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Andy's Bi-Weekly Global Political Insights

Trump’s 3D Chess Game

26th November, 2024

Trump’s 3D Chess Game

Years ago, when we started with our Global Political Analysis publication back in 2008, I wrote about professor Joseph Nye's 2002 “3D chessboard” framework for looking at international relations. It remains a useful tool for analyzing the interplay between (geo)politics, economics and financial markets. However, geopolitical and technological developments over the past two decades have significantly changed how the chessboard looks. Here’s an overview of the changes across the three boards:

The Military/Defense Board

Then: The first board traditionally represented state-centric hard power. Post-Cold War, the U.S. held a dominant position, with military power being the ultimate tool for global influence.

Now: This board is seeing a multipolar shift, with China and Russia aggressively challenging U.S. military dominance. Cybersecurity and space warfare have emerged as critical dimensions, transforming traditional military paradigms. Private entities like SpaceX now contribute significantly to defense, blurring the line between public and private roles in military power.

The Economic Board

Then: Economic interdependence was championed by globalization, with institutions like the WTO and IMF stabilizing markets and promoting free trade.

Now: Fragmentation is evident. The U.S.-China trade war and sanctions on Russia illustrate the politicization of trade. Meanwhile, cryptocurrencies and blockchain-based finance challenge traditional economic systems, with techno-libertarian ideals reshaping global commerce and regulatory landscapes.

The Transnational Relations Board

Then: This board captured soft power, where global non-state actors, including NGOs and multinational corporations, influenced issues like climate change and human rights.

Now: The influence of Big Tech on this board has exploded. Companies like Meta, Google, and Tesla act as quasi-states, leveraging their platforms and technologies for global influence, bypassing traditional governance through tools like AI, crypto, and freeports.

Techno-Libertarians taking over?

The proliferation of techno-libertarian ideals aligns with a diminished role for traditional state power, particularly on the transnational board. Silicon Valley billionaires like Elon Musk and Peter Thiel challenge conventional governance. Examples like the privately governed Próspera, and calls for nation-states to show "humility" before tech giants, reinforce the shift toward extraterritorial digital sovereignty.

The transformation on all three boards highlights a consolidation of power by private actors, particularly in defense (SpaceX and AI), economics (crypto), and transnational influence (platforms like X).

Implications for a Second Trump Term

Since the US is still the most powerful and largest economy in the world and the tech titans mainly operate from America, let’s have a look at what the aforementioned developments could mean for Donald Trump’s upcoming presidency through the lens of the 3D chessboard:

First Board: Military/Defense

  • Shift from Multilateralism to Bilateralism: A second Trump administration would likely continue prioritizing "America First" policies. This approach may result in reduced commitments to NATO and other multilateral alliances and a shifting focus toward bilateral agreements. Defense analysts highlight increased reliance on private-sector military contractors (e.g., SpaceX’s role in defense and satellite technologies) and the militarization of emerging domains like cyberspace and space.
  • China and Russia as Primary Competitors: Escalating tensions with China and Russia are expected to dominate military strategy. Trump's previous term saw an emphasis on countering Chinese tech and military ambitions; this will likely intensify. Many experts – including the Atlantic Council - predict more aggressive measures in the Indo-Pacific, with potential investments in hypersonic weapons and advanced missile defense systems.
  • Resource Allocation to Technology: Artificial intelligence (AI) and quantum computing are seen as critical. Military spending would shift increasingly toward tech innovation, reinforcing the integration of the private sector into defense strategies.

Second Board: Economics

  • Deregulation and Tax Cuts: Deregulation will likely accelerate, benefiting sectors such as energy, finance, and technology. Investment banks, including Goldman Sachs and JP Morgan, predict short-term GDP growth spurred by corporate tax cuts and reduced regulatory burdens. However, many analysts also caution that fiscal deficits could balloon, increasing already worryingly high U.S. debt levels. This could strain the bond market and potentially raise long-term interest rates.
  • Trade Wars Redux: Trump 2.0 will see renewed trade conflicts, particularly with China, the EU, Canada, and Mexico. Tariffs will be used as tools to protect domestic industries, disrupting global supply chains. This could trigger (further) deglobalization, shifting global trade patterns and reinforcing regionalism.
  • Emerging Markets and Tech-Driven Economies: Cryptocurrency, fintech, and blockchain will gain favor. Deregulation in these areas could accelerate innovation but also pose risks of market instability, as highlighted by consultancies such as McKinsey.

Third Board: Transnational Relations

  • Big Tech as Quasi-Governmental Entities: Companies like Meta, Tesla, and Amazon are expected to play (even) larger roles in shaping global communication, commerce, and governance as Trump may empower corporations further, prioritizing their interests over traditional allies. The transnational chessboard, dominated by Big Tech, reflects a growing shift from state-centric to corporate-centric influence. Silicon Valley's ability to bypass traditional governance structures aligns with the techno-libertarian trends highlighted in analyses by academics like Jonathan Taplin and think tanks like Brookings.
  • Climate Policy Rollbacks: Environmental deregulation will likely prevail under Trump. Withdrawal from international agreements like the Paris Accord could be reinstated, further weakening global cooperation on climate change. Research from institutions like the World Resources Institute suggests this will seriously exacerbate global environmental challenges.
  • Fragmentation of Global Governance: The proliferation of "digital sovereignties" and privately governed spaces (e.g., freeports, crypto zones) will probably accelerate.