Geopolitics, the Great Wild Card
Author: Greg Valliere
February 13, 2025
FOREIGN POLICY HEATS UP: Second term presidents often focus on foreign policy, and Donald Trump seems to be no exception. He has a very full plate.
HERE’S OUR TAKE ON TRUMP’s prospects:
UKRAINE: Trump and many Republicans don’t like Ukrainian President Volodymyr Zelenski, who has extracted tens of billions of dollars from the U.S.
NEVERTHELESS, TRUMP announced the beginning of negotiations yesterday with Russia, following Trump’s hour and a half phone call with Russian President Vladimir Putin, which will be followed by a face-to-face meeting later this winter.
UKRAINE WILL HAVE TO GIVE UP some territory in the east, but the White House believes the Ukrainian people are weary of the war and its huge casualties. How tough will this be? New Pentagon chief Pete Hegseth said yesterday that it would be “unrealistic” to expect Ukrainian borders to return pre-war status.
Chance of progress: 60 percent by summer.
GAZA-ISRAEL: Trump’s call for a resort in Gaza has been ridiculed in the Mideast, but we think the lethal threat of more Israel strikes on Hamas will eventually push force a truce.
THE MIDEAST KEY IS IRAN, which funds Hamas, Hezbollah and the Houthis. Israel is prepared to strike Iranian missile sites, including its nuclear facilities.
Chance of some progress: 40 percent, chance of a meaningful peace in the region: 20 percent.
GREENLAND: Perhaps the most intriguing geopolitical story is the very serious interest in Washington to annex Greenland, with its hoard of precious minerals and its sea lanes, both of which are coveted in the West.
THERE’S NO WAY THIS WILL BE RESOLVED MILITARILY, but there are rumblings in Washington that a few hundred billion dollars in payments could make a difference.
Chance of some type of deal: 60 percent; chance of a total U.S., takeover, 30 percent.
PANAMA: It’s increasingly likely that Panama could be bought off with a deal that reduces fees for ships that go through the canal.
Chance of some type of deal: 70 percent.
MEXICO: The country’s new leadership is anxious to cut a deal that commits Mexico to fighting drug dealers.
Chance of a deal: 60 percent, but not right away.
CANADA: Talk of a 51st state is ridiculous, it will never happen. Ottawa’s negations with Washington have been productive, but Trump won’t take yes for an answer; Canada has largely complied with Trump’s demands. The Canadian people are furious, and this dispute could last into the second half — or longer.
CHINA: Beijing’s fingerprints are everywhere — Latin America, Africa, the South China Sea, etc. China is desperate to jump-start its economy and will do whatever it will take grow. It’s impossible to overstate the antipathy in Washington toward China, and that friction is unlikely to improve.
BOTTOM LINE: Trump has inflated expectations with wild predictions; a Ukraine deal will not occur in one day, and tariffs will simply intensify trade disputes. But Trump is bold, and if he can broker a deal in Ukraine, the Nobel Peace Prize — which he covets — will be his.
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