[Corrected] Carpe Donald
The US, Mexico, Canada, Central America, China, Taiwan, and the BRICS.
***Our earlier email was sent with today’s first report missing. We’re sending it again and making it free for all readers.***
The five things you need to know today:
UNITED STATES. The president keeps his promise to be a day-one dictator.
MEXICO. CANADA. Trump may discover the leverage isn’t one-sided.
CENTRAL AMERICA. Attempts to counter Chinese influence could backfire.
CHINA. TAIWAN. The ground shifts beneath technology supply chains.
BRICS. Sudden shifts on aid cede influence to US competitors.
Get full access to all five daily briefings, weekly analyses, and private webinars. Upgrade today for the only daily intelligence briefing written by former diplomats, modelled on the US Presidential Daily Brief, and relied on by business leaders and investors in over 140 countries.
UNITED STATES. Vir trumphalis
The president keeps his promise to be a day-one dictator.
Donald Trump was sworn-in Monday, declaring in his inaugural address a "golden age" and signing 46 executive orders, memoranda and proclamations, including one to revoke 78 Biden-era policies and pardon 1,500 January 6 defendants.
INTELLIGENCE. Around 100 orders were originally promised but by any other standard the day was head-spinning. Issuing sweeping changes by decree, including via emergency legislation, Trump at least fulfilled a vow to be a “dictator on day one”. Republicans in Congress, used to being consulted on matters of law, cheered but many will privately be livid. His pardons, just hours after Joe Biden made several of his own, also smacked of imperial hubris.
FOR BUSINESS. Executive orders used to be common. FDR passed even more at the start of his second term in 1937. In this, Trump is returning to an older style of governing, mirroring especially William McKinley (1897-1901), whom he also renamed Alaska’s Mt Denali for Monday, and whose tariffs and annexations he claims to admire. McKinley’s term was cut short when assassinated in Buffalo. He never got to oversee the Panama Canal he helped negotiate.
Geopolitical Dispatch is brought to you by Geopolitical Strategy. We help businesses map, monitor and manage geopolitical risks with expert advice from former ambassadors, diplomats and intelligence officials. Interested in exploring how our scenario planning workshops, bespoke briefings, tailored risk assessments or ongoing advisory support can help your business?
MEXICO. CANADA. Tax Americana
Trump may discover the leverage isn’t one-sided.
Trump determined an invasion at the southern border Monday, assigning the military under emergency orders. The president also designated Mexican cartels as terrorist organisations and warned of potential tariff hikes for 1 February.
INTELLIGENCE. Trump is giving Mexico and Canada time to negotiate on borders and deficits. Yet coming alongside the Gulf of Mexico’s renaming, this is less a show of goodwill than an acknowledgment he doesn’t hold all the cards. Claudia Sheinbaum has an 80% approval rating and, unlike Trump, enormous constitutional latitude. Canada, like all Westminster systems, is an elective dictatorship. It can also expect a rally-round-the-flag effect if things get nasty.
FOR BUSINESS. With a narrow house majority and a rancorous senate, Trump will be constrained in any negotiations. As with his previous USMCA trade deal, he’ll likely get improved terms, but only enough to declare victory. The markets will help him. On relief that tariffs weren’t implemented on day 1, foreign stocks and currencies rallied (US markets were closed for the concurrent Martin Luther King holiday). He’ll seek to attribute this to his personal genius.
CENTRAL AMERICA. How to lose friends
Attempts to counter Chinese influence could backfire.
Panama’s president hit back Monday at Trump's inauguration vow to "take back" the canal. Parole for migrants fleeing Cuba, Nicaragua, Venezuela and Haiti was cancelled. Colombia declared a state of emergency along its border regions.
INTELLIGENCE. Besides planting a flag on Mars, Trump didn’t mention any other territorial conquests but did promise expansion in the main. Panama will have the most to worry about here, though it's just as likely Trump will settle for a renegotiation (or clarification) on two ports Hong Kong's Hutchison Whampoa operates at either end of the canal. Repatriations will worry other Central American states, excepting El Salvador, whose president is a MAGA enthusiast.
FOR BUSINESS. The irony of Trump's bullying is it will drive a normally acquiescent region further into China's arms. This is most acute in Guatemala, which, against its interests, still recognises Taiwan, and Honduras, whose president has threatened to expel the US military. It's also acute in Panama for non-canal reasons, with Colombia's ELN rebel group active in the Darien Gap, through which many migrants pass. A war with the ELN restarted on the weekend.
CHINA. TAIWAN. Earthquake
The ground shifts beneath technology supply chains.
China's vice president joined VIPs at Trump's inauguration Monday, after holding cordial meetings with JD Vance and Elon Musk. Joining other tech moguls, TikTok's CEO sat next to Tulsi Gabbard, Trump’s national intelligence nominee.
INTELLIGENCE. The sudden rehabilitation of China Inc on day 1 of the Trump administration has boosted Asian markets but frayed nerves in Taiwan, where a 6.4-magnitude earthquake seemed to respond in kind, forcing the evacuation of a Taiwan Semiconductor factory near Tainan and injuring dozens across the island’s south and central regions. Trump is still threatening anti-Chinese trade measures, but the potential for a “grand bargain” has increased.
FOR BUSINESS. TSMC production is understood to have been paused for several days, with engineers examining whether any damage was made to the firm’s ultra-precise chip fabrication equipment. It will take weeks, if not more, to assess the strategic implications of Trump’s early signals to Beijing. The president says he wants more talks with Xi Jinping. Perhaps sensing the danger, Vladimir Putin held a video call with his “dear friend” Xi Tuesday morning.
BRICS. Aiding and abetting
Sudden shifts on aid cede influence to US competitors.
The US left the Paris Climate Accord and World Health Organization Monday, fulfilling two of Trump's "America First" promises. An executive order suspended all US foreign assistance programs for 90 days pending a strategic review.
INTELLIGENCE. Foreign aid reviews happen all the time, but seldom do they involve a pause on spending before the outcome is known. Much is unclear about the precise effect of Trump’s EO, with many programs already appropriated by Congress and in the custody of delivery partners, including the WHO. Yet the message is clear and will be exploited by US adversaries, particularly in the BRICS, which now claims to represent the “Global South” of developing nations.
FOR BUSINESS. The impact will also be felt in the “north”, specifically the EU, UK and Japan, the world’s other big donors. And as China and Russia seek more influence in the multilateral system, this has consequences for trade law and commercial standards, not just humanitarian and development policy. There’s also the optics of pausing aid amid global wars and catastrophes. Trump, a marketing genius if nothing else, will recognise this more than most.