It began with a colossal row between tiny Colombia and the United States. Within hours, Colombia, faced with the threat of 25 per cent tariffs on all its exports to the United States, its main market, caved in. By moving so aggressively against Colombia, has President Donald Trump just flagged his intent to establish an imperial presidency — one that makes no concessions and is willing to strong-arm both allies and enemies? Is this the beginning of an era where the US becomes the unchallenged global superpower, refusing concessions to anyone?
Yet Trump’s showdown with Colombia was almost eclipsed a few hours later by a second major event that threw Silicon Valley’s giants and Wall Street into chaos. A little-known Chinese company, DeepSeek, shook the tech world by unveiling its R1 AI model, created with just $5.6 million. This new platform threatens to rival giants like OpenAI and Anthropic, which have poured hundreds of millions of dollars into their own complex models.
For the US, AI has been a key area where it believed it held an unassailable lead over China. The US had even stopped selling chips to China needed for AI to ensure that the Asian giant couldn’t catch up. Now the field has suddenly and dramatically levelled out.
Opinions on DeepSeek vary. Some users call it fast and effective -- just don't ask it about Tiananmen Square. Others note it’s entirely free, unlike ChatGPT, which allows limited free access. Sceptics, however, question whether such an advanced system could have been developed on such a small budget. Regardless, DeepSeek’s emergence has challenged the US’s dominance in AI, and its ramifications are already being felt.
The market reaction was swift and brutal. Nvidia, the dominant supplier of the huge graphics processing units (GPUs) used in AI, saw its value plummet by an unprecedented $600 billion — the largest single-day loss in history. New York’s Nasdaq, heavily weighted with tech stocks, fell by 3 per cent.
But it may not only be Nvidia that moves from being the Master of the Universe to possibly yesterday’s giant.
Rockefeller International chair Ruchir Sharma has noted that the biggest market players globally had around 75 per cent of their money in the US market, creating vulnerability. This could, he predicted, lead to the market collapsing or coming close to it. Could tiny DeepSeek be the unexpected force that brings down the entire US market?
For the millions of Americans who own stocks, a fall could have devastating consequences. Many have their pension money tied up in stocks. If the market does crash so soon after Trump has come to power, could it reflect on him? Possibly. But Trump has demonstrated an amazing ability to be resilient in the face of bad news.
What was happening in India on a day when America was showcasing its imperial ambitions and China was flexing its superb technological muscles? The event hogging the headlines here is the grand spectacle of the Mahakumbh Mela. All our politicians, from Narendra Modi to Amit Shah, Yogi Adityanath, and even Akhilesh Yadav, have taken the opportunity to display their religious credentials to the country and to the world by taking a dip in the Ganga.
But back to Trump and how he aims to build an imperial presidency. The Colombians may have escaped the tariff noose for the moment, but more importantly, starting February 1, Trump has threatened to slap 25 per cent tariffs across the board on all Canadian and Mexican products. There’s talk that there will be a grace period before the tariffs actually go into effect,
Why the across-the-board tariffs? The fact is both Canada and Mexico haven’t been able to have talks with Trump’s new team — many of whom haven’t been cleared by the US Senate for their new jobs.
Trump is not one for detailed explanations, but he believes that the Canadians and Mexicans got too good a deal when the last North American Free Trade Agreement was reworked in 2019, during his first term. He also claimed that the US has a $250-billion trade deficit with Canada. As is often the case, Trump was playing fast and loose with the figures; the actual deficit is only about $45 billion — a small percentage of the total US trade deficit.
Canada: Up next
The Canadians are tossing around their retaliation options. Should they respond with carefully chosen tariffs as has happened in the past, when they targeted products like bourbon whisky, which hit the Kentucky economy? Another product they put tariffs on was Florida oranges and a range of household products.
But this time, some suggest a “nuclear option.” Canada is one of the largest suppliers of oil to the US. A tariff on oil would have a tremendous impact. Canada also sells LNG and electricity to the US — not in large quantities like oil but enough to hit a string of northeastern states and even New York.
The pugnacious Ontario provincial premier Doug Ford says Canada should go the full distance with its tariffs: “You can’t bring a knife to a gunfight. We need to target where it will impact Americans the most.”
Canadians are particularly incensed by Trump’s threat to “economically force” the country into becoming the 51st state and are unusually united against the US. Prime Minister Justin Trudeau and Ford have both taken tough stands against the Americans. One important exception is Danielle Smith, the Alberta premier. Her rich province has most of Canada’s oil, and she has been lobbying for pipelines that would make it easier to transport the black gold to the coast. Smith says: “The world is a dangerous place, and we have to choose a side. I think we should choose the side of freedom and democracy and a nation that shares our values.” It’s not tough to figure out she means the US.
There’s also the risk that Canada cutting oil and electricity might provide an excuse for Trump to send in US troops, claiming the country’s energy and economic security were endangered. The 8,891-km frontier between the two countries, long referred to as best friends, is famously known as the “world’s longest undefended border” – a symbol of trust and mutual respect. Once in Canada, would US troops ever leave?
South America uneasy
Trump has also directed his ire at Mexico (and of course renamed the Gulf of Mexico as the Gulf of America). He’s demanding trade concessions from the Mexicans and threatening to hit many products with tariffs. That could be disastrous, particularly for foreign companies that have built factories in Mexico to cater to the US market. The automobile industry is one that would certainly be affected badly because auto components move in large numbers between plants in the US, Canada, and Mexico. In 2018, Mexico also struck back at US tariffs by imposing levies on all manner of products, from steel to pork, apples, and bourbon.
Other South American countries have also reacted with alarm at Trump’s actions against Colombia, one of the oldest US allies in the region. The Colombians accepted around 240 planeloads of deportees during President Joe Biden’s time in office. But Biden sent back the deportees in chartered civilian planes. Trump is determined to make an example of all detainees, so he had them handcuffed and shackled and put onto very uncomfortable military planes.
Another plane loaded with deportees was forced to land at a small and remote Brazilian airport. The Brazilians were more tactful than Colombia’s President Gustavo Petro. They were also enraged by the manacles and demanded they be removed before allowing the deportees out of the plane.
Incidentally, Trump may not have won such an unqualified victory even against Colombia. It’s reported he has agreed not to send back deportees in shackles in the future.
Greenland on notice
But what about Greenland? Here Trump is showing that he has no regard for global political niceties. His call to Danish Prime Minister Mette Frederiksen was particularly ferocious, demanding she sell Greenland to him. One response that shows how world opinion might turn against Trump is that the four Nordic prime ministers — Sweden, Norway, Finland, and Denmark — dined together over the weekend and ensured a photo of the meal was given to the press.
That’s not a powerful military combination, but it indicates how global opinion could turn against an imperial America that forces its demands even against its own friends.
How can Trump get hold of Greenland? He could, of course, just send troops. Alternatively, he could use strongman tactics against Greenland’s prime minister and force him to invite the US to take over.
What game is Trump playing? His slogan to power was: MAGA or Make America Great Again. In terms of territory, Canada is a gigantic country, though it has a population of only about 36 million. Could Trump’s team have figured that Canada, Greenland, and the US together would create a country with a gigantic land mass?
Greenland has all types of minerals. One company, Amoroq Minerals, is mining for gold but is also conducting tests for other minerals like copper, nickel, and rare earths. And the US and Canada would be oil producers on a massive scale.
Bully pulpit
After World War II, the US was seen as the benign leader of the “free world” against Communism. It was also regarded as Europe’s economic savior with the Marshall Plan, which provided the money to rebuild many cities that had been flattened by bombs.
Trump could be the face of a very different America. But his imperial presidency has already started to look like one that bullies the weak and threatens its allies with tariffs if he doesn’t like their trade balance. So far, he has barely mentioned Russia and China.
Critics say his heavy-handed tactics may force many more nations to turn towards Russia and China. He has already taken on a huge number of tough initiatives, and if even one or two go wrong, he might lose the force of public opinion that’s behind him. Tariffs, after all, inevitably mean higher prices, and Trump campaigned on a platform of lower prices.
Could this presidency truly become imperial, or will the weight of Trump’s ambitions pull it down? Tough to tell. . But in the space of just over a week since his inauguration, Trump has already created a new, more aggressive America that the world might find hard to love.