It is not uncommon for business leaders, driven by near-term profits, to prioritize immediate benefits over long-term costs. Such short-termism is often the result of incentives that deprioritize investments in future productivity, as well as in climate and environmental sustainability, to maximize quarterly profits. But there are consequences to valuing short-term gains over long-term competitiveness or sustainability—both for individual firms and the wider public. Research, for example, shows that companies that eschew short-term market pressures enjoy stronger revenue growth, higher earnings, and superior profits over time.
But it is not just the market that suffers. For years, American political, military, and foreign policy leaders have lamented short-termism in the private sector as a detriment to the country’s long-term security, competitiveness, and resilience. CEOs have routinely juiced quarterly results at the expense of national security or future capabilities, prioritizing the needs of their shareholders over those of the country or global stability. Major stock buyback programs by defense companies, for instance, have routinely drawn criticism from senior military leaders worried that they take resources from investments that could have otherwise helped outfit airmen, soldiers, and seamen with the tools needed to better confront a future enemy. Cuts to private research and development can reduce the industrial base’s future productivity, just as cuts to investments in efficiency and sustainability can increase the long-term costs of climate change and worsen environmental degradation.
For the past several decades, this ethos of short-termism was largely contained to corporate America. Though they didn’t always get it right, statesmen of both major political parties routinely considered the long-term security interests of the country, thought decades into the future, and tried to position the United States for lasting prosperity. The Marshall Plan was particularly farsighted; so too was the United States’ investment in multilateral institutions, which despite being frustratingly bureaucratic, helped keep great-power conflict at bay. President Dwight D. Eisenhower’s investment in the interstate highway system and his “Atoms for Peace” program similarly put near-term resources toward ensuring future prosperity and security. More recently, the Paris climate accord created a global structure to align decarbonization efforts to the benefit of everyone—including future generations. These were not short-term, nationalistic enterprises; they were long-term investments designed to outlast the men and women who created them.
The Trump administration’s foreign policy—particularly its trade policy—represents not only a rejection of this sort of statesmanship but also the embodiment of corporate short-termism in government. The American president, schooled in the dynamics of high-end real estate and corporate culture, has pursued what seems like a “me first, damn the future impacts” approach to international relations. It is a strategy that may be recognizable to corporate titans, but one that has greatly undermined the country’s future security and prosperity. Put simply, Trump’s posture toward foreign leaders, his administration’s tactics, and his coercive undertones come with long-term costs that will burden future leaders with a world decidedly tilted against American interests. It is short-termism at its worst, particularly because the near-term “gains” Trump has achieved often have been a positive headline, announcing what appears to be a one-sided “win” for his administration—or the enrichment of his own family—rather than actual benefits for the American people.
Trump’s posture toward foreign leaders, his administration’s tactics, and his coercive undertones come with long-term costs that will burden future leaders with a world decidedly tilted against American interests.
Indeed, few Americans are likely to think that paying an additional $1,750 annually to pay for Trump’s massive new tariffs is a “win” for their families. In fact, a full 60 percent disapprove of Trump’s tariffs, according to a January poll by the Pew Research Center. Nor will the 166,000 working-class Americans whose jobs were lost during Trump’s second presidency have much to celebrate. As Trump holds the gold bar he received from a group of Swiss business leaders ahead of his trade deal with Switzerland, investment in American manufacturing is plummeting and small-business bankruptcies are surging.
The contrast between a short-term “win” for the president at the expense of long-term consequences for the American public and U.S. national security was laid bare when the Supreme Court overruled Trump’s illegally imposed tariffs under the International Emergency Economic Powers Act (IEEPA). One highly doubts that Trump will give back the gold bar or any of the other personal gifts he’s received—nor, as it turns out, does the administration seem inclined to provide refunds to the importers who paid tariffs under Trump’s now illegal use of IEEPA. The president seems to have gotten what he wanted from his “deals” with other countries. The chaos, loss of market share for American exporters, and perceived unreliability now facing U.S. companies abroad might as well be chalked up as collateral damage. Except, of course, it is not. It has very real long-term costs that will negatively affect the country, and the world, for years to come.
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Upending the strongest bilateral relationship in the world
Perhaps the best example of the Trump administration’s short-term, headline-chasing leadership resulting in lasting costs for the American people is his handling of the United States’ relationship with Canada. Not only is Canada historically the largest trading partner of the United States, but the two countries have maintained the world’s longest undefended border for more than a century. Canadians have fought alongside Americans in every major war for generations. Canada’s industry has developed alongside, and often in support of, the capabilities of U.S. producers; its resources fuel U.S. factories; and its citizens routinely visit the United States as tourists, bringing in billions of dollars of revenue every year. When President Franklin D. Roosevelt needed a place to negotiate and ultimately sign the Atlantic Charter in 1941, he turned to Canada as host.
Yet within weeks of taking office, the second Trump administration destroyed the trust and amity that defined the U.S.-Canada relationship for decades. The administration’s constant tariff threats have pushed Canada to seek out new partnerships to diversify its economy away from the United States. This hurts not only the American importers that rely on Canadian supply chains but also the countless American producers that sell products made in the United States into Canada. The Canadian military is diverting resources to plan for a potential U.S. invasion—rather than focusing on a Russian assault on the Arctic or strengthening its cooperation with the United States against other common foes, both now and in the future.
In the near term, Canada’s diversification away from the United States can be seen in its recent electric vehicle (EV) deal with China. The deal will see an initial 49,000 Chinese-made EVs enter the North American market, with the number increasing to 70,000 over five years. Under former President Joe Biden, Canada worked closely with the United States to align standards and incentives to build a strong regional EV market. But Trump’s belligerence, which has delivered next to nothing from Canada, has resulted in Canada seeking out other partners on which to base its future prosperity. Canadian Prime Minister Mark Carney’s speech at Davos, noting a “rupture” in international relations and calling for “middle powers” to band together must be read in this context—and so too must his work to create a massive trade union between the European Union (with which Canada has an existing free trade agreement) and the Trans-Pacific Partnership (of which Canada is a founding member).
In the longer term, the consequences could be even more significant. As Canada shifts its networks elsewhere, it is not inconceivable that trade through the St. Lawrence Seaway will increasingly deprioritize American goods. Canada’s steel and aluminum could increasingly support Chinese EV production, and its vast natural resources—including the world’s largest deposits of potash and uranium, as well as large quantities of lithium, cobalt, and nickel—could be diverted from U.S. factories to those in Europe, India, or Southeast Asia where Canada has free trade pacts already in force. And if the United States were to find itself in a military confrontation, it is not hard to imagine Canada choosing to avoid involvement, as it may be too politically unpopular to support a neighbor no longer viewed as trustworthy or that espouses different values. Notice, for example, that despite avoiding open criticism of the Trump administration’s decision to start a war of regime change in Iran, Prime Minister Carney was careful not to commit Canadian resources to the effort. And what did the Trump administration accomplish for this? Canada created a fentanyl czar to stop the one-tenth of 1 percent of illegal fentanyl that comes into the United States from Canada.
Shattering trust with Europe
The Trump administration’s relationship with Europe is similar. The administration’s deal with the European Union in the summer of 2025 (agreed to at one of Trump’s golf courses) occurred following its unprecedented tariff threats, its eager embrace of far-right movements, its coziness with Russia, and its attacks on democratic values. Trump may have been “successful” at locking in 15 percent tariffs on imports from the European Union—to the extent that forcing American consumers and businesses to pay more for parts, materials, and products sourced from a traditional ally is a success. But the European Union’s reactions to the deal showcased the true, long-term cost. EU officials consistently used words such as “capitulation,” “blackmail” and “coercion” to describe the deal, indicating considerable damage to the trans-Atlantic alliance—and this was before Trump’s threats against Greenland sullied the relationship even further.
The administration may have gotten the headlines it wanted—tariffs on EU imports, a dubious commitment by the EU to purchase billions of dollars of U.S. oil, liquefied natural gas, and nuclear fuel, as well as an EU pledge to invest in the United States—but the near-term “benefits” must be weighed against very real long-term costs. Europe is affirmatively reorienting its market away from the United States. The United States is losing a longtime partner capable of pushing back against China’s predatory export policies. Said another way: Trump’s successors, and all Americans, will be living with the consequences of his deal with the European Union for some time through slower economic growth, lost trust, a disaggregated defense industry, and a world where once-partners increasingly hedge against U.S. interests. That’s quite a price to pay.
Within weeks, European leaders were openly discussing the need to reassert their “independence” from the United States, threatening to invoke their anti-coercion mechanism against the United States, and signing new trade deals with India and Mercosur that will reduce the market share currently enjoyed by U.S. producers across a range of sectors, including agriculture, aerospace, and technology. And now, following the Supreme Court decision to overrule Trump’s use of IEEPA to impose tariffs, the European Union is pausing its ratification of its trade deal, making its commitments to further market access and its purchase commitments even more unlikely to occur.
Moreover, the European Union’s major new investments in its defense industrial base, driven in part by Trump’s distaste for NATO and his threats against Greenland, will now largely exclude U.S. producers. No doubt this will have a near-term economic impact, as U.S. defense companies are left out, but longer term, it stands to create a misalignment between the capabilities of European militaries and those of the United States. That is hardly unimportant. Militaries that buy together tend to fight together, while militaries that procure separately can see their allegiances more easily shifted.
Pushing Asian partners toward China
The Indo-Pacific too has faced Trump’s short-termism, with similar long-term consequences for U.S. security interests in the region. Trump’s consistent attacks on the United States’ treaty allies in the region—South Korea and Japan—may have resulted in new trade deals, locking in double-digit tariffs on their products entering the United States. Even if one assumes that this is a policy is a win for the United States, which it is not, the cost has been monumental, reshaping the future of economic and diplomatic engagement across the Indo-Pacific. Both Korea and Japan have already announced new partnerships with Beijing, helping align on regional trade.
Neither country now views the United States as a reliable partner, and neither is likely to change their opinion anytime soon. The office of Japan’s prime minister is even said to be contemplating the need for the country’s own nuclear weapons, unable to rely on the United States for its essential security going forward. It is a sentiment felt by numerous countries around the world, including Germany, South Korea, Australia, Poland, Czechia, and Saudi Arabia. That is a hefty cost for a “deal” that delivers so little value to American workers, consumers, or national security.
Trump’s deal with India offers another good example. The administration will champion that it convinced India to remove its many nontariff barriers on U.S. exports—although that is a unconvincing claim at best. And it will highlight that imports from India will receive an 18 percent tariff when entering the U.S. market. But to the extent that such a deal is a win for the Trump administration, it is a shallow, costly one. The deal only came together after India had agreed to a much larger, more impactful trade deal with the European Union that itself only occurred because Trump had imposed 50 percent tariffs on Indian goods (likely in retaliation for not supporting his Nobel Prize bid).
In fact, Trump has done so much damage to the U.S.-India relationship that Indian Prime Minister Narendra Modi visited Beijing for the first time in seven years to cement a partnership with China as a hedge against Trump’s coercion and also welcomed Russian President Vladimir Putin to Delhi to secure additional Russian backing. Even Trump’s claim that India will stop purchasing Russian oil is widely doubted by experts. The reality is that the Trump administration’s actions toward India have reenergized anti-American sentiment in India, calling into question the trustworthiness of the United States, which U.S. diplomats have spent the past three decades trying to prove.
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A more isolated United States is a weaker United States
When Indian and South American agricultural products flow into Europe in the coming years, replacing U.S. suppliers, American farmers and ranchers will likely come to regret the deals the Trump administration has negotiated. So too will future presidents regardless of party, who will need to engage leaders in Brussels, Berlin, Ottawa, Tokyo, Seoul, Canberra, New Delhi, and elsewhere who will increasingly see their futures untethered from the needs, goals, and aspirations of the United States. And for what? Headlines that make Trump look tough and dubious investment pledges that are unlikely to be fulfilled?
And it’s not just future diplomats who will pay the price of the administration’s short-termism. Foreign manufacturers will enjoy better trade terms in each other’s markets than their American counterparts. Others will decide international standards and shape the future of global commerce. Travel from abroad to the United States will be replaced by foreign travel to other, more hospitable destinations, having lasting consequences for the American tourism industry. While much of the world’s attention on Trump’s trade policy will revolve around the Supreme Court’s recent decision, it is important that these long-term consequences are well-understood.
It is as if the rest of the free world created a new group chat with the express purpose of leaving out the United States—as long as it is governed by the Trump administration. It is unclear what will come of the discussion, but its impact on the future of international engagement will be significant. A future American president hopefully will be invited to join the chat, but he or she will need to regain the trust of everyone involved, and that will take a lot of time and deeds. Such is the cost of broken trust, toxic nationalism, and the Trump administration’s disregard of essential values.
Trade negotiations, and international affairs more broadly, are challenging at the best of times. And modifying and updating global trade rules is long overdue. But how leaders negotiate matters. Each time the administration seemingly bullies, embarrasses, or coerces a sovereign nation into a deal, the costs add up—and they grow over time. Americans will deal with the consequences for years to come. If corporate short-termism is bad for industry, the Trump administration’s trade policy shows that it’s disastrous in government.