The world in 2025

Donald Trump’s return to the White House will loom over Asia in 2025, as the region’s leaders consider how far he will pursue a renewed trade war with China and what impact his unpredictable administration will have on key flashpoints: the South China Sea, Taiwan and North Korea.

Flitting between transactional and confrontational, President Trump could exacerbate existing tensions with Beijing over Taiwan and the South China Sea or, equally, sell out US partners and allies in Asia. While South Korea is experiencing domestic ructions, the North Korean challenge is intensifying. Kim Jong Un is more belligerent than ever, and sending thousands of his loyal troops to fight for Russia against Ukraine while developing nuclear weapons at home. 

With Trump suggesting he may pursue a Ukraine peace deal with Vladimir Putin, or cut support for Kyiv altogether, the linkages between the US, China, Russia, North Korea and Europe will come into sharper focus. Economically, investors and governments are awaiting Trump’s proposed tariffs on China, and the response from Beijing and the region’s other trade-dependent nations. But beyond tariffs, China’s leader Xi Jinping will face sluggish growth at home and a private sector whose animal spirits have been curbed by his drive to tighten the Communist Party’s control. 

In a quieter election year, Australia’s Labour prime minister Anthony Albanese will be fighting for a second term, while Singapore’s new prime minister Lawrence Wong will test his popularity at the polls for the first time.

Ben Bland, director, Asia-Pacific Programme

In 2025, action on global AI governance will come into sharper focus, as countries balance the urgent need for increased international cooperation while navigating rising geopolitical tensions. 

In February, governments, tech companies, scientists and experts will meet in Paris to discuss how to build ‘public-interest’ AI at the AI Action Summit. Canada’s G7 presidency, starting in January, is expected to focus on a shared approach to emerging technology, which could supercharge G7 and OECD efforts to advance safe, secure and trustworthy AI development. In April, Rwanda will host a major summit on Africa’s global role in AI.  

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But beyond these high-level conferences, other efforts to strength AI governance will gather pace. Throughout 2025, the implementation of UN’s Global Digital Compact and the proposed blueprint for AI governance could provide an opportunity for emerging powers to rewrite the rules and gain more influence. New rules on general purpose AI from the European Union’s flagship ‘AI Act’ will come into effect in August. This regulation, the first of its kind, could also help advance a globally influential ‘code of practice’ for AI companies to abide by. 

After the upheaval of last year’s electoral ‘megacycle’, governments around the world will face an increasingly pressing test in 2025; how to put aside diverging national politics and geopolitical tensions and work together towards strengthening global governance on AI for public good.

Isabella Wilkinson, research fellow, Digital Society Programme

The policy choices Donald Trump makes as his second term as US president gets under way are likely to dominate the outlook for the global economy in the next 12 months.

If he follows through on his campaign threat to impose 10 to 20 per cent tariffs across the board on imports from other countries – and 60 per cent on Chinese imports – the rest of the world will need to decide whether to retaliate with their own tariffs, or to seek to negotiate a deal with the US, or most likely a mixture of both. Combined with the deportation of millions of undocumented migrants and Trump’s expansionary fiscal policy, this could lead to resurgent US inflation next year. How the Federal Reserve responds will be critical for both domestic financial markets and the dollar.

Trump also appears to be much more in favour of private digital currencies than the Biden administration and most other countries. If combined with a push to deregulate financial services – undoing reforms implemented after the global financial crisis – this could force other countries to take steps to protect their own financial systems, which could come to a head at the IMF/World Bank annual meetings in October.  

The impact of climate change on the world economy is likely to become increasingly apparent in 2025, forcing mainstream economic policymakers in central banks and finance ministries to factor it into their day-to-day policies. But the Trump administration’s highly sceptical view on climate change, in particular, and multilateralism, in general, will make it even harder to muster an effective global response in the run-up to COP30 in Brazil in November.

Creon Butler, director, Global Economy and Finance Programme

The German Bundestag elections on February 23 will shape European politics in 2025. Brought forward from September after the coalition government’s collapse, the elections should bring renewed life to German political leadership. Germany’s economy – the EU’s largest – contracted for the second consecutive year in 2024, and the traditional backbone of its economy, the car industry, is struggling. The new government will have to confront these issues and provide new impetus to leadership in the EU and greater support for Ukraine.

Beyond Germany, the new European Commission is expected early in the new year to publish a white paper on defence, in an effort to lead the way towards a more coordinated and integrated approach to European security. NATO is keeping a wary eye on the EU’s efforts, but they need to work together to build a stronger defence industrial base in Europe, particularly given the re-election of Donald Trump and his wavering commitment to transatlantic security.

The European Commission has also developed a host of economic, security and industrial policy tools aimed at protecting prosperity within the EU, reducing dependencies on third countries and stimulating economic growth. Economic security is a priority for Ursula von der Leyen’s second Commission, so the EU is likely to double down on this strategy as it seeks to protect itself from the impacts of the US–China trade tensions as Trump takes office again.

Armida van Rij, senior research fellow, Europe Programme

The negotiation of the ‘Pandemic Agreement’ – which would be the first global accord to address international cooperation specifically on pandemics – is in overtime and needs to be ready for adoption in May at the World Health Assembly in Geneva.

It remains unclear whether agreement can be achieved, and if so, how meaningful the substance would be. This will have significant implications for global equity – and will be a measure of the current state of international cooperation on transnational risks, beyond health. The level of political traction that pandemic preparedness sustains at other key forums, including at the G7 and G20, will be crucial.  

As faith in the multilateral system continues to waver, more countries will look to increase their self-sufficiency in health security through regional cooperation and other alliances. The re-election of Donald Trump will encourage a shift in global health leadership next year, but whether this gap is filled by middle powers, countries in the Global South or centres of power like the EU remains unclear. 

It will also be telling to see how climate change factors into global health decision-making, as the threat posed by extreme weather, pollution and environmental degradation on health security becomes increasingly evident. Finally, another moment to watch out for is the forthcoming review of the World Trade Organization’s legal mechanism that currently allows lower-income countries to bypass intellectual property rights for public health reasons – it  could significantly affect global equity around access to medicines.

Emma Ross, senior research fellow, Global Health Programme

Global conflicts in the Middle East, Ukraine, and Sudan are intensifying, with the potential for spillovers. At the same time, the resumption of President Trump’s ‘America First’ agenda in 2025 is expected to shrink US global defence commitments, pushing allies to rethink their strategies and bolster their capabilities.

Against this backdrop, Britain, the European Union and NATO face a critical test of their ability to strengthen their collaboration and adapt to an increasingly hostile security environment.  For NATO, the challenge lies in maintaining alliance cohesion amid potential shifts in US foreign policy and internal division among NATO member states, particularly over their support for Ukraine. 

Next year, the EU will face dual challenges of institutional reform and economic revival while also bolstering its crisis preparedness. Reports published in 2024 from former Finnish president Sauli Niinistö and Italy’s former premier Mario Draghi highlight the need for a more comprehensive, collaborative approach to European security. This will increase pressure on countries to enhance military and civilian readiness, boost competitiveness and rebuild their defence-industrial base in the year ahead. 

Britain, anticipating a more prominent role within NATO, is also refocusing on strengthening its relationship with the EU. The forthcoming Strategic Defence Review, expected in early 2025, aims to reposition Britain’s defence capabilities by prioritizing technological innovation, increased autonomy, and by building more integrated regional partnerships.  At the same time, the government is likely to pursue a UK–EU defence pact as a way of reinforcing their alliance.

Joyce Hakmeh, deputy director, International Security Programme

Ending conflict in the Middle East is unlikely to dominate the Trump foreign policy agenda in 2025. However, the incoming administration will anchor its regional strategy around the two pillars of Israel’s security and Iranian containment. 

Trump has maintained strong support for Israel and will continue to prioritize its security needs, even if he is expected to urge the Netanyahu government to scale back its military operations in Gaza and Lebanon following the ceasefire in the latter. This approach will not generate any political settlement that would address the issue of Palestinian self-determination or which Trump could claim as a victory, but it’s likely to lead to Israeli-imposed ceasefires.    

At the same time, the US administration will look to reopen a longer-term discussion with Saudi Arabia on a defence agreement to help strengthen regional security integration among American partners.  The deal would be contingent on Saudi-Israeli normalization, and from Riyadh’s perspective would also require support for Palestinian statehood. 

Trump has also signalled his intention to return to the maximum pressure sanctions he imposed on Tehran in 2018 after withdrawing from the Iran nuclear agreement. The likely aim of this approach is not to support regime change in Tehran – which is the hope of activists abroad – but rather to compel new negotiations on Iran’s nuclear programme and its transfer of lethal aid to Russia and non-state actors.

The rapid and unexpected fall of Syria’s President Bashar al-Assad  in December has been met by celebration within the country. While the political transition ahead is far from certain, Assad’s fall has further weakened Iran’s position and axis of resistance groups across the Middle East. Without coordinated engagement and accompanying diplomatic processes, this massive agenda is likely to exacerbate the cycle of conflict rather than encourage greater regional stability.

Sanam Vakil, director, Middle East and North Africa Programme

With a new Labour government in office, the UK’s foreign policy priority next yearwill be in balancing relations with the US and Europe. More attention will be paid to Britain’s role in European security as the war in Ukraine continues into its fourth year. The Starmer government has already committed £3 billion annually in military support to Ukraine ‘for as long as it takes’ as well as to meeting NATO’s annual defence spending target of 2 per of GDP, with a future target of 2.5 per cent to be set out ‘at a future fiscal event’. 

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But Donald Trump’s re-election could pressure Britain to meet this commitment sooner if he – as he has threatened to – makes the US’s support for NATO much more transactional. The Labour government could use this opportunity to generate stronger security links with its European neighbours. 

Whether these links translate into greater economic cooperation will be another major consideration for Britain in 2025. If Trump follows through on his announced plans to impose tariffs on the US’s trade partners, then the UK must consider either striking an exemption deal with the US, or throw its lot in with its European neighbours. 

The extent to which Britain can play an active role in other strategic hotspots including the Indo-Pacific – where the threat of conflict increases with the re-election of Trump – will come down to the question: can the country generate the economic growth to sustain its global influence?

Courtney Rice, senior programme manager, UK in the World Programme

Africa’s voice will be amplified on the global stage in 2025 as South Africa assumes the presidency and hosts the newly expanded G20 forum in November. The African Union (AU) will elect a new chairperson for its commission in February, and since it became a G20 member in 2023 will also participate in the forum.

Collaboration between the AU and South Africa offers an important chance to advance institutional reform and expand Africa’s inclusion in global governance. Key elections in Malawi in September and Tanzania and Côte d’Ivoire in October will serve as critical tests for democracy. In 2024, the formation of a Government of National Unity in South Africa and opposition wins in Senegal, Botswana and Mauritius, represented important victories for democratic pluralism in Africa. Whether the continent can build on these gains – and resist the post-election violence that brought chaos to Mozambique this year – remains unclear. 

Donald Trump’s re-election risks weakening US–Africa relations, with a significant chance that the new administration will reduce its support for health and  democracy initiatives, and any other projects that are not perceived to bring immediate benefits to American interests. 

US companies, already limited in their African investments, may further reduce their engagement in a more transactional environment. But this retrenchment also creates opportunities and could encourage middle powers and emerging economies to expand their influence in Africa through increased trade, investment, and new partnerships.

Tighisti Amare, deputy director, Africa Programme
 

The western policy of keeping Ukraine in the war, rather than helping it win, will bring the country – and by extension the western world – to the brink of defeat by Russia.

Reduced military assistance, an emboldened Russia and the continuing absence of leadership in the West mean things will get worse for Ukraine in 2025.  It is notable that no western leader beyond the ‘frontline states’ has called for Ukraine’s victory. The belief among western leaders that Ukraine cannot win this war will probably become more pervasive in 2025 and will feed a self-reinforcing cycle of diminished support and greater military losses. But it is important to remember that Moscow is looking for control, not territory per se. 

Along with the re-election of Donald Trump this gives momentum to the push for a compromise deal. But this will freeze rather than resolve the conflict and will likely entail territorial losses on Kyiv’s part.  Fatigue among western donors and a partial Russian victory, sold as the best achievable outcome, are the greatest threats to Ukraine in 2025. 

Yet even though Russia has made military advances in Ukraine in recent months, it is not unbreakable, and is under tremendous pressure, particularly financially. Economists say that Vladimir Putin has only 12 to 18 months to continue this course before hard domestic decisions have to be made. The western world – or more likely a coalition of the willing – would do well to recognize these strains and look at how it can best squeeze Russia in 2025.

James Nixey, director, Russia–Eurasia Programme

Big challenges to effective climate action loom in 2025. The move to a net-zero global economy is not inevitable, and consensus over the Paris Agreement and its primary goal to keep global warming to beneath 2C is weakening. 

Decarbonization of key sectors may be derailed by increasingly protectionist policies  – tariffs on Chinese electric vehicles enacted by the European Union and the United States  could be replicated by more countries, while the EU may expand its tariffs to other clean technologies. Critically, President-elect Trump is expected to pull America out of the Paris Agreement, roll back renewable energy subsidies and shift towards greater support for fossil fuels. 

November’s COP30 will take place in Belém, Brazil. Delegates will try to agree how countries’ plans to help global climate efforts should be enacted – these ‘nationally determined contributions’ are due by the end of February. As such, COP30 will be a pivotal moment to prevent runaway climate change, ensure the energy transition and double down on the Paris Agreement. Parties will also increase pressure for private sectors to step up their decarbonization plans. Given Brazil’s unique biodiversity, nature is expected to be taken seriously in negotiations, including the move to a bioeconomy that supports transitions across sectors, including fuel and food.

As the fraught negotiations at COP29 in Baku delivered an unsurprising, but frustrating outcome on climate finance that satisfied few, the pressure is on for COP30 in Brazil next year to galvanize more meaningful outcomes from climate negotiations.

Ana Yang, director, Environment and Society Centre

By issuing an arrest warrant in November for Israel’s prime minister Benjamin Netanyahu for alleged war crimes and crimes against humanity, the International Criminal Court now has arrest warrants for two serving heads of state – Vladimir Putin is the other. Attention will turn to which of the 124 member states will enforce the court’s decision and restrict their travel in 2025.

On his return to office, Donald Trump is expected to weaken the US’s multilateral commitments and denounce – if not simply ignore – a range of international treaties, including the Paris Climate Agreement. The extent to which other countries will support and press for the international rule of law in the face of Trump’s repudiation will be hugely consequential.  The case brought before the International Court of Justice (ICJ) by South Africa in 2023, which claims Israel’s actions in Gaza violate its obligations under the Genocide Convention, continues next year with Israel having until July to submit its written response to the allegations. 

The ICJ’s advisory opinion on states’ climate-related obligations will be delivered in 2025.  But it is unclear whether this opinion will help steer countries towards stronger climate action or merely represent a jamboree for the world’s international lawyers. 

Look out for the publication of a new policy by the ICJ’s Office of the Prosecutor on the prosecution of cyber-enabled international crimes –  a timely intervention as warfare becomes increasingly hybrid and state cyber-operations increasingly harmful.

Harriet Moynihan, associate fellow, International Law Programme