“The postwar global order is not just obsolete; it is now a weapon being used against us,” Secretary of State Marco Rubio declared at his confirmation hearing at the start of Donald Trump’s second term.
Speaking in Riyadh in May, President Trump sketched an emerging America First world order, rejecting decades of bipartisan nation‑building and democracy promotion in favor of “commerce, not chaos” and pragmatic cooperation across political divides.
Most recently Vice President JD Vance distilled the Trump foreign policy doctrine into a three‑step formula designed to reassure the MAGA movement’s isolationist wing (of which he was once a part): One, articulate a clear American interest. Two, try to solve it diplomatically. Three, if that fails, use overwhelming military power — and exit before the conflict becomes protracted.
Since returning to office, Trump has applied this doctrine by revoking U.S. sanctions on Syria, ending airstrikes against Yemen’s Houthi forces, and joining Israel’s bombing campaign against Iranian nuclear sites — all in the name of a “better and more stable” Middle East that serves American interests. He has publicly disagreed with Israeli Prime Minister Netanyahu by acknowledging “real starvation” in Gaza as his hopes for a diplomatic solution diminish. He has pursued a reset with Russia’s President Putin to try to end the war in Ukraine through negotiations, and pressured NATO allies to more than double their defense spending and fund the latest tranche of military aid to Kyiv.
On trade, the Trump doctrine is manifesting itself through historically high U.S. tariffs and a series of roughly sketched agreements that have generated new federal revenue, vague multibillion‑dollar investment pledges, and leverage to pressure reluctant partners such as India and Switzerland to help the U.S. achieve its strategic objectives, including isolating Russia and China.
Time will tell whether the Trump doctrine proves more durable than efforts to define the Mar-a-Lago accord(a proposed plan to restructure global trade by weakening the dollar, reshaping debt, and linking national security to economic leverage), or more popular than Bidenomics. So far, Americans seem unconvinced: Trump’s net approval ratings stand at -10.5 percentage points on foreign policy, -12.9 points on the economy, and -19.7 points on inflation, according to recent polling averages.
Foreign policy rarely decides elections, but the 2026 midterms may hinge on whether the president can reset the terms of global trade in America’s favor without inflicting significant domestic pain. Economists note that tariffs take six to 18 months to fully register — which means voters may feel their impact just as campaigning moves into high gear.
During the Biden administration, a significant amount of spending went into clean‑energy manufacturing and infrastructure through new laws and subsidies. The Inflation Reduction Act alone spurred roughly $270 billion in manufacturing investments by mid‑2024. Six months into President Trump’s second term, the boom seems to be fading: Companies have scaled back or canceled more than $22 billion in projects in the first half of this year. The EV and battery sector has been hit hardest, with multi‑billion‑dollar factories canceled or paused in mid‑stream. By some estimates, at least $7.5 billion in planned investment has evaporated, including Kore Power’s $1.2 billion Arizona EV battery plant (cancelled) and AESC’s $1.6 billion South Carolina facility (postponed indefinitely). Together, the cancellations have cost around 16,500 jobs, mostly in Republican districts — a point Democrats are seizing on to argue that Trump’s tax and spending package is driving up costs and cutting jobs.
To be sure, some projects are moving forward, adding up to $21.1 billion in new capital investment announced in the past six months, although these tend to be smaller and less dependent on federal incentives. Even so, the outlook for EVs appears to be worsening. The Trump administration has revoked California’s emissions waiver (which would have required 80% of new vehicle sales in the state to be electric by 2035) and scrapped automakers’ penalties for failing to meet federal fuel economy standards. As a result, EVs are now expected to account for just 19% of U.S. new car sales by 2030, down from a 24% forecast in January and well below the Biden administration’s 50% target. New tariffs will likely raise vehicle prices by $2,000-$4,000, for both gasoline and electric models — but a growing pool of used EVs will make them accessible to cost-conscious drivers, powering the next phase of EV adoption.
The Trump administration’s trade deals with the EU, Japan, and South Korea are reshaping the global auto industry in complex ways while keeping uncertainty high. Beginning August 1, European and South Korean automakers face a 15% tariff on cars exported to the U.S., down from 25% but still far above the 2.5% rate in place before President Trump’s return to office. Japanese automakers are in a similar position, though Tokyo is pressing for an executive order to ensure that the 15% tariff is not “stacked” on top of separate tariffs on metals.
All three arrangements are “framework deals” rather than binding treaties, meaning the terms could still change. In Europe’s case, Trump has already threatened to raise tariffs to 35% if Brussels fails to deliver on its pledge to channel hundreds of billions of dollars into U.S. projects and purchases of American energy exports. The result is tariff relief for foreign automakers, but no guarantee that today’s terms will hold tomorrow.
For U.S. automakers, the outlook is mixed. They gain improved export access to Europe, which eliminated its 10% duty on American‑made cars, and Japan, which has pledged to open its market further. But at home they continue to face heavy headwinds: a 25% tariff on imported parts (unless they qualify for an exemption under USMCA rules of origin), plus 50% tariffs on imported steel, aluminum, and, soon, copper. Vehicles built in Canada and Mexico, already subject to a 25% levy, face the prospect of even higher rates, with Canada’s rising to 35% beginning August 8 while Mexico’s remaining at 25% as trade talks continue.
Since many automakers rely on cross‑border production, the new math could make it cheaper for foreign firms to ship finished vehicles into the U.S. rather than expand American operations — undercutting Trump’s stated goal of reviving domestic manufacturing. With the USMCA up for review in 2026, some analysts predict that intra‑bloc auto tariffs could ultimately settle closer to 7.5%, but until then the trade picture for the industry remains uncertain and fraught with risk.
