--- title: How Trump's Foreign Policy Gambits Are Reshaping the World description: From Venezuela to China to NATO, Trump’s transactional approach to foreign policy is upending U.S. alliances and global diplomacy. canonical: https://time.com/collections/davos-2026/7345543/trump-foreign-policy-second-term/ article:content_tier: free article:published_time: 2026-01-15T12:01:44.000Z article:modified_time: 2026-08-04T07:24:22.216Z article:section: Politics og:title: How Trump's Foreign Policy Gambits Are Reshaping the World og:description: From Venezuela to China to NATO, Trump’s transactional approach to foreign policy is upending U.S. alliances and global diplomacy. og:url: https://time.com/collections/davos-2026/7345543/trump-foreign-policy-second-term/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt6bd5bd729b2819d7/6998cce2d32e939546cd7ab1/trump-foreign-policy-001.jpg?branch=production&width=3840&quality=75&auto=webp&crop=16:9 og:image:width: 1200 og:image:height: 675 og:image:alt: How Trump's Foreign Policy Gambits Are Reshaping the World og:type: article twitter:card: summary_large_image twitter:title: How Trump's Foreign Policy Gambits Are Reshaping the World twitter:description: From Venezuela to China to NATO, Trump’s transactional approach to foreign policy is upending U.S. alliances and global diplomacy. twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt6bd5bd729b2819d7/6998cce2d32e939546cd7ab1/trump-foreign-policy-001.jpg?branch=production&width=3840&quality=75&auto=webp&crop=16:9 --- Jan 15, 2026 # How Trump's Foreign Policy Gambits Are Reshaping the World > Sponsored content. 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Terms and conditions apply. * Savings buckets are a feature of Ally Bank's Savings Account. * No ATM fees from Ally Bank at Allpoint and Moneypass ATMs plus we reimburse for fees charged by other ATM owners nationwide up to $10 per statement cycle. * Early direct deposit offers eligible direct deposits up to two days sooner. * Spending buckets are a feature of Ally Bank's Spending Account. ## Video: Greenland's Prime Minister thanks countries in Europe for their support [Watch (HLS stream): Greenland's Prime Minister thanks countries in Europe for their support](https://cdn.jwplayer.com/manifests/0L1FgBVn.m3u8) (1:11)  _Published 2026-01-20. Greenland's Prime Minister Jens-Frederik Nielsen said relations with the United States and NATO must be grounded in “mutual respect”, as he thanked his allies for their support in opposing U.S. President Donald Trump’s plans to take control Greenland._ by [Brian Bennett](https://time.com/author/brian-bennett/) and [Nik Popli](https://time.com/author/nik-popli/)  President Trump departs after he delivered remarks at the House Republican Party member retreat in Washington, on Jan. 6, 2026. President Trump departs after he delivered remarks at the House Republican Party member retreat in Washington, on Jan. 6, 2026.Mandel Ngan—AFP/Getty Images Four weeks before the beginning of his second term as President, Donald Trump abruptly floated the idea of taking back the Panama Canal. It had been a quarter-century since the U.S. formally ceded to Panama ownership of the channel connecting the Atlantic and Pacific oceans. With one social media post, Trump threw a seemingly stable relationship off-kilter, accusing Panama of overcharging U.S. ships for passage and recklessly permitting China too much influence in the canal’s operations. Looking back, it was an early sign of how America’s relationship with the rest of the world was about to be shaken to its core. Trump’s maximalist threat sent his foreign policy advisers scrambling. Within days of his Inauguration, military planners started work on options for taking the canal by force, according to a former Trump Administration official. “We’re going to take it back, or something very powerful is going to happen,” Trump warned. Ultimately, no military operation was necessary. Panama’s President José Raúl Mulino quickly and quietly agreed to a number of concessions, including re-examining Chinese investment in the country. But 800 miles east, Trump’s threats of force were not merely a negotiating tactic. Nearly a year later, following months of escalating pressure on Nicolás Maduro’s regime, Trump in early January authorized a [daring military operation](https://time.com/7342941/venezuela-maduro-bombing-trump-delta-force/) to capture the Venezuelan strongman, a move Trump cast as both a blow against drug trafficking and a grab for Venezuela’s huge oil reserves. The operation marked the most consequential use of U.S. military power in the western hemisphere in decades, and a striking demonstration of Trump’s readiness to act unilaterally, without the painstaking coalition-building that once defined American intervention abroad. Breathtaking bluntness defined Trump’s foreign policy in his first year back in the White House. In rapid succession, he bombed militants in Yemen and [Iranian nuclear facilities](https://time.com/7297464/nuclear-diplomacy-iran-us-strikes-damage-non-proliferation-treaty-weapon/), midwifed a [fragile cease-fire in Gaza](https://time.com/7327675/trump-israel-gaza-deal-interview/), forced European leaders to increase their defense spending, extracted commercial and strategic pledges from China, demanded Denmark [hand over Greenland](https://time.com/7346104/trump-greenland-annexation-threat-us-control/), and threatened tariffs against almost every major U.S. trading partner. He also committed billions to bail out an Argentine President, freed a former Honduran President convicted of drug trafficking, and approved strikes that killed more than 95 people on alleged drug boats in the Caribbean and Pacific, raising [accusations of war crimes](https://time.com/7326921/trump-venezuela-caribbean-drug-boats-maduro/). In recent days, Trump has signaled additional strikes on Iran may be imminent.  Illustration by Tim O'Brien for TIME [Buy TIME's Trump's Next Move issue here](https://magazineshop.us/trumpsnextmove) The sprawl of activity, unmatched by any modern American President, is the Trump Doctrine in action: American power as a lever deployed at will, subject to change at his whim, concentrated not in institutions but in the person of the President. Trump’s frenetic diplomacy—if diplomacy is even the word—has transformed U.S. foreign policy into a solo act, casting aside a foreign policy establishment that one predecessor dubbed “the blob.” But one element of an establishment is stability. Career diplomats and lawmakers interviewed for this story describe a narrowing circle of influence around the Oval Office, with advisers selected for loyalty rather than expertise. The results have destabilized the usually staid world of global diplomacy, where even the smallest changes often require elaborate behind-the-scenes choreography. As the second Trump era dawned, senior U.S. officials openly encouraged the rise of right-wing movements in Europe and pushed through [sudden, debilitating cuts](https://time.com/7211200/usaid-foreign-aid-freeze-trump-rubio/) to foreign aid that triggered warnings of devastation and preventable deaths in the developing world. “We need a strong defense, but we also need diplomacy, a strong and organized State Department, and development,” says Senator Chris Van Hollen, a Democrat who sits on the Foreign Relations Committee. “And the Trump Administration has essentially crossed out two of those in diplomacy and development.” Analysts note that Trump’s chaotic process produces potentially ephemeral outcomes. In Gaza, the cease-fire halted the worst of the fighting but left the disarmament of Hamas unresolved and the question of full Israeli withdrawal open-ended. In Ukraine, Trump’s push for peace has been roundly criticized as strengthening Russia’s hand. And some more modest “peace deals” touted by Trump have been panned as premature or overhyped. But while Trump’s unpredictability can be a liability, it is also his leverage. World leaders fear his wrath and adjust their behavior to avoid provoking him. The approach may not be fostering the most durable alliances, but many concede it has yielded movement where previous Administrations faced stasis. “The most consistent through line is Trump’s belief that the United States has underused its power globally,” says historian Hal Brands, who views the Administration’s first year as a mix of foreign policy failures and wins. “The areas where Trump has succeeded on his own terms are pretty numerous. The question is: Are those successes actually good for the U.S. position over the long term?” **When the Venezuelan** opposition leader María Corina Machado won the Nobel Peace Prize, she had a problem. Trump had openly campaigned for the honor since returning to the Oval Office. His Administration had also become a major supporter of her effort to oust Maduro and restore democracy in the country. Trump’s allies were already grumbling that the Nobel Committee had bypassed him. Machado needed to do some “damage control,” says a longtime Venezuelan democracy advocate in frequent touch with her. Machado got on the phone with Trump that same day and told the President she was dedicating the prize to him. But the gesture [wasn’t enough](https://time.com/7343295/venezuela-machado-trump-nobel-peace-prize/). Trump felt slighted by the Nobel Committee—and by Machado for accepting the prize. On Thursday, as Machado visits the White House, the world will be watching to see if part of her charm offensive will involve handing over her Nobel to Trump. Machado is just the latest in a line of high-profile figures who struggled to navigate Trump’s Nobel obsession. For months, the leaders of Israel, Pakistan, Cambodia, Armenia, Azerbaijan, Malta, and the Democratic Republic of Congo had all told Trump he deserved the Nobel, with several making a big show of formally nominating him—in truth a rhetorical exercise, as there is no formal nomination process. The public displays underlined one of the central shifts in this new era of American foreign policy: that world leaders were increasingly treating the management of Trump’s emotions as a strategic priority. European leaders publicly flatter him; some privately compete to do so. The NATO Secretary-General referred to Trump as “daddy.” A Swiss delegation presented Trump with a gold bar. Qatar gifted him a $400 million plane, raising massive ethical red flags. Dozens of Presidents and Prime Ministers traveled to Washington last year to demonstrate how seriously they take Trump’s support. A White House official says Trump hosted more than 40 foreign heads of government at the White House in 2025, more than double the number Joe Biden did in his first year in office. Where supporters see proof of Trump exercising U.S. might, world leaders increasingly see something else: a President whose personal irritation is a geopolitical variable. “He likes to approach the world stage as a punitive actor,” says Javier Corrales, a political-science professor at Amherst College. “He’s going to treat you badly until you show up with a remarkable offering.”  Charts show new tariff rates by Country at the White House on April 2, 2025 Alex Wong—Getty Images Exhibit A for this line of argument: Trump’s use of tariffs as a kind of diplomatic hammer. After vowing to hike tariffs on virtually every trading partner, he spent much of the year rejiggering taxes on imports across a range of goods and countries. Trump has deployed tariff threats to shape the behavior of India, Pakistan, Canada, Europe, and the U.K. He’s also wielded the threat of military escalation, and of withholding support, to jolt negotiations in Mexico, the Middle East and elsewhere. His White House has demanded rare earth mineral access from Ukraine in exchange for U.S. assistance. He has told advisers that backing for European defense will increasingly require material commitments to American arms manufacturers. These moves reflect a worldview in which American power is transactional—not a public good but an asset to be traded. Anna Kelly, the White House deputy press secretary, says foreign policy decisions come down to ensuring that the benefit to the U.S. is clear and tangible. “All of these decisions are through the lens of ‘America first’ and have direct impacts on the welfare of the American people,” she says. Yet his foreign affairs efforts are not sitting well with his MAGA base. Once devoted lawmakers like former Representative Marjorie Taylor Greene now complain that Trump cares more about burnishing his legacy overseas than bringing costs down at home. “I think the President is stuck between these two impulses,” says Jon Hoffman, a Middle East expert at the Cato Institute. “One is to not get involved in quagmires and yet at the same time to maintain American primacy. So which is it? His Administration is staffed with people on both sides of this.” That tension was on full display in the National Security Strategy the Administration released in December. The 33-page document included a lengthy broadside against Europe, describing the Continent as at risk of “civilizational erasure” and becoming “majority non-European.” While Congress moved forward with a bipartisan defense bill reaffirming long-standing commitments to NATO and other allies, the Administration’s document recast those same commitments as conditional: Europe would receive continued U.S. security backing only if it increased defense spending, accelerated contributions to American weapons programs, and aligned trade policy with the U.S. Allies that spent decades anchoring their security to the U.S. felt as if they were being put on probation. The response in Europe was “extremely strong and extremely emotional,” says Amanda Sloat, who was senior director for Europe at the National Security Council during the Biden Administration. “There’s been a real sense of incredulity about the way the American President—the leader of a country that has for decades been Europe’s closest and strongest ally—has launched these broadside attacks on them.” Republican Congressman Don Bacon of Nebraska says Trump’s foreign policy lacks “a moral compass” and echoes where the GOP was nearly a century ago, when many Republicans argued against entanglement in Europe even as fascist powers expanded. “If you read the 1930s views of many Republicans,” says Bacon, “it’s like they were in a time machine and jumped forward 90 years.” **Trump will spend** 2026 staring down an ominous deadline. U.S. intelligence analysts are convinced China’s leader Xi Jinping has ordered the People’s Liberation Army to build the military forces it needs to invade Taiwan by 2027\. Joe Biden repeatedly vowed as President to defend Taiwan against a Chinese invasion. While Trump has been more circumspect, his Administration has said it is working to maintain military “overmatch” with China. But there’s also an economic contest at work. Speaking in Singapore in May, Defense Secretary Pete Hegseth warned countries against increasing economic ties with China, which he said would deepen the People’s Republic’s “malign influence” and make defense cooperation with the U.S. harder. “Our goal is to prevent war, to make the costs too high, and peace the only option—and we will do this with a strong shield of deterrence, forged together with you,” Hegseth said. The Administration’s National Security Strategy reflects that shift. It treats China primarily as an economic rival rather than an ideological one, emphasizing commerce, supply chains, and market access over values or governance. Taiwan is singled out—described less as a democratic partner than as a strategic fulcrum whose geography, shipping lanes, and semiconductor production carry enormous economic and military weight. Many Trump Administration officials say outmaneuvering China has been their top priority all along. The threat to take back the Panama Canal pushed that country closer into the U.S.’s sphere. The $20 billion bailout to Argentina’s libertarian President Javier Milei headed off Buenos Aires from seeking needed capital from China. His efforts in Venezuela are intended to force out Chinese investments in that country’s oil sector. But some pro-Trump strategists question the Administration’s focus. While Trump kept in place Biden’s submarine deal with Australia, preserving a key pillar of U.S. deterrence in the Indo-Pacific, his approach to China has otherwise been more transactional. “We are locked in great-power competition with China,” says Katherine Thompson, who was a deputy senior adviser in the Pentagon early in Trump’s second term. “Unfortunately, we are 10 months in and we have gotten incredibly distracted.” In June, NATO allies agreed to increase their annual defense-spending target to 5% of GDP by 2035, acquiescing on an issue Trump had been harping on for years. It was a success that Trump sees as proof his deal-oriented style can bear fruit. It also potentially frees up the U.S. to relocate more resources to the Indo-Pacific region. Trump’s bravado works best when he sets a clear goal and follows through, says Thompson. She compared his dealings with Panama and Houthi militants in Yemen—where such clarity led to accomplishments—with situations like Venezuela. “That’s where the America First and Trump’s mantra of foreign policy begins to fall short,” she says. “Where we don’t have clear presidential intent, with clear left and right boundaries defined.” Bacon says allies in the Pacific are watching Trump’s decisions elsewhere and drawing their own conclusions. “They see statements on Ukraine and NATO, they probably wonder, what does this mean for them,” he says, suggesting that Beijing may be asking a more pointed question: whether American ambiguity in Europe signals opportunity in Asia. “If I was President,” says Bacon, “I would be ensuring Taiwan had the weapons they need to deter right now, because day one of the war is too late.” At home, Trump’s approval rating slid in December to 36%. His unpopularity puts a limit on how much political capital he can spend on international goals. But Trump insists his globe-spanning diplomacy is domestic policy. He sees himself extracting investment promises from the Gulf to build up manufacturing and tech development in the U.S. He wants to open Venezuela’s vast oil reserves to U.S. energy production. He made more European defense investment part of the price for support of Ukraine. As his first year back in the White House comes to a close, Trump says he wants a string of historic deals in year two—a lasting Gaza peace, an end to the Ukraine war, concessions from China on trade and minerals. He also vows to hold Venezuela firmly inside the U.S. sphere of influence—an update of the 19th century Monroe Doctrine he’s dubbed the “Donroe Doctrine.” If he achieves even a fraction of this, the world will look different. Certainly the coming 12 months will test whether his roughshod approach to international affairs yields sustainable wins—or simply incubates deeper global instability. “If we end up with a scenario where U.S. alliance relationships are still intact, but everybody is paying much more and investing much more in defense—that’s not the worst outcome in the world,” says Brands. But that assessment comes with a warning. Trump’s bravado risks undermining trust in the very alliances that have sustained American power. If allies start to believe “the U.S. just fundamentally won’t be there when a security crisis comes,” Brands says, “then we’re looking at a much bigger and more disruptive geopolitical reordering.” ```json [{"@context":"https://schema.org","@type":"Article","@id":"https://time.com/collections/davos-2026/7345543/trump-foreign-policy-second-term/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/collections/davos-2026/7345543/trump-foreign-policy-second-term/"},"headline":"How Trump's Foreign Policy Gambits Are Reshaping the World","datePublished":"2026-01-15T12:01:44.000Z","dateModified":"2026-08-04T07:24:22.216Z","description":"From Venezuela to China to NATO, Trump’s transactional approach to foreign policy is upending U.S. alliances and global diplomacy.","url":"https://time.com/collections/davos-2026/7345543/trump-foreign-policy-second-term/","keywords":["Donald Trump","list","franchise","Magazine","Special Project","sponsorshipblock","Accolades","Davos 2026"],"thumbnailUrl":"https://static.time.com/v3/assets/bltea6093859af6183b/blt6bd5bd729b2819d7/6998cce2d32e939546cd7ab1/trump-foreign-policy-001.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","author":[{"@type":"Person","name":"Brian Bennett","jobTitle":"Bennett is the senior White House correspondent at TIME.","url":"https://time.com/author/brian-bennett/"},{"@type":"Person","name":"Nik Popli","jobTitle":"Staff Writer","url":"https://time.com/author/nik-popli/"}],"creator":"Brian Bennett","articleSection":"Politics","image":[{"@type":"ImageObject","url":"https://static.time.com/v3/assets/bltea6093859af6183b/blt6bd5bd729b2819d7/6998cce2d32e939546cd7ab1/trump-foreign-policy-001.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","width":1200,"height":675}],"publisher":{"@type":"Organization","name":"Time","url":"https://time.com/","logo":{"@type":"ImageObject","url":"https://time.com/images/logo.png","width":528,"height":156},"foundingDate":"March 3, 1923","sameAs":["https://www.facebook.com/time","https://www.instagram.com/time/?hl=en","https://twitter.com/time","https://www.pinterest.com/timemagazine"]}},{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"item":{"@id":"/section/politics/","name":"Politics"}},{"@type":"ListItem","position":2,"item":{"@id":"/tag/donald-trump/","name":"Donald Trump"}},{"@type":"ListItem","position":3,"item":{"@id":"https://time.com/collections/davos-2026/7345543/trump-foreign-policy-second-term/","name":"How Trump's Foreign Policy Gambits Are Reshaping the World"}}]},{"@context":"https://schema.org","@type":"VideoObject","name":"Greenland's Prime Minister thanks countries in Europe for their support","description":"Greenland's Prime Minister Jens-Frederik Nielsen said relations with the United States and NATO must be grounded in “mutual respect”, as he thanked his allies for their support in opposing U.S. President Donald Trump’s plans to take control Greenland.","thumbnailUrl":"https://cdn.jwplayer.com/v2/media/0L1FgBVn/poster.jpg?width=720","uploadDate":"2026-01-20T17:45:59.000Z","contentUrl":"https://cdn.jwplayer.com/manifests/0L1FgBVn.m3u8","embedUrl":"https://time.com/collections/davos-2026/7345543/trump-foreign-policy-second-term/","duration":"PT1M11S","potentialAction":{"@type":"SeekToAction","target":"https://time.com/collections/davos-2026/7345543/trump-foreign-policy-second-term/?jw_start={seek_to_second_number}","startOffset-input":"required name=seek_to_second_number"}}] ```