GeoLegal Weekly #43 - Trump and Geolegal Risk
A new era of geolegal risk.
Donald Trump won a decisive electoral victory last night, with the only question remaining whether he will have unified control of government or face opposition from Democrats who control the House of Representatives. To say this is a seismic political event with tremendous geolegal repercussions is an understatement.
How it Happened
Trump won the election despite the setbacks of assassination attempts and opponent switches. He won the first US election where brazen foreign meddling took clear sides both for (Russia) and against him (Iran). He won the election by mobilizing first-time voters and eating into Democratic support of core constituencies through wedge issues. He won because, as I wrote a couple weeks ago, voters were probably going to vote against Kamala Harris’ race and gender more than they were telling pollsters.
Trump won because he had finally been mainstreamed among many elites, which gave air cover to further enthusiasm among rank-and-file voters who were on the fence. Trump went from a fringe candidate in 2016 to a pariah post-2020 and then stormed back to power after being re-platformed, backed by the world’s richest man, and with many news outlets (including some of the most traditionally liberal) opting not to choose sides (legitimizing his campaign in a way they had done the opposite of previously).
Most importantly, he won the election because voters dislike the status quo and showed up to vote against it. Politics is often a pendulum that swings side to side when voters are grumpy. Such feelings have handed the presidency back and forth now for the third time in a row. That is, of course, unless the pendulum stops due to one party becoming the natural party of government (unlikely in a fiercely divided country) or one party wins and weaponizes law and technology to cement a more authoritarian vision (more possible today than yesterday).
What it means
We will have plenty of time between now and January to think about what the world looks like under Trump, but we know a lot because he was president previously. What’s changed is the world he faces. My overall takeaway is that we are going to see seriously more policy volatility than we have in the last four years and developing cross-cutting strategies to manage the intersection of politics, law and technology will be even more critical as these risks unfold in real-time.
Some quick hits:
Trump doesn’t moderate: A big mistake analysts made post-2016 was to overestimate the moderating effect of walking through the White House door as president. In reality, Trump did what he said he would do - whether that was picking a trade war with China, trying to implement a Muslim ban or lowering taxes and gutting certain regulations. This time around, his campaign’s signature policy proposals included more tax cuts, broader tariffs and mass deportations. Expect him to attempt to go for all of them - with more ease if he controls the House, alongside the Republican-flipped Senate. And expect tit-for-tat retaliation from tariffed countries who are no longer “waiting Trumpism out” as they did in his first term. I’m particularly interested to watch the impact of economic nationalism on businesses who will be expected to increasingly produce and buy American. And while I think pressure from a Trump FTC will be more narrow, I don’t think companies in antitrust crosshairs are out of the woods.
Legal guardrails and legal weapons: The US Constitution contemplated checks and balances to hold off the worst tendencies of any president. But those guardrails are eroding, as I’ve been writing about for much of this year. The president has broader immunity than ever before, limiting how the law limits him. And he may decide to pardon himself, in a historic first. The law has become more politicized, with more suspension of disbelief than ever required when expecting partisan-appointed judges to find against their party patrons. Trump has promised to use the Justice Department to go after his enemies, and, per the first bullet above, I believe him. As Democrats retreat to virtually powerless at a federal level, they will use sympathetic state courts to go after Trump and his allies at a personal level, though, per the immunity point, it may not matter. They may look to use nationwide injunctions where they can as a last line of defense on policies.
Return of Isolationism and Brinksmanship: Trump likes to claim that no global wars were started on his watch. To be sure, countries were wary of an unpredictable leader with his finger on the nuclear button - neo-deterrence, if you will. But the main thrust of Trump’s worldview is that the US should further retreat from its longstanding role as a global police force. To some extent, that means America’s adversaries will take small, concentrated gains with confidence that the US is uninterested - a few un-inhabited islands for China might not seem like much until we zoom out and China’s territorial claims have expanded markedly. The same is much more consequential if it is Russia trying to take a small former-Soviet Republic, which still might not be something Trump cares much about. Indeed, Ukraine war support feels like the biggest dimension across which this will be tested - Republican war hawks in Congress will maintain some support to counter Putin, but the US will be much more restrained in its role in the conflict.
Rule of Law Implications
Did we just dodge a rule of law bullet or were we struck by one? Democrats might have contested the election if it came down to a few thousand votes in Georgia, where phone calls and emails from Russia - termed “non-credible bomb threats” - disrupted the polls. Or where Elon Musk’s sweepstakes might have moved the needle in Pennsylvania. But a decisive Trump win with a (likely) popular vote mandate and possible full control of Congress was the core scenario under which Democrats wouldn’t contest the election. So we probably dodge the uncertainty and political violence that would have characterized the next couple of months (we may still see some spots of violent protest but nothing like we would have seen if the results were unclear).
But is this an orderly change of power? Voters went to the polls and made a choice and it seems like that choice will be respected. But it was only in the days after the 2016 election that the picture of foreign interference and Cambridge Analytica become clear. And a president promising that voters may never have to vote again could affect the electoral process in more fundamental way than any single election could. This story is only revealed at this moment.
At an international level, there are two rule of law implications. First, the retreat of international law and custom will be hastened by a president who has personally suggested the US withdraw from an alphabet soup of most international organizations. Second, the US is not going to use moral suasion to limit human rights casualties in the Middle East or Eastern Europe (which it didn’t do much of during Biden’s term, anyway.) So ruthless warring states can continue to be ruthless.
As I wrote about last week, rule of law is in retreat in 2024 around the world and a few moderations in South Africa or India does little to blunt that assessment. But more importantly, Trump’s rise to power in 2016 gave cover to other strongmen to run campaigns in his mold (like in Brazil) and for other hardliners to become even more so (whether Orban in Hungary or Putin in Russia). Trump’s re-election no doubt reinvigorates that playbook.
Managing Geolegal Risk
To the extent that we’ve had any foresight at Hence Technologies, it’s to begin building a platform to manage the intersection of political and legal risk for companies. No doubt this is more relevant today than yesterday. We will be releasing our first version in the next few weeks - if you’d like priority access, please join our waitlist.
Give a shout if you want to discuss any of the above.
-SW
Trump won't need to pardon himself. The kangaroo court convictions will not survive the appeals process.
Will Joe Biden pardon Hunter or leave it to Trump to do as an act of national reconciliation?