The Tailwind Behind 2025
Exploring how the market changes in 2025
Summary:
New administration prioritizes strategic partnerships with global companies to rebuild US manufacturing capacity
Trade policy shifts from suppression tactics to incentive-based approach while closing tariff circumvention loopholes
Geographic focus pivots toward North American integration over traditional East Asian and European alliances
Social media policy changes reveal stark cost-of-living disparities between US and Chinese consumers
Political environment expects significant resistance from establishment amid accelerated policy implementation
Thoughts for 2025
The greatest change this year is Trump’s back-to-office.
1. Companies are dismantling DEI, and back-to-office is back in vogue. Change is expected. Biden administration is attempting with all its might to destabilise it by speedily putting forward all the Democrat’s agenda that is opposite to Trump’s intent, to box in and disrupt the new administration, with complete disregard to the impact of the American citizens that voted for the alternative. It is dishonourable and describes the divide that the American political class are vengeful and violent with complete disregard for the people’s choice and willingness to work across the aisle once the election result is determined.
2. Trump 2.0 is a lot more put-together and focused towards making America great again through concrete action of building up industrial capacity by partnering with the best in the world, disregarding political idealogy, unlike the Biden administration and Democrats cohort and potentially other politicians. He will focus on completing it as quickly as possible, often seeking a critical path, and will be willing to “sacrifice a rook” if necessary.
His interactions with the media and his behaviour at events were way more effective than before. You really should watch his interview with Jim Cramer. He’s not just winging it anymore. So, a lot of what people thought he’d do to China, like the Trump-China Tariff 1.1, which was to outdo Biden’s, would find themselves very wrong.
Trump 2.0 will be strategic and intentional. The focus would be to rebuild the US manufacturing industry to be highly effective and efficient and to become competitive. It would not be the Biden brand of suppression focus strategy, which Trump started in his first term. Much of the trade policy would include carrot and stick. The carrot would be inviting the best companies to set up onshore, repair the broken supply chain, build infrastructure, and be much less directed by political ideology, and behave more like a free world for capitalists. The stick will likely be for those that circumvent and arbitrage the tariff, such as Mexico and Canada, and all the China plus one country. All these channels would be shut down.
The perspective of rejecting the Nippon Steel acquisition differs greatly from Biden’s. To rebuild, the control of the material supply chain is critical. Elon Musk would have shared the need for vertical integration, which Trump would have understood being a real estate developer.
Trump is focused on building America. Mexico, Canada, Panama and Greenland are more critical than East Asia, Europe and the Middle East. It plays into the thinking of building from a foundation layer that is fully vertically integrated with neighbouring countries.
Restoring TikTok on inauguration appeased over 100 million American users without further infuriating them after the recent discovery by the TikTok refugees on XiaoHongShu, the reality in China from the cost of living to standard of living.
Americans are finding out first-hand, without a media filter, that corn from the US are sold in China at $0.94 per kg while they pay US$7 per kg at American supermarkets, besides other differences like medical bills and rental. Making people earning RMB10,000 (US$1,369) in China live as well as those in the US. In fact, the average yearly wage in China in 2024 was about RMB122k, according to National Bureau of Statistics of China. The US national average wage, according to the Social Security Agency, for 2023 was US$67k or RMB490k, much higher. Still, the cost of living, by comparing equivalent food and services, is significantly higher than in China.
Hence, Trump emphasised the importance of reducing inflation and inflated prices during the inauguration speech.
It wouldn’t be Trump if his actions and policies were extreme to the traditional imperialist club of the West, the lethargic bureaucrats on the hill, and shocking to the emerging world. There will be debates and resentment, especially from those fat cats that are marginalised in the US. Hence, the environment would remain volatile and, if he is successful, will have a strong outcome beneficial to the US.
And most importantly, he’s determined to make a lasting impact since he only has four years…
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