On January 20, 2025, President Donald Trump began his second term. He has since issued over 50 directives that have already begun reshaping economic, ethical, and social landscapes. As we analyze these directives, it is important to understand their consequences through historical parallels and philosophical perspectives. To that end, I draw on the insights of David Ricardo and Alexis de Tocqueville to evaluate the implications of these edicts.
Economic Fallout: The Return of Protectionism
One of Trump’s most notable economic stances is his aggressive approach to tariffs. His objective is to increase tariffs to a reciprocal level or beyond. Such an approach is not unprecedented.
At the dawn of the 20th century, Britain faced a similar situation. The country then was divided between the farm-based, landed aristocracy and the emerging industrialist (capitalist) class. Food grains formed a large portion of the total expense of an average household. The industrialists (capitalists) sought to import food grains to make them more affordable, but this threatened the economic interests of the landed aristocracy, who successfully lobbied in the parliament for the Corn Laws. These laws imposed steep tariffs on grain imports, leading to rising food prices, declining quality – due to reduced competition – and widespread economic hardship. Rising protests and growing economic distress eventually led economist David Ricardo to campaign for their revocation. His efforts led to the repeal of the Corn Laws, paving the way for freer trade and economic relief.
As another separate case in point, the tumultuous year of 1930 saw the passing of the Smoot-Hawley Act in the United States. Passed during the Great Depression, this legislation imposed heavy tariffs on 20,000 imported goods, triggering retaliatory measures from other nations. As a result, U.S. exports fell by 61% between 1930 and 1933, devastating US industries reliant on international trade e.g. agriculture. The decline in trade further increased unemployment and deepened the Depression. The negative effects of the act led to a long-term shift in U.S. trade policy, culminating in the Reciprocal Trade Agreements Act of 1934, which reduced tariffs and promoted trade liberalization. History has repeatedly demonstrated the economic damage of protectionist policies, yet it seems this lesson is once again being overlooked.
That said, there may be a silver lining. If Trump’s aggressive tariff threats prompt broader negotiations that ultimately lower global tariffs, they could paradoxically contribute to a more open economic landscape. If that is his underlying strategy, it could be a bold and effective move.
Ethical Fallout: The Suspension of the Foreign Corrupt Practices Act
Another notable directive is the six-month suspension of the Foreign Corrupt Practices Act (FCPA), which bars American businesses from bribing foreign officials. Trump’s primary justification seems to be China’s Belt and Road Initiative, which has been securing key infrastructure worldwide, allegedly through bribery when needed. By pausing the FCPA, Trump aims to create a more level playing field for American businesses while also addressing concerns from lobbying groups that argue the law has been excessively restrictive.
While many justifiedly argue that the FCPA is overexpansively enforced, it remains a cornerstone of ethical business practices. If bribery becomes widespread, global commerce risks devolving into a system where corruption dictates business success, undermining fair competition, discouraging investment, eroding public trust, and fostering inefficiency and economic instability.
A more far-sighted approach would be for Trump to use this suspension as leverage to push other countries toward adopting similar anti-corruption laws. Notably, several nations, including India, have already tried to take steps in this direction, such as India’s 2011 bill aimed at preventing bribery of foreign officials. If this suspension serves as a catalyst for global reform rather than fueling further corruption, Trump’s move could become a strategic masterstroke.
Social Fallout: Tocqueville’s Warning and the Role of Institutions
Trump’s directives have also adopted a stance against diversity, inclusion, immigration, and foreign aid. This is where the insights of Alexis de Tocqueville, the former French foreign minister and intellectual, become especially relevant.
In his seminal work Democracy in America, Tocqueville warned of the “tyranny of the majority,” where populist policies could suppress minority rights. However, he also emphasized the judiciary’s role in safeguarding democracy. We see this playing out today, as the courts have already blocked Trump’s attempt to revoke birthright citizenship and are challenging the scope of presidential power.
Furthermore, institutional and organizational counterbalances are beginning to take shape. McKinsey, for example, has openly declared that it will not adhere to the US administration’s anti-diversity directives. Other corporations and non-governmental organizations are also pushing back. Tocqueville foresaw such resistance, emphasizing the vital role of civil society and independent institutions in safeguarding democratic principles.
When it comes to foreign aid, while criticisms of its misuse for political interference are valid, eliminating it entirely could have humanitarian consequences. Aid has been instrumental in saving millions of lives during pandemics, natural disasters, and crises like HIV/AIDS. Moreover, scaling back aid creates an opportunity for geopolitical rivals such as China to expand their influence in regions where the U.S. retreats. Indeed, a more balanced approach is needed that eliminates inefficiencies, corruption and long-term dependence among recipients on aid while preserving its critical impact.
The Path Forward: Adapting to a Changing Global Order
In this shifting landscape, countries like India and other forward-looking nations must adapt by enhancing their business environments. This requires tackling corruption, strengthening infrastructure, and improving ease of doing business to attract investment and trade partners aligned with a multilateral vision.
The world is more integrated than ever before, and even as global trade policies shift, opportunities remain for nations willing to reform and build resilient economic structures.
Conclusion: Hope in Posturing?
An idealist might argue that Trump’s radical policies are a form of strategic posturing. If his tariff threats compel other nations to lower their trade barriers, it could result in an overall reduction of protectionism. Similarly, if the suspension of the FCPA pressures other countries to adopt stronger anti-corruption measures, it could lead to a net positive outcome.
If this is indeed the case, Trump may be seen as a reformer rather than a dismantler.
While sharing these hopes, I must also emphasize that President Trump needs to reconsider his approach and engage in negotiations that do not inflict humiliation. The retaliation against humiliation can extend far beyond his presidency.
History offers countless lessons e.g. when the U.S. forcefully engineered the secession of Panama from Colombia in 1903, even a militarily and economically weak Colombia took 20 years to restore diplomatic ties. It was politically toxic for any Colombian leader to consider a rapprochement with USA.
Moreover, the nations and leaders being subjected to public insults today are neither weak nor unpopular—they are strong, influential, and, importantly, they are Friends and Allies. This pattern of humiliation must end.
Only time will reveal whether Trump’s directives are strategic moves or missteps. Until then, history provides valuable lessons—ones we would do well to acknowledge.
-Pavan Choudary