At the start of each year, Foreign Policy asks some of our columnists for the one key issue they’ll be watching in the year ahead.
This year, it goes without saying that most of us here at FP will be watching the return of Donald Trump to the White House—and the profound impact his policies are likely to have on many parts of the world, from Ukraine to the Middle East.
So it’s little surprise that a second Trump presidency touches on many—but certainly not all—of the topics our columnists think will shape the coming year. Here are seven issues with potentially global implications that should be on everyone’s radar in 2025. —Stefan Theil, deputy editor
America’s Oligarch
By James Crabtree
U.S. President-elect Donald Trump and Elon Musk watch the launch of a SpaceX rocket in Brownsville, Texas, on Nov. 19.Brandon Bell/Getty Images
Almost ever since Elon Musk emerged as a high-profile advisor to U.S. President-elect Donald Trump, skeptics have gloried in predicting that the two headstrong men will inevitably fall out. In 2025, the more interesting question will be what happens if they work ever more effectively together.
Musk will occupy a prestigious position in the top tier of Trump whisperers. His official role co-leading the Department of Government Efficiency (DOGE) comes with the grandiose and almost certainly unrealistic goals of cutting $2 trillion—or around one-third—from the U.S. federal budget. DOGE’s influence will rely on Musk’s ability to use his access to intervene in the U.S. government by persuading Trump to selectively cut government programs and personnel.
Elsewhere, Musk will continue to shape public debates, not least via his social media platform X, on topics ranging from the U.S. culture wars to support for right-wing political parties in Europe—as seen in December, when Musk published a stream of endorsements for the far-right, pro-Russian Alternative for Germany in that country’s upcoming national election. Also last month, Musk entered a war of words with anti-immigrant Trump supporters over the merits of H1-B worker visas—a feud he appeared to have won, at least for now, when Trump subsequently came out in favor of the visas.
Perhaps the most interesting question is how the world’s richest man might shape Trump’s foreign policy. He is already turning up in unexpected places; in November, for instance, he met with Iran’s ambassador to the United Nations; in early December, he joined Trump in a meeting with Hungarian Prime Minister Viktor Orban at Mar-a-Lago.
Musk’s views—and financial conflicts of interest—will be watched most closely in relation to U.S. policy toward China and Russia. Tesla’s factory in Shanghai, which operates at the mercy of Chinese authorities, can produce nearly 1 million cars a year, or around 40 percent of the company’s total production capacity. Musk met with senior Chinese leaders multiple times over recent years and often praises China’s political system. Whereas most nominees for Trump’s foreign-policy team are China hawks, Musk’s influence hints at a more erratic and potentially warmer approach to Beijing, which is in line with Trump’s decision to invite Chinese President Xi Jinping to his inauguration this month.
Musk’s frequent channeling of Kremlin talking points on Ukraine will be a second area of focus, as Trump prepares plans to bring the war to a rapid close. Indeed, Musk’s influence is already clear: He is reported to have been in contact with Russian President Vladimir Putin since late 2022, and he also took part in Trump’s first phone call post-election win with Ukrainian President Volodymyr Zelensky, of whom Musk is often publicly contemptuous.
On a more operational level, Musk used his Starlink satellite system to privately undermine Ukraine’s war effort in 2023, reportedly restricting access to blunt a military offensive. He could plausibly use similar threats against Ukraine as leverage in Trump’s negotiations.
For Musk’s influence to grow, his chemistry with Trump must remain strong. The risks of a clash of two Mars-sized egos remains clear. Yet for now there are no signs of discord as the two men seem to revel in one another’s power. Even if they do eventually split, Musk’s place at Trump’s side has already emerged as one of the most unpredictable and controversial issues to watch as Trump starts his second term.
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Can Corporate America Contain Trump?
By Edward Alden
Republican presidential nominee Donald Trump speaks at the Republican National Convention in Milwaukee on July 18.Brendan Smialowski/AFP via Getty Images
Did corporate America make a good bet on Donald Trump? And if not, will its complaints change what he does in his second term?
Those are the questions I will be asking in 2025, because the bet made by investors is a big one indeed. Stock markets and the U.S. dollar rallied after Trump’s election victory on expectations of tax cuts and further deregulation. Corporate CEOs seem confident they can dissuade Trump from carrying out his more radical promises.
His most radical plans are for the two issues that I follow most closely: trade and immigration. Here, Trump’s agenda is not supported by business. With rare exceptions, most U.S. companies have long favored free trade and open immigration. Low tariffs bring down costs, open new markets abroad, and ease the path to investing in lower-cost countries like Mexico and Vietnam. High immigration attracts skilled laborers and innovators, and it helps keep wage costs down in agriculture and service sectors.
Trump, as we know by now, is on the opposite side on these issues. He has threatened to impose the steepest tariffs since the 1930 Smoot-Hawley Tariff Act, which is widely blamed for deepening and extending the Great Depression. He has also called for a mass deportation of migrants that would far exceed the mass removals of the 1930s and 1950s.
Businesses are gambling that they can walk Trump back on these issues. But so far, they have run into a brick wall on tariffs, with Trump’s advisors telling CEOs he means what he says. On immigration, Trump told NBC News that he favors deporting entire families, including their children that are U.S.-born citizens, and is set to reverse a policy that prohibits Immigration and Customs Enforcement agents arresting migrants at sensitive locations like schools, churches, and hospitals.
The president-elect may wobble if markets react negatively; Trump sees the stock market as a key measure of his performance. But if business reaction does not hold him back, it’s hard to see what will. On trade, his first-term administration blew through the rules of the World Trade Organization and his second one seems set for unprecedented use of emergency authority to bypass the U.S. Congress. On immigration, the constraints seem even weaker.
Corporate America’s bet on Trump is going to matter far beyond corporate boardrooms. Business is all that stands between the president-elect and the most harmful parts of his agenda. All the other guardrails look pretty thin.
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Will Israel’s Settlers Return to Gaza?
By Steven A. Cook
Right-wing activists attend a convention in Jerusalem on Jan. 28. The event was held to call on Israel to resettle the Gaza Strip and the northern part of the West Bank.Amir Levy/Getty Images
For me, the issue to watch in 2025 is what happens in Gaza. That might sound strange. After all, Gaza was the issue that dominated global politics for the last third of 2023 and almost all of 2024—until the dramatic fall of President Bashar al-Assad’s regime in Syria. Yet, 2025 is going to be the year when the battle for Gaza actually begins. It seems likely that sometime soon, Israeli military operations will come to an end. In the last few months, the Israel Defense Forces have been walloping the northern part of Gaza, where Hamas fighters remain but are now low on food and other supplies. For the first time since its Oct. 7, 2023, attack on Israel, the Hamas leadership recently signaled that it is willing to accept a cease-fire and hostage deal that allows Israeli forces to remain in the Gaza Strip. That is a big deal.
Assuming an agreement is reached, the disposition of the Gaza Strip will become a major issue in the Middle East. Although various organizations, analysts, and governments have come up with a variety of plans for post-war Gaza, most of them are unrealistic. The Gulf states are not coming to the rescue with money, NATO countries are not sending peacekeepers, and Palestinians are not likely to accept an international mandate for Gaza. There is one group, however, that has a plan that may appear just as unrealistic—but the difference is that they may have an opportunity to try and implement it: Israeli settlers.
The settlers—and the religious Zionist movement more broadly—do not believe in a two-state solution and bitterly opposed Israel’s withdrawal from the Gaza Strip in 2005. At the time, they argued that evacuating the area would not bring Israel security, but rather the opposite. Regular rocket fire from Gaza in addition to four conflicts—2008 to 2009, 2012, 2014, and 2021—reinforced this view, but the horrors of Hamas’s Oct. 7 attack seem to have convinced a large segment of the Israeli public that withdrawal was a mistake. According to a recent poll from the Israel Democracy Institute, 42 percent of Jewish Israelis now support resettlement of the Gaza Strip, while 52 percent oppose and 6 percent do not know. Folks should take little comfort in the fact that most Israelis still oppose resettlement in Gaza, as the political parties that represent the anti-resettlement majority are out of power and will likely remain so for the next two years and perhaps beyond.
The settlers also see an opportunity in the return of U.S. President-elect Donald Trump to the White House. Trump’s pick for the U.S. ambassador to Israel, former Arkansas Gov. Mike Huckabee, is an ally. Take all this together and no one should be surprised if settlers drop a double wide in the middle of what used to be a settlement in Gaza or even along the border fence—and dare the Israeli military not to defend it. The settlers do not agree on everything, including what would happen to the Palestinian population in Gaza, but after the brutal conflict of the last 14 months, it’s not hard to imagine the worst.
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China Tries to Put Its Economy Back on Track
By Zongyuan Zoe Liu
A view of the sunset at the port in Nanjing, China, on Dec. 7, 2023.STR/AFP via Getty Images
2025 marks the conclusion of the Chinese Communist Party’s 14th Five-Year Plan—and the year when Chinese policymakers will set their economic goals for the next five years. To improve their scorecard for the current plan, Chinese leaders will likely launch another round of economic stimulus this spring.
The return of Donald Trump as U.S. president and his threats of levying steep tariffs on Chinese goods is not the most significant challenge for Beijing. The real challenge lies at home. While Chinese policymakers have experience designing and implementing industrial policies, they struggle to mobilize Chinese consumers to spend and drive growth. Beijing has also resisted the tough political decisions it would have to make to redirect a significant share of national income to the household sector so that consumers have the confidence to consistently spend; the current policy of occasional cash handouts to citizens are unlikely to spur household spending over saving. Beijing will find it difficult to restore policy credibility and market confidence without addressing the deeper imbalances of the Chinese economy in the next five-year plan.
Still, Trump’s tariffs could help: If economic reformists in Beijing can leverage rising tariffs to push domestic reform and increase household consumption, China can sustain a more balanced growth in the long run despite short-term pains.
So far, the signs are not encouraging. In December, policymakers set out their economic planning goals for 2025 at the annual Central Economic Work Conference. They called for expanding domestic demand by boosting domestic consumption, improving investment efficiency, and increasing pension and medical insurance subsidies. While this is a step in the right direction, at most it supplements the existing playbook of prioritizing investment in digital industrialization and strategic technologies, with little benefit for Chinese consumers. As work begins on the next five-year plan, Beijing continues emphasizing support for strategic industries and calls for early planning for major projects.
One way for Beijing to abandon its current economic playbook might be a grand bargain between Trump and Chinese President Xi Jinping to restore China’s access to advanced U.S. technology. Washington’s tightening export controls raise the cost of Chinese technology development and delay its progress, which incentivizes Beijing to double down on its pursuit of technological and manufacturing self-sufficiency at the expense of domestic consumption. Were that incentive to change, Beijing’s next five-year plan might finally lay out a more balanced economic model for China.
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A New Middle East—or a Return to the Old One
By C. Raja Mohan
A truck pulls part of a statue of the late Syrian President Hafez al-Assad through the streets of Hama, Syria, on Dec. 6.Muhammad Haj Kadour/AFP via Getty Images
The fall of the Assad dynasty in Damascus and the near-collapse of Iran’s Axis of Resistance at the end of 2024 is likely to have lasting consequences far beyond the Middle East, especially in neighboring South Asia.
The new dynamic could either reverse the terrible legacies of 1979 or reinforce them. South Asia, which is home to more Muslims (650 million) than the Middle East (380 million), has been radicalized since that fateful year, which saw the establishment of an Islamic theocracy in Iran, the Soviet invasion of Afghanistan, and an Islamist attack on the Grand Mosque in Mecca, Saudi Arabia. The reverberations from 1979 have shaken the domestic and regional politics of the subcontinent to the core.
If the Arab Spring in the early 2010s and Abraham Accords between Israel and some of its Gulf neighbors raised hopes for a new Middle East, the collapse of the region’s democratic movements and the intensifying conflict between Iran’s proxies and Israel triggered fresh turbulence. Israel’s devastating war in Gaza, Lebanon, and Iran—which began as a response to the Hamas attack on Oct. 7, 2023—snuffed out any residual hopes.
Now, Israel’s unexpected success in weakening Iran and its regional network opens the door for many possibilities. These include the potential change in the Iranian regime’s orientation due to external and internal pressures, the potential for a new settlement between Israelis and Palestinians, the normalization of ties between Tel Aviv and Riyadh, and new momentum for Saudi and Emirati efforts to promote moderate Islam.
On the other hand, Israeli Prime Minister Benjamin Netanyahu’s quest for “total victory,” the rise of Islamists in Syria, and Turkish meddling could well reinforce regional conflict and reinvigorate the old Middle East that exported instability and extremism to other regions of the world.
Either way, the developments in the Middle East will have profound consequences for South Asia. A positive turn in the Middle East could facilitate the normalization of ties among Afghanistan, Bangladesh, India, and Pakistan, as well as help ease growing sectarian conflict in South Asia by reducing the external impulse for religious radicalization. A negative direction in the Middle East will produce the opposite outcomes.
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Flashing Red Lights on the High Seas
By Elisabeth Braw
A British-registered cargo ship sinks after an attack by Yemen’s Houthi forces in the Red Sea on March 3. Al-Joumhouriah channel via Getty Images
I will be watching the deterioration of the global maritime order. While it may not be as dramatic as war, it is even more consequential as shipping transports more than 80 percent of global trade. Add to that the undersea pipelines and communications cables that fuel today’s economies and you realize how important oceanic order is. It will become even more crucial as countries expand construction of offshore wind farms and submarine power cables as part of the green transition. Until now, all this activity has worked smoothly amid threats no more serious than storms and pirates—even if both can be fearsome.
Now, however, global maritime activities face a fundamental fiend: the deterioration of the global maritime order on multiple fronts at once. In 2024 alone, we saw an undersea cable-cutting incident involving a Chinese-flagged bulk cargo carrier in Sweden’s exclusive economic zone in the Baltic Sea—and futile efforts by Sweden to get China to cooperate with the investigation, even though it’s obliged to do so under the United Nations Convention on the Law of the Sea (UNCLOS). We saw the unlawful shadow fleet of oil tankers continue to expand, the result of Russia’s use of the fleet for transport of sanctioned crude to far-flung countries. In December, Finnish authorities seized one of these shadow tankers, reportedly equipped with Russian espionage and communications equipment, after another act of apparent sabotage that severed subsea electricity cables between Finland and Estonia.
We also saw China’s harassment of civilian vessels in the South China Sea intensify to the point where the Philippines announced that it wants to bring another case against China in an UNCLOS tribunal—never mind that China already ignored a 2016 tribunal ruling against it. And we saw Yemen’s Houthis continue their attacks on Western-linked shipping in the Red Sea, with help from Iran and reportedly also from Russia. For Western shipping companies, the Red Sea became a no-go area; they now divert by sailing around Africa, while Chinese and Russian vessels can keep taking the shorter route through the Suez Canal.
If the global maritime order continues to deteriorate, which now seems likely, the considerable disruptions we saw in 2024 will seem like manageable inconveniences. And remember that without functioning maritime order, our modern economies won’t function either.
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Can Europe Stem Its Economic Decline?
By Agathe Demarais
Police officers check cars planned for export to the United Kingdom and Belgium in Fuzhou, China, on Feb. 26.Xie Guiming/VCG via Getty Images
In Europe, three big economic issues for 2025 are easy to identify. They will revolve around the challenges posed by a second Trump presidency, Europe-China relations, and the outlook for Russia-related sanctions. On all three, Europe’s ability to shape outcomes will depend greatly on the actions of Washington, Beijing, and Moscow. Therefore, it may be more interesting in 2025 to watch three other economic issues that the European Union can genuinely influence on its own.
As Europe struggles to stem its economic decline vis-à-vis the United States and China, 2025 will show whether EU institutions and member states are able to take an inward look at their glaring economic weaknesses and boost innovation financing. Building on the recommendations from a recent report on Europe’s bleak economic outlook by former European Central Bank President Mario Draghi, the bloc needs to acknowledge that launching a start-up is a far more difficult endeavor in Europe than in the United States. This is not a money problem: The EU economy has plenty of excess savings, as demonstrated by a current-account surplus projected to reach roughly 2.5 percent of the bloc’s GDP in 2025. Building frameworks to tap into these excess savings should be a priority for the bloc.
A second issue to watch is if the bloc will finally get serious about forging new trade partnerships with developing economies—a popular talking point in Brussels for many years. In 2025, the EU should prioritize adopting the EU-Mercosur free-trade agreement despite staunch French opposition. The deal’s net economic impact will be positive for both blocs, and its adoption will also send a positive signal of Europe’s commitment to boosting ties with emerging economies at a time when competition from China is fierce.
A third issue is how quickly Europe can relax some of its sanctions on Syria now that the brutal Assad regime has fallen. Beyond the immediate relief that such a step would bring to Syrians, lifting sanctions would have huge symbolic value, as well. Western countries have a poor track record when it comes to canceling sanctions, fueling global resentment against the measures. Making the lifting of sanctions on Syria a success story would help to combat the view that Western sanctions are only meant to punish, never to reward.
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