal. He will need them: The international situation is dangerous, and he can only get so far on threats and promises.
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