[ISAFIS Newsletter #2] Trump is Back in the Game: The 2025 Reinvention of America’s Isolationist Agenda
Written by: Natalie Grace Sierra Adi Staff of Research and Development
For decades, the United States has been a leading power in international relations and global trade (CFR, 2023). However, there has been a shift in the country’s foreign policy under Trump’s second tenure. Attempts at an “isolationist” American policy came hand-in-hand with these changes. Trump also did not hesitate to put US engagement on hold, even as China made serious attempts to take charge in international currency exchange and trade after America’s withdrawal. While it was meant to prioritise domestic interests, Trump’s strategy instead provided space for emerging powers to make the most of Washington’s retreat and annex the void left by America’s hand.
Trump’s “America First” Policies
In his first presidency, Trump only focused on cutting taxes, deregulation, and military spending; now he’s more determined to initiate aggressive cost-cutting policies to rationalize government operations and reduce federal spending. One of these measures includes giving buyout packages to federal personnel. The Office of Personnel Management (OPM) has approved these buyout offers which are guaranteed by payments designed to encourage voluntary retirements and layoffs capped at $25,000 (OPM, 2025). Musk’s subsequent appointment as head of the Department of Government Efficiency (DOGE), after making headlines for setting an ambitious target of cutting 1 trillion dollars from the federal budget, also did not come as a surprise. However, these constraints have also negatively impacted some foreign aid programs. The USAID received 15 million dollars from European partners like Sweden, Norway, and the Netherlands for aid programs directed towards developing countries with low economies, which have not been utilized because of the funding halts (USAID, 2025). This has made some other nations lose trust in the US as a dependable financial ally, which could be detrimental for US diplomatic efforts.
On January 20, 2025, President Trump signed an order unbinding the US from the World Health Organization (WHO) and the Paris Climate Agreement. Trump justified his second Paris Agreement exit as a necessary means to protect the American economy from what he claimed were ‘unreasonable’ demands on industry. This was on the heels of the WHO exit that stemmed from his discontent with the manner in which the organization dealt with the COVID-19 pandemic. Trump’s decision will come into effect on January 22, 2026. In his first term, Trump pulled the US out of the WHO mainly because he felt the WHO was too soft on China and that its Director-General, Tedros, had covered up China’s responsibility in the COVID-19 pandemic. The United States, because of these changes, is now less present at international forums, allowing other nations to take the lead on global issues; for example, countries such as China have accelerated their pledges to cut carbon emissions and invest in green power.
The United States has set tariffs for imported goods from China, Mexico, and Canada in the first months of 2025 in an attempt to protect domestic industries. The sudden taxation from the US government has caused uncertainty in the economy, which makes it difficult for companies to predict long-term trade policies and maintain stable supply chains. This uncertainty could lead investors to choose industries or countries with more stable policies over high-risk markets as a result of this volatility. Consequently, companies will be more cautious in their choices by thinking about lowering production, or even moving operations to avoid the effects of these tariffs. In addition to future difficulties for the US economy, these actions risk hurting US influence internationally, as allies and trading partners may look for more reliable markets.
Conclusion
By introducing tariffs, cutting foreign aid, and withdrawing from multilateral agreements, Trump’s policies of “America First” are completely different from the past decades of the US being a global power. The US’s indifference is, in fact, enabling these countries to strengthen their position in the world and take a more active part in international relations. This so-called “indifference and protectionism”, claimed to be in America’s best interest in fear of being entrapped in costly foreign affairs, may be a sign that Trump never learned from the Great Depression and the interwar crises, which were caused by the same exact reason.
In the meantime, Indonesia could position itself as a growing manufacturing and investment centre for the industry, given its resources and large labour force. Though it’s important to note that Indonesia isn’t the number one beneficiary of America’s production in Southeast Asia, Vietnam gains more as a manufacturing hub for electronics and textiles (USTR, 2024). Even so, this does not close opportunities for future growth. Indonesia should implement a consistent legal policy on investments that builds investor confidence by minimizing bureaucratic complications and prioritising sectors such as tourism and energy.
References
Office of The United States Trade Representative. (2024). Vietnam. https://ustr.gov/countries-regions/southeast-asia-pacific/vietnam
Office of Personnel Management. (n.d.). Voluntary separation incentive payments. https://www.opm.gov/policy-data-oversight/workforce-restructuring/voluntary-separation-incentive-payments
Paul, Carmen. (2025, January 28). Trump’s beef with the World Health Organization is personal.
The White House. (2025, January 20). Putting America first in international environmental agreements. https://www.whitehouse.gov/presidential-actions/2025/01/putting-america-first-in-international-environmental-agreements/
The White House. (2025, January 20). Withdrawing the United States from the World Health Organization. https://www.whitehouse.gov/presidential-actions/2025/01/withdrawing-the-united-states-from-the-worldhealth-organization/
U.S. Agency for International Development, Office of Inspector General. (n.d.). Implementer reporting. https://oig.usaid.gov/implementer-reporting
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