While America's military and economy remain exceptionally strong, its political system is more dysfunctional than that of any other advanced industrial democracy … and in 2024 faces further weakening. The US presidential election will worsen the country's political division, testing American democracy to a degree the nation hasn't experienced in 150 years and undermining US credibility on the global stage.
The US political system is remarkably divided, and its legitimacy and functionality have eroded accordingly. Public trust in core institutions—such as Congress, the judiciary, and the media—is at historic lows; polarization and partisanship are at historic highs. Add algorithmically amplified disinformation to the mix, and Americans no longer believe in a common set of settled facts about the nation and the world.
The two major parties' likely presidential candidates are uniquely unfit for office. Former President Donald Trump faces dozens of felony criminal charges, many directly related to actions taken during his term in office, most critically including his efforts to overturn the results of a free and fair election. In any stable, well-functioning democracy, the 2024 contest would be principally about those. The United States is presently far from that. On the other side of the aisle, President Joe Biden would be 86 years old at the end of his second term. The vast majority of Americans want neither to lead the nation.
This division will worsen in the run-up to the election. From the moment he secures the nomination (not guaranteed, but overwhelmingly likely), Trump will hijack Republican and American politics, as even the most reluctant of Republicans in Congress—and most conservative media, activist groups, and monied interests—will fall in line with him. His policy pronouncements—however outlandish—will shift the national narrative and shape the policy direction on Capitol Hill and in statehouses across the country before a vote is cast. The result will be even more policy extremism, division, and gridlock.
Knowing he faces prison time if he loses in November, Trump will use his online pulpit, control of the Republican Party, and friendly media to delegitimize both the system that is prosecuting him and the integrity of the election. His victim narrative and preemptive claims of fraud will find a receptive audience of Americans who agree, putting implicit pressure on Republican state governments and election officials to manage the election in ways that would benefit him (such as by purging voter rolls more liberally or tightening voting restrictions). While these efforts are unlikely to overturn the electoral process, they may well disrupt it.
And they are sure to persuade many of Trump's supporters to doubt the election outcome's legitimacy—a problem that will be exacerbated by AI-fueled disinformation and social media echo chambers (please see Top Risk #4).
In a world beset by crises, the prospect of a Trump victory will weaken America's position on the global stage as Republican lawmakers take up his foreign policy positions and US allies and adversaries hedge against his likely policies. US support for Ukraine will face stronger headwinds on Capitol Hill, straining the transatlantic alliance and leaving Ukrainians and their frontline European supporters in the lurch. Kyiv will take increasingly reckless actions to make what gains it can before the next president takes office, while hopes for a definitive end to US aid in 2025 will stiffen Russia's resolve to keep fighting (please see Top Risk #3). In the Middle East, Trump's prominent support for Israel and willingness to bomb Iran for transgressions will embolden Israeli Prime Minister Benjamin Netanyahu and limit Biden's political space for policy maneuver. Pressure from congressional Republicans, meanwhile, will make it politically harder—albeit not impossible (please see Red Herrings)—for Biden to preserve the “thaw” with China this year. The shadow of Trump will lead US allies and adversaries to brace for his return to office, with destabilizing consequences long before Inauguration Day.
If Trump wins the election, Biden will concede. But while Democratic leaders may be less likely to claim the election was “rigged” than the former president, they will still treat Trump as illegitimate, believing he should be in jail and is unfit for office. Some congressional Democrats will likely vote against certifying his election on the grounds that he is not qualified to serve under the 14th Amendment, undermining trust in American electoral institutions. The response in major cities would be a repeat of the massive street protests during the 2016 presidential transition, but in a country even more bitterly divided and with an opposition coalition more convinced that Trump 2.0 beckons the end of American democracy. Whether driven by extremist elements, clashes with counter-protesters, or opportunistic bad actors, widespread violence is a real (and indeed nearly inevitable) risk. The danger will intensify over the course of a Trump administration as he pardons those arrested for storming the Capitol on 6 January, allowing them to return to their quasi-militias and organize against what they see as elite leftist institutions.
If Trump loses, he won't accept defeat. Instead, he will do everything in his power—legal or illegal—to contest the outcome and impugn the legitimacy of the process. He has fewer options for challenging the results than he had as president in 2020, owing to the passage of the Electoral Count Reform Act and the fact that he's not the incumbent. But that will not stop him from trying—especially not when he faces the prospect of prison time. He will allege mass fraud once again. He will incite widespread intimidation campaigns against election workers and secretaries of state in both red and blue states, demanding that they “find” extra votes for him. He will lean hard on Republican governors to submit slates of Republican electors in states Democrats won. And he will pressure Republican senators and representatives to object to states' slates of electors to disqualify Democratic electoral college votes. While none of these efforts is likely to succeed, they will inflict damage on already low public confidence in the integrity of America's democratic institutions.
Barring an unlikely Democratic landslide, Republicans are poised to see a Biden win as illegitimate, alleging either that the election was “stolen” or that politically motivated investigations made it more difficult for Trump to campaign. They will see Trump's incarceration during the Biden administration as Democrats jailing the opposition leader for political purposes. This could create an unprecedented political crisis, destroying the remaining trust in federal institutions Republicans still have and leading to calls for Biden to pardon Trump the same way Gerald Ford pardoned Richard Nixon to avoid national disunity. While large-scale violence is less likely in this environment, America's political divide would deepen, and the nation's fragmentation into red vs. blue states, cities, and towns would accelerate.
And then there's the tail risk (unlikely but plausible) that you'd rather not think about: What if the world's most powerful country is unable to hold a free and fair election on 5 November? Efforts to subvert the election could come from cyberattacks, deep fakes and disinformation, physical attacks on election process and oversight, and even terrorism to disrupt voting on the day. There's no more geopolitically significant target than the upcoming ballot—a softer and more vulnerable target than most homeland security challenges—with plenty of foreign (and more than a few domestic) adversaries that would love nothing more than to see more chaos in America.
The United States is already the world's most divided and dysfunctional advanced industrial democracy. The 2024 election will exacerbate this problem no matter who wins. With the outcome of the vote essentially a coin toss (at least for now), the only certainty is continued damage to America's social fabric, political institutions, and international standing.
TRUMP: The final season?
What if he wins again?
Trump's 2016 upset was met with horror from the American left and concern from allied world leaders, but generally positive reactions from American business leaders and optimism from global financial markets, which saw the lower taxes and deregulation of a Trump administration as a net positive for the US economy. The response next time around would be significantly more troubled, as a second Trump administration would have fewer guardrails than the first, reduced fiscal space, and more radical policy divisions among US states following eight additional years of polarizing politics.
A second Trump administration would take steps to consolidate executive power, weaken checks and balances, and undermine the rule of law. Trump would try to capture federal institutions by purging thousands of civil servants he sees as obstacles and replacing them with inexperienced loyalists. Much of a second Trump cabinet would be senior Republicans: Former cabinet members Nikki Haley, Robert Lighthizer, and Mike Pompeo—known as capable within the broader policy community—are all likely to return. Key policy risks from the cabinet would include trade protectionism—with goals of broad-based 10% import tariffs and stripping most favored nation status from China—and unpredictability from the Department of Defense, where appointed leadership will be comprised of political loyalists more like Mike Flynn than Jim Mattis. At the same time, a core of Trump's policy advisers in the White House (including the likes of Steve Bannon, Stephen Miller, and Kash Patel) would have virtually no relationships with elite business leaders or foreign dignitaries—and limited willingness to prioritize an audience with them.
Having gutted the “deep state,” Trump would be less constrained to break the rule of law. His first order of business would be to weaponize the FBI, the Justice Department, and the IRS to block proceedings against himself and his allies and persecute his political enemies. Biden and his family would be in the crosshairs, but how far this revanchist McCarthyism goes—to opposition lawmakers, media figures, donors, critics—is a question of enormous import, especially in its signaling importance to determine behavior across the political spectrum, at best chilling political dissent and at worst squelching it nearly entirely.
There would be little remedy at the federal level to restrain a second Trump administration if it acts lawlessly. A divided or Republican-controlled Congress would be unable and unwilling to check Trump's executive excesses, with impeachment and removal off the table even under a Democratic Congress. While a conservative Supreme Court, one-third of whose members were appointed by Trump, would remain independent, it would have limited power to enforce its rulings against a renegade president, setting up the potential for a constitutional crisis the likes of which America hasn't seen since the end of the Civil War.
The decentralized nature of the US system would remain a counterweight to dysfunction in Washington, as a weaker federal government would devolve power to the states and allow a free market of competing political and economic strategies to flourish. The flipside of this decentralization is that red and blue states would continue to grow polarized, not just on policy but increasingly in terms of who they attract to live, do business, and invest. This would create a fractured business and investment environment that would be difficult for companies to navigate as policies and regulations diverge from state to state and their choice of location becomes an implicit political statement (please see Top Risk #10).
Foreign companies would have a harder time understanding the political geography of America and spend more time trying to get on the good side of Trump's political apparatus. Relationships across the federal government—and particularly with Republicans who have Trump's ear—would become essential for foreign governments, even more so than they were in the first term. And investors are likely to see massive opportunities in deregulated industries but grow increasingly concerned about the US fiscal picture.
However positively markets may view its concrete policies, a second Trump presidency—with all its personalistic, authoritarian, and mercurial tendencies—would deal grievous harm to US democracy. It would also begin to raise foundational questions about the long-term stability of the US as an investment destination, the trustworthiness of its financial promises, the credibility of its commitments to foreign partners, and the durability of its role as the lynchpin of the global security order.
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