Four septuagenarians—Trump, Putin, Xi and Modi—will renegotiate geopolitics over the next 12 months
Image Source: File Photo
In the vocabulary of grand strategy, 2025 will be a year in which great and rising powers will see no change in their ‘ends’ (core national goals), a continuing momentum in their ‘means’ (resources needed to achieve them), and a definite shift in global engagements around their ‘ways’ (actions to be taken to achieve national goals). Exhausted with physical wars, the related pain trickling down to average citizens and leading to humanitarian crises and the enfeebled International Criminal Court (ICC) ricochets, the instinct of warring leaders will be less confrontational, if not more collaborative. However, they will need strategic creativity to smoothen the wrinkles of aggression and salvage their positions in the face of military setbacks. The first quarter of the year will see positions harden before guns make way for butter, and by the second or third quarter, green shoots of peace will be visible. The last quarter will lay the foundations for a new normal focused on peace, economy, and trade.
The first quarter of the year will see positions harden before guns make way for butter, and by the second or third quarter, green shoots of peace will be visible.
Broadly, the year ahead will be a negotiation between four septuagenarians. As the president of the world’s most powerful democracy in his second term, Donald J. Trump, 78, will break new ground domestically with an emphasis on jobs and growth riding a less regulated, more efficient economy while pushing for a less violent world outside. As the head of a resource- and weapons-rich country, Vladimir Putin, 72, serving his 20th year as president, will employ a complex strategy of territorial expansion and calculated concessions, redefining success through a blend of dominance and strategic withdrawal. As the president of the largest authoritarian regime and the world’s second-largest economy, Xi Jinping, 71, will tone down geopolitical and trade aggression globally, and pay attention to the economy and internal confrontations. And Narendra Modi, 74, as the Prime Minister of the world’s largest and fastest-growing democracy, will help build bridges of negotiation, nudging the three great powers towards greater civility using strategic autonomy while maintaining India’s growth momentum.
Most world-changing ideas over the next 12 months will stream out of the White House, where Trump’s presidency of the US is expected to end the country’s extreme shift toward left-leaning domestic economic policies. He will also design a reversal from wars externally. Both will impact the world. His pronouncements around ending wars and “making America great again” may be bombastic, flamboyant, and high-pitched, but that’s his negotiating style; it gives him room to manoeuvre. Trump will wade into the waters of warring actors, now exhausted and seeking an end and will fill the vacuum of peace that the tired gladiators are desperately seeking. Trump’s skills will be particularly tested in the Russia-Ukraine war, where he will need to end the North Atlantic Treaty Organization’s (NATO) expansions and in Israel’s war with Iranian proxies where he will have to use a mix of persuasion and threat. It will be an uncomfortable, simmering peace in the short term, with a pathway to greater political stability ahead.
Narendra Modi, 74, as the Prime Minister of the world’s largest and fastest-growing democracy, will help build bridges of negotiation, nudging the three great powers towards greater civility using strategic autonomy while maintaining India’s growth momentum.
In his aim to make America great again, Trump is leaning on Elon Musk and Vivek Ramaswamy to make two big slashes—government expenditure and excess private sector deregulation. Both will serve the country well. Both will impact global capital. As the US becomes even easier to do business in, the world’s largest market will attract the best minds, the capital, and the wealth creators. This will put pressure on emerging economies such as India to reform its archaic regulatory architecture at a faster pace, but perhaps more on the European Union (EU) which is even more reluctant to curb such excesses. He also plans to impose tariffs on China, Canada, and Mexico. India is ready to negotiate. Ceteris paribus, this will increase prices in the US economy, leading to higher prices over the next 12 months and preventing a reduction of interest rates. Unless Trump finds a way to put money in the pockets of Americans, this may lead to a disappointed electorate which is already reeling under high inflation.
Beijing, which has adopted a defensive posture over recent months, will have to restart its game of snakes and ladders with more of the latter. Its dreams of world domination by weaponising its growth, trade, and GDP and territorial lust by attempting to normalise aggression, for instance, in the South China Sea, have defined the past five years. A slowing economy, a festering real estate bubble burst, and the global shift to find alternatives to cheap manufacturing, like Vietnam or India, will impact China. Even the potential invasion of Taiwan will remain a rhetoric at best and an encirclement at worst. In a direct geoeconomics confrontation with Trump’s potential tariff wars, Beijing is already seducing 33 African nations with a zero-tariff policy that grants duty-free access to 100 percent of their products. Nobody believes this will sustain, but over the first two quarters of 2025, this move will showcase globalisation with Chinese characteristics colliding with deglobalisation in the US.
Xi’s military aggression in the South China Sea, particularly in the Philippines, will subside for now. Its grand strategy of world domination will change spots from unchecked attacks to timid accommodations, but its relentless pursuit of new areas of control, particularly in the oceans, will continue as it devours critical minerals in seabed mining and becomes a rule-maker. On the Indian border, Xi’s recent overtures of disengagement seem to be the first steps towards peace and increased trade and direct flights. This has two tactical arms. First, an economic shift towards India as an alternative market to sell to and a manufacturing hub to export from. And second, to offset the political-strategic change in the US, which will see the two largest democracies get even closer once the lame-duck Joe Biden administration gives way to Trump’s. The last quarter of 2024 is already witnessing disengagement. The first quarter of 2025 may be underwritten by de-escalation. If things remain steady and Xi’s bipolar mood swings stay under control, this may be a precursor to direct India-China flights and greater trade and investments by 2026.
In a direct geoeconomics confrontation with Trump’s potential tariff wars, Beijing is already seducing 33 African nations with a zero-tariff policy that grants duty-free access to 100 percent of their products.
To live up to his image as the strategic grandmaster of the Russian Federation, Putin has made three action points. First, he has invaded and taken control of 1,200 sq km of Ukrainian territory, which he will not cede. Second, he has announced a lower threshold for a nuclear response if Ukraine used US weapons to strike deep inside Russia. And third, he made it clear that Ukraine joining NATO is a red line that must not be crossed. Trump has been listening. A status quo with Kyiv yielding territory to Moscow and the end of war is visible. For this, Putin seems readier than Ukraine President Volodymyr Zelenskyy. If US weapons support is off the table, or if the EU has to pay for it with members’ financial resources in a slowing and even recessionary economy, the pressure to end the war will rise. Kyiv will be forced to accept an uncomfortable peace. It will brood with discontentment. It might even sound unfair, however, overall, peace bridges with the promise of a US $500 billion reconstruction of Ukraine will begin by mid- to end-2025.
As part of peace negotiations, Putin will also demand an end to the March 2022 sanctions against Russia by the La Hulpe-headquartered SWIFT at the behest of the EU, the United Kingdom (UK), Canada, and the US. It was a major breach of the rules-based order to remove Russian banks from SWIFT in the first place—a move that has eroded the credibility of the institution and the Western governments controlling the world’s payments network. This negotiation will bring a hint of normalcy, even as other countries need to think about and negotiate an alternative payment system that is not controlled by Beijing. Putin will also demand the freeing of US $300 billion worth of Russian assets currently frozen by Western clearing house although he may give up on the US$3 billion annual interest accrued on them.
Modi has created partnerships of trust through strategic autonomy built over the past five to seven years with both the US and Russia.
Finally, New Delhi will remain an important player in global affairs in 2025. Not only will India continue to be the world’s fastest-growing large economy, adding almost US$400 billion in nominal GDP over the next 12 months, but it will also be an important player in geopolitics and security. Modi has created partnerships of trust through strategic autonomy built over the past five to seven years with both the US and Russia. He has pushed for and driven the peace narrative in both the Russia-Ukraine and Israel-Hamas-Hezbollah wars.
Converting this narrative into action may not be linear. While Putin and Biden were dragged down by their hardened stands, Modi has attempted to build bridges of conversation and diplomacy with both. This will continue through 2025. Of course, Trump has his own mind and style, while Putin remains a strategic player. At best, Modi can facilitate the discussions but the peace deal will have to be signed by Putin with the West. On the Israel side, again, Modi has built goodwill with several West Asian nations. Here, however, the stances, apart from being merely political or strategic, are fired by religious fervour and existential threats. It would be best for Modi to deliver his no-war moral support but step back from active negotiations. He should allow Trump, Israeli Prime Minister Benjamin Netanyahu, and Iranian Supreme Leader Ayatollah Khamenei to thrash out their peace deal that should begin with releasing Israeli hostages.
Outside the deal, New Delhi has, is, and will continue in 2025 to be one of the guardians of trade, particularly in energy, in the Indian Ocean Region. Here, a strategic collaboration with Washington will strengthen. On the Eastern end, India’s participation in the Quad will gather security momentum. Moreover Trump is ready to negotiate on economic deals for better security. For instance, his recent message to Mexico and Canada is to end illegal immigration and stop the passage of drugs, particularly fentanyl, into the US from their borders. In return, he would end the 25 percent tariffs on all their products.
Modi needs to set the domestic house in order with economic reforms such as around labour, compliances, land, and agriculture—the first two are possible; the last two need creative communication.
So, even though New Delhi is ready to engage with Trump’s tariff plaints, Modi can and must use India’s geopolitical leverage on security to negotiate a deal around the geoeconomics of tariffs. He must simultaneously leverage India’s growth towards building future bonds. Global companies that see India as the world’s third-largest economy over the next two or three years and a US$10 trillion powerhouse by 2032 will want to participate in this economy. The Trump-Modi conversations must enable this. Above all, Modi needs to set the domestic house in order with economic reforms such as around labour, compliances, land, and agriculture—the first two are possible; the last two need creative communication.
Beijing’s aggression dominated global affairs between 2019 and 2022. Moscow’s invasion of Ukraine drove 2022 and continues to do so. Terrorist attacks on Israel by Hamas and Hezbollah and Tel Aviv’s counter dominated 2023 and continue to. A hobbling Washington and a retreating Beijing underlined 2024. And it will be a new White House that will drive 2025. Over the next 12 months, the strategic economic community will need to keep a sharp focus on what transpires between Trump, Putin, Xi, and Modi.
Gautam Chikermane is Vice President at the Observer Research Foundation
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Gautam Chikermane is Vice President at Observer Research Foundation, New Delhi. His areas of research are grand strategy, economics, and foreign policy. He speaks to ...
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