In His Second Year, Trump Imposes a New Global Economic Reality

16 January 2026, US, Washington: US President Donald Trump attends a rural health investment roundtable in the East Room of the White House. Photo: Andrew Leyden/ZUMA Press Wire/dpa
16 January 2026, US, Washington: US President Donald Trump attends a rural health investment roundtable in the East Room of the White House. Photo: Andrew Leyden/ZUMA Press Wire/dpa
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In His Second Year, Trump Imposes a New Global Economic Reality

16 January 2026, US, Washington: US President Donald Trump attends a rural health investment roundtable in the East Room of the White House. Photo: Andrew Leyden/ZUMA Press Wire/dpa
16 January 2026, US, Washington: US President Donald Trump attends a rural health investment roundtable in the East Room of the White House. Photo: Andrew Leyden/ZUMA Press Wire/dpa

On Tuesday, US President Donald Trump completes his first year in the White House - a year marked by the adoption of a strict protectionist approach and accelerated financial policies that caused shocks in global markets and reshaped international trade balances. As the administration moves into its second year, structural liberation from institutional constraints is emerging, with a trend towards enhancing the expansion of presidential powers through unilateral decisions, which raises the intensity of geopolitical risks and deepens the division in the political and economic landscape of the United States.

Radical Change

Upon his triumphant return to power on January 20, 2025, Trump pledged to reshape the economy, the federal bureaucracy, and immigration policies. Indeed, he implemented a large part of this agenda, becoming one of the most powerful presidents in modern American history. His radical economic measures included downsizing the federal administration, abolishing government agencies, reducing foreign aid, and imposing comprehensive tariffs that sparked global trade tensions. He also passed a massive tax package and sought to restrict some vaccines, while continuing to pressure academic, legal, and media institutions, focusing on his domestic economic priorities.

Centralization of Power and Challenging Monetary Independence

In recent weeks, Trump revived his controversial plan to acquire Greenland and threatened military force against Iran, ignoring concerns about the criminal investigation into Federal Reserve Chairman Jerome Powell. In an interview with Reuters last week, Trump showed no concern about the potential economic repercussions of pressuring Powell, stating, "I don't care." In remarks to the New York Times, he said the only constraint he has as commander-in-chief is "his personal ethics," reflecting his philosophy of governance that prioritizes personal judgment over institutional constraints.

Inflation and Popularity Test

Despite his insistence that the current economy is the "strongest" in history, Trump faces increasing popular pressure due to inflationary pressures and persistent price increases, which is the biggest challenge before the midterm elections in November. His efforts to reduce the cost of living are complicated by conflicting messages about inflation, which he sometimes described as a "Democratic hoax." Analysts believe that excessive focus on foreign affairs may weaken the effectiveness of his domestic economic policies even as Trump plans to conduct field tours to promote his plan to address high prices.

Shift in Economic Decision-Making

From an executive standpoint, Trump has invested executive orders and emergency declarations to shift the weight of economic decision-making from Congress to the White House. These policies are based on the support of the conservative majority in the Supreme Court, Republican control of the House of Representatives, and the loyalty of his ministerial team, which gives him exceptional ability to implement without much obstruction. Economic historians describe this influence as unprecedented since the era of Franklin Roosevelt (1933-1945), who enjoyed broad popular and legislative support to confront the Great Depression, while Trump exercises his current authority amid sharp division in public opinion.

Political Indicators and November Risks

According to a Reuters/Ipsos poll, Trump's approval rating was 41 percent, compared to 58 percent disapproval, which is a relatively low number for American presidents. Democratic strategist Alex Floyd warned that "ignoring the controls of the rule of law" could cost Republicans in the ballot box. For his part, Trump acknowledged to Reuters the risk of losing control of Congress in the November election, warning his party that a Democratic majority could mean facing impeachment for the third time.

First Year Assessment

During his first year, Trump reduced the size of the federal civilian workforce, shut agencies, reduced humanitarian aid, issued orders for widespread immigration raids, and even sent the National Guard to cities run by Democratic authorities. Economically, he ignited trade wars by imposing tariffs on goods from most countries, passed a law to cut taxes and spending, continued to prosecute his political opponents, and canceled or restricted access to some vaccines, and attacked universities, law firms, and media.

Despite promising to end Russia's war in Ukraine from day one of taking office, Trump has made little progress towards a peace agreement, while claiming to have ended eight wars, a claim widely disputed, given the continuing conflicts in several parts of the world.

Expectations for the Next Stage

Presidential historian Timothy Naftali said that Trump exercised his executive powers during his second term with fewer restrictions than any president since Roosevelt. In the early years of Roosevelt's presidency, the Democratic president enjoyed a large majority in Congress, which allowed him to pass most of his domestic agenda to expand the scope of government without significant resistance. He also enjoyed broad popular support for his efforts to deal with the Great Depression, while the Republican opposition was fragmented and weak.

Analysts from the Republican Party point out that Trump's difficulty in convincing voters that he is aware of their living challenges, especially with the high cost of living, may push some Republican representatives to distance themselves from him to ensure they maintain their seats in the midterm elections.

An analysis of the trajectory of Trump's current policies shows that he has increased the power of the executive presidency at a rare rate, transforming most of the economic and political decision-making process to the Oval Office, while limiting the influence of Congress and institutional controls. However, erratic economic policies and his perceived "distracted" speeches have worried some Republican strategists, who fear that his focus on foreign issues will cost him voters.



ECB President Lagarde Reportedly Plans to Quit Before Macron's Term Ends

FILE PHOTO: European Central Bank (ECB) President Christine Lagarde addresses the press following the ECB's Governing Council meeting, at the ECB headquarters in Frankfurt, Germany, February 5, 2026. REUTERS/Jana Rodenbusch/File Photo
FILE PHOTO: European Central Bank (ECB) President Christine Lagarde addresses the press following the ECB's Governing Council meeting, at the ECB headquarters in Frankfurt, Germany, February 5, 2026. REUTERS/Jana Rodenbusch/File Photo
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ECB President Lagarde Reportedly Plans to Quit Before Macron's Term Ends

FILE PHOTO: European Central Bank (ECB) President Christine Lagarde addresses the press following the ECB's Governing Council meeting, at the ECB headquarters in Frankfurt, Germany, February 5, 2026. REUTERS/Jana Rodenbusch/File Photo
FILE PHOTO: European Central Bank (ECB) President Christine Lagarde addresses the press following the ECB's Governing Council meeting, at the ECB headquarters in Frankfurt, Germany, February 5, 2026. REUTERS/Jana Rodenbusch/File Photo

European Central Bank President Christine Lagarde plans to leave her job before next year's French presidential election to allow Emmanuel Macron to have an input into picking her successor, the Financial Times reported on Wednesday.

Lagarde's term is due to end in October 2027 but some fear that the far right may win the French presidential race ‌in the spring of ‌2027, complicating the selection for the ‌new ⁠leader of Europe's most ⁠important financial institution.

Citing a person familiar with the matter, the FT said Lagarde has not yet decided on the exact timing of her departure but was keen on Macron and German Chancellor Friedrich Merz to be the key deciders in who succeeds her. Macron cannot run again for a third term.

"President Lagarde is ⁠totally focused on her mission and has not ‌taken any decision regarding the end ‌of her term," Reuters quoted an ECB spokesperson as saying.

The FT report comes only ‌a week after Bank of France Governor Francois Villeroy de Galhau ‌said he would step down in June this year, more than a year before the end of his term, allowing Macron to name his replacement before the presidential election that the far-right could win.

While it ‌will be up to all leaders from the 21-nation euro zone to pick Lagarde's successor, ⁠past practice ⁠suggests that any successful candidate must have both German and French support to clinch the role.

There are no formal candidates for the job yet but several names have been floating among ECB circles as potential ECB presidents. The most prominent among these are former Dutch central bank chief Klaas Knot and Bank for International Settlements General Manager Pablo Hernandez de Cos.

Lagarde's non-renewable term at the ECB runs until October 31, 2027. Prior to heading the ECB, she was managing director of the International Monetary Fund from 2011 to 2019 and before that, the French finance minister.


UK Inflation Falls to 3.0% in January

Pedestrians cross Westminster Bridge in front of Parliament during the early morning hours in London, Tuesday, Feb. 10, 2026.(AP Photo/Kin Cheung)
Pedestrians cross Westminster Bridge in front of Parliament during the early morning hours in London, Tuesday, Feb. 10, 2026.(AP Photo/Kin Cheung)
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UK Inflation Falls to 3.0% in January

Pedestrians cross Westminster Bridge in front of Parliament during the early morning hours in London, Tuesday, Feb. 10, 2026.(AP Photo/Kin Cheung)
Pedestrians cross Westminster Bridge in front of Parliament during the early morning hours in London, Tuesday, Feb. 10, 2026.(AP Photo/Kin Cheung)

Britain's annual ‌rate of consumer price inflation fell to 3.0% in January from 3.4% in December, official figures showed on Wednesday.

A Reuters poll of economists had shown a median forecast of 3.0% in January and the Bank of England projected earlier this month that the headline measure of inflation would slow to ‌2.9%.

British inflation ‌has run higher than in ‌the ⁠United States and in ⁠the euro zone where it stood at 2.4% and 1.7% respectively in January.

But the BoE expects the pace of price rises to slow sharply to almost its 2% target in ⁠April as last year's rises ‌in utility costs and ‌other government-controlled tariffs fall out of ‌the annual comparison.

Investors expect the central bank ‌to cut its benchmark interest rate to 3.5% at its next meeting in March after a tight vote to keep borrowing costs ‌on hold in February although some policymakers remain worried about underlying ⁠inflation ⁠pressure.

Financial markets on Tuesday also priced a second quarter-point interest rate cut by the BoE by the end of in 2026.

ONS data last week painted a downbeat picture of Britain's economy at the end of 2025 with output barely growing. Figures released on Tuesday showed the labor market was still losing jobs although there were some signs of a stabilization.


Riyadh to Host Middle East’s Largest General Aviation Airshow in November 

The AERO Middle East x Sand & Fun 2026 will be held in Riyadh from November 24 to 28. (SPA)
The AERO Middle East x Sand & Fun 2026 will be held in Riyadh from November 24 to 28. (SPA)
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Riyadh to Host Middle East’s Largest General Aviation Airshow in November 

The AERO Middle East x Sand & Fun 2026 will be held in Riyadh from November 24 to 28. (SPA)
The AERO Middle East x Sand & Fun 2026 will be held in Riyadh from November 24 to 28. (SPA)

The Saudi Aviation Club announced that it will organize the AERO Middle East x Sand & Fun 2026 in Riyadh from November 24 to 28, reported the Saudi Press Agency on Tuesday.

The event is set to be the largest of its kind for general aviation in the Middle East, combining international business, investment, and innovation with live flying displays and interactive public experiences. It is being held in partnership with Messe Frankfurt Saudi Arabia.

Held at Thumamah Airport, the exhibition will bring together leading global companies operating in the general aviation industry, including aircraft and components manufacturers, avionics and navigation systems providers, as well as maintenance, repair, and overhaul (MRO) companies, offering an integrated platform that covers the full value chain of the sector.

The event will also spotlight startups in advanced air mobility (AAM) and innovators of electric vertical take-off and landing (eVTOL) aircraft, showcasing technologies and business models shaping the future of aviation.

General Supervisor of the Saudi Aviation Club Dr. Ahmed Alfahaid stated that AERO Middle East x Sand & Fun 2026 represents a qualitative leap for the Kingdom’s aviation sector and reinforces its positioning as a global hub for general aviation and advanced air mobility.

The partnership with Messe Frankfurt Saudi Arabia goes beyond presenting global innovations to providing a vital platform for international investment and strategic collaboration, he stressed.

Moreover, the event contributes to achieving Saudi Vision 2030 objectives, including the Kingdom’s ambition to rank among the world’s top 10 general aviation markets, he added.