The Trump Administration will bring about a shift in US global security policy.
Economist Intelligence Unit (EIU) assesses the degree of countries’ reliance on a more independent foreign policy approach, with the slogan “America First”, through the Security Dependence Index. This index includes factors such as dependence on US military aid and the presence of US troops in countries.
Trump is known for his view that America’s defense alliances need to be rebalanced, with partners contributing more. Thus, a country’s defense expenditure (as a percentage of GDP) is considered a crucial factor in this auxiliary index. EIU also takes into account foreign sales of military weapons, believing that increased spending on American arms will reduce countries’ risks amidst potential security shifts during Trump’s tenure.
Countries Most Affected by Security Policies under President Trump
Source: Economist Intelligence Unit (EIU)
(*) Note: Higher scores indicate greater influence.
Some of America’s closest allies are deemed to be among the most affected in terms of security.
NATO allies in Eastern and Central Europe, such as Bulgaria, Estonia, and Latvia, rank high on the list. This is particularly concerning given their vulnerability should tensions between NATO and Russia escalate into full-blown conflict. Germany, which hosts a significant number of US troops and has a low defense expenditure relative to its GDP, is third on the list. Meanwhile, although Japan shares some similarities, it is considered less affected due to its higher spending on American weapons.
Several Latin American countries, including Costa Rica and Panama, which receive military aid from the US but have limited or no defense expenditure, also fall within the top ranks of this classification.
Average Military Expenditure as a Percentage of GDP for US Allies during 2022-2023
Source: Economist Intelligence Unit (EIU)
Among key US allies, Australia, Finland, Greece, and Poland are deemed the least affected, thanks to their robust defense spending and purchases of American weapons. Oman and Saudi Arabia, significant defense partners of the US in the Middle East, exhibit limited dependence on Trump’s policy shifts.
Non-aligned countries like India and Singapore also display relatively low dependence, despite their close military ties and cooperation with the US, as they largely rely on their defense resources.
Trump Risk Mitigation Strategies
Governments and businesses can consider strategies to mitigate risks associated with potential policy shifts under a Trump administration. For instance, the Trump administration may view Germany and Japan’s recent commitments to increase defense spending positively. Precautionary measures can be implemented to minimize trade risks. Governments must tightly control and prevent the export of Chinese goods disguised as domestically produced goods to the US. State-directed purchases of American agricultural and energy products could alleviate concerns about trade imbalances. Companies exporting politically sensitive goods, such as steel, to the US may consider market diversification to hedge against higher tariff risks.
Fostering close relationships between leaders can also be advantageous. Trump’s first term demonstrated that his decisions could be influenced by his personal relationships with other leaders. Then-Japanese Prime Minister Abe Shinzo successfully secured trade concessions for his country by skillfully cultivating a relationship with Trump. It is also possible that some leaders may find in Trump an ideological ally with whom they can collaborate and bring benefits to their nations. Examples include Hungary’s Prime Minister Viktor Orban and Argentina’s President Javier Milei, who stand out as “Trumpists” in regions where most other political leaders may hold divergent ideological views. Trump’s return poses risks for some countries but not all.
– 09:00 28/12/2024
