As President-elect Donald Trump prepares for his second term in office, he faces high expectations from American voters, but the road ahead will not be easy. From the moment he takes the oath of office on January 20, Trump will confront a host of challenges, especially on the economic front, which was a key issue during his campaign. High inflation and rising grocery prices were top concerns, and Trump promised relief.
However, the reality may not match his campaign promises, according to Ed Hirs, an energy fellow at the University of Houston. Trump has proposed imposing tariffs of up to 25% on imports from major trading partners like Mexico and Canada, which could lead to higher prices for U.S. consumers. Hirs explained that if manufacturers face higher import costs, they will likely pass those costs onto consumers, driving up prices across various sectors, not just food and retail.
The trade relationship between the U.S., Mexico, and Canada, valued at about $1.8 trillion annually, means that any tariff hikes could have wide-reaching effects, including on oil imports from Canada, which the U.S. relies on for millions of barrels daily. Trump’s promises to lower prices may be stymied by the tariffs’ inflationary impact. Even though Trump expressed optimism that a better supply chain could help lower costs, he acknowledged that reversing price hikes is difficult.
In addition to economic concerns, Trump has vowed to overhaul U.S. immigration laws, starting with mass deportations and ending birthright citizenship. Hirs warned that such moves could have serious economic consequences, particularly in industries that depend on low-wage, manual labor—sectors like lawn care, dishwashing, and oil field work in places like Texas. The deportation of millions of undocumented workers could drive up labor costs across the nation, especially in sectors that struggle to find workers willing to take on such jobs.
On the international stage, Trump is hoping to rebuild ties with China after the strained relationship during his first term, exacerbated by the COVID-19 pandemic. He has hinted at revisiting his trade war with China, potentially ending China’s most-favored-nation status and imposing tariffs on Chinese imports, which could spark another trade war and disrupt global supply chains once more. Hirs cautioned that this could result in skyrocketing inflation, as it did during Trump’s first term.
Trump’s foreign policy will also come under scrutiny, particularly his stance on the ongoing Israel-Palestine conflict. His strong support for Israel, including his recognition of Israeli sovereignty over the Golan Heights, has raised questions about how he will handle the Gaza Strip crisis, where thousands of Palestinians have been killed. Trump’s approach will be closely watched by both domestic and international observers, especially given the heavy humanitarian toll the conflict has taken.
The war in Ukraine, another pressing international issue, will also be a focal point for the incoming administration. Trump has expressed a desire to facilitate peace talks between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy. While Trump has called for an end to the war, Hirs pointed out that the U.S. has no obligation to intervene directly, and if Trump steps back from international leadership, countries like Russia, China, or the European Union could step in, potentially diminishing U.S. influence on the world stage.
Domestically, Trump’s stance on climate change remains a point of contention. He has repeatedly called it a hoax and promised to roll back policies aimed at reducing greenhouse gas emissions, such as those outlined in the Inflation Reduction Act (IRA). However, Hirs noted that many Republican districts benefit from clean energy investments, making it politically difficult for Trump to eliminate these tax breaks. The energy transition is a powerful force, and while Trump may slow it, he cannot reverse it entirely.
As Trump’s second term approaches, his administration will face an array of critical issues—from domestic economic challenges to foreign policy decisions. His ability to navigate these challenges, all while managing scrutiny from both critics and allies, will define his presidency. Ultimately, the American electorate will have their say in the 2026 midterms, determining the balance of power in Congress and providing a clearer picture of Trump’s effectiveness in addressing these complex issues.
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