He slammed the southern border shut<\/a>, purged government departments<\/a>, ripped up diversity and inclusion<\/a> practices, pulled out of climate accords<\/a> and global bodies, forced a reckoning over defence spending, bombed Iran<\/a>, blew up suspected drug boats<\/a> in international waters, brought Russian leader Vladimir Putin in from the cold<\/a>, and led Europe and Ukraine on a rollercoaster<\/a> ride the endpoint<\/a> of which remains unknown.<\/p>\n Trump 2.0 set a cracking pace from day one. His transition team knew what it wanted to do and how to do it \u2013 after all, this was Trump\u2019s second go at changing the country. Much of what came out of the Oval Office resurrected policies from his first term.<\/p>\n Next year will be slower. Trump\u2019s goals are pretty obvious: reduce the US\u2019s trade deficit and keep investment flowing into the country, control inflation<\/a> and keep prices down for American consumers, hold the House of Representatives at November\u2019s midterm elections (or minimise Republican losses<\/a>), and \u2013 of course \u2013 end the Russia-Ukraine war and earn himself the Nobel Peace Prize<\/a>.<\/p>\n Loading<\/p>\n The world\u2019s largest economy enters 2026 with moderate expectations after a mixed year. Economic growth has slowed and unemployment is slightly higher. Trump\u2019s immigration crackdown reduced the supply of labour, but the job market has slowed even more. Inflation is basically where it was a year ago \u2013 it did not skyrocket due to Trump\u2019s tariffs, as some predicted, though it has risen over the past few months.<\/p>\n Stockmarkets are going gangbusters, driven by frenzied investment in artificial intelligence (amid warnings of an AI bubble). But that makes for a two-speed economy, with low-income households battling high prices and insecure work, as Philadelphia Federal Reserve president Anna Paulson noted in a recent outlook.<\/p>\n \u201cWhile headline growth is shaping up to be pretty decent this year, the base of support looks different \u2013 with a lot of concentration at the top,\u201d she wrote.<\/p>\n President Donald Trump rolled out the red carpet for Russia\u2019s President Vladimir Putin in Alaska in August.Credit: AP<\/p>\n Trump made a rod for his own back when he campaigned aggressively on affordability, giving struggling voters the impression he could bring down prices for everyday goods. That is proving to be easier said than done. Gas prices are down; the rest not so much, no matter what Trump claims<\/a>.<\/p>\n Spooked by a bad showing for Republicans at off-year elections in November, the president and his team are clearly feeling the heat. They have shifted focus to domestic economic matters, with Trump and Vice President JD Vance both holding rallies in Pennsylvania in December that are part of a broader affordability roadshow planned for 2026.<\/p>\n Trump has vigorously pushed redistricting plans<\/a> in multiple states that would advantage Republicans in next year\u2019s midterms \u2013 blatant gerrymandering, which is something both sides of US politics have long done. It may help deliver extra seats in pockets of the country, but Trump knows that if voters are angry on election day, it won\u2019t be enough.<\/p>\n Loading<\/p>\n On that, the president has a few aces up his sleeve. In 2026, the US will celebrate the 250th anniversary of the Declaration of Independence \u2013 the country\u2019s birthday \u2013 in what promises to be a blockbuster year of patriotism, pomp and self-congratulation. In the middle of that, the US (with Mexico and Canada) will also host the FIFA World Cup<\/a>, with a match to be played on Independence Day in Philadelphia.<\/p>\n Trump is working hard to attach himself to sport and general \u201cgood vibes\u201d. He has attended football, soccer, tennis and UFC matches, and if you were to summarise his hyperbolic messaging over the past year, it would be his oft-repeated line that America is \u201cthe hottest country in the world<\/a> right now\u201d. In 2026, that might actually be true.<\/p>\n At the same time, the country is no closer to surmounting the intractable problems that have plagued it for so long. Another federal government shutdown<\/a> is just weeks away \u2013 the end of January \u2013 unless Democrats and Republicans can overcome their impasse on healthcare. There is no sign of reform on gun violence, despite a rising tide of political violence<\/a> that struck both sides of the divide in 2025, and made a martyr of conservative activist Charlie Kirk.<\/p>\n Finally, if we accept that Trump\u2019s star will fade in 2026 as the midterms approach, and he gets closer to lame-duck status, then it follows that other stars will rise. Trump is already being asked about anointing a successor for 2028; given his power in the MAGA universe and the Republican Party, his endorsement would be a massive boon. Vance is front and centre<\/a>, sure, but so is Marco Rubio and, inevitably, Trump\u2019s son, Don Jr. How these men position themselves in 2026 \u2013 what they emphasise, where they separate themselves from Trump, whether they declare their hand \u2013 are things to watch this year.<\/p>\n \u2013 Michael Koziol, North America correspondent<\/p>\n Europe <\/p>\n Europe drifted through 2025 as if its citizens had plenty of time to agree on their direction so they could, one day, dig their oars into the water and get moving. They enter 2026 with their prosperity and security in doubt \u2013 and their oars still in the air too much of the time.<\/p>\n European leaders speak with resolve about the challenges facing the continent: slow growth, higher prices, the war in Ukraine, hybrid warfare from Russia, strains in the American alliance and discontent over migration and social change. Leaders jet across Europe to talk about these problems. But their people want faster action.<\/p>\n (L-r) Ukrainian President Volodymyr Zelensky, British Prime Minister Keir Starmer, French President Emmanuel Macron and German Chancellor Friedrich Merz following a meeting at Downing Street on December 8.Credit: Getty Images<\/p>\n The year ahead will test Europe\u2019s capacity to tackle challenges that are already known to its leaders and people. So far, at least, there is no consensus over what to do. First, there are divisions between countries on the way forward \u2013 such as the splits in the European Union over the war in Ukraine<\/a> and the rules on migration<\/a>. Second, there are divisions within countries over domestic policy \u2013 such as the political brawl in France<\/a> over cuts to welfare spending.<\/p>\n Trump confronts Europe on two broad fronts: his claim that it is being destroyed by migration<\/a> and his argument for a peace deal on Ukraine<\/a> that is softer on Putin than most European leaders would like. Many of the questions for Europe in 2026 come down to whether it starts to see the world as Trump does \u2013 or breaks with his vision and sets its own course.<\/p>\n Putin is seen as the greater threat. While Trump antagonised Europe by raising tariffs<\/a>, the Russian president endangered Europe with hybrid warfare<\/a>. Poland believes Russia sent spies to damage its rail networks, while Denmark believes it sent drones to disrupt its airports<\/a> and Britain convicted petty criminals<\/a> who committed arson on orders from Moscow.<\/p>\n Every major leader in Europe calculates that appeasing Putin will only encourage him, while Trump assumes he can make a deal on Ukraine that makes money for American business. Only the Europeans seem guided by the lessons of 1938. These two approaches will be hard to reconcile in 2026. If Trump insists on his path, Europe will have to embark on its own.<\/p>\n Loading<\/p>\n This means the year ahead could bring a severe rupture in the transatlantic alliance. The scale of it, like so much that depends on Trump and his movement, will be shaped by the verdict of US voters in the midterm elections in November. Will Americans cement or reject the MAGA philosophy? In 2026, the most important election for Europe will be the American one.<\/p>\n Domestic pressures will continue to divide Europe when its leaders seem incapable of uniting their countries behind strong budget and economic policies. Australia has a gross debt of 55 per cent of GDP. That percentage is 180 in Greece, 148 in Italy, 116 in France, 98 in Britain and 64 in Germany. Europe is trying to rearm<\/a> against Moscow at the same time it increases its welfare payments, after years of failure to balance tax and spending. (All figures are from the OECD)<\/a>.<\/p>\n British Prime Minister Keir Starmer retreated on cuts to welfare in 2025 because Labour backbenchers rebelled. French President Emmanuel Macron lost one prime minister<\/a>, and almost another<\/a>, because the National Assembly opposed spending cuts and tougher pension rules. German Chancellor Friedrich Merz took power in May<\/a> and has seen a collapse in his popular support.<\/p>\n Parliaments are split on economic and budget policy because they reflect voters who want generous spending and low taxes, as if the European welfare state can last forever with no regard to the debt.<\/p>\n The test for Starmer comes in May when voters in Wales and Scotland decide their parliaments. Starmer is on the nose, even if he is not on the ballot paper. A big defeat for Labour in Wales, in particular, probably triggers a leadership spill to replace him. The British media acts as if the spill will come sooner than that.<\/p>\n Loading<\/p>\n Wales is also a test for Nigel Farage<\/a>, the populist leader of Reform UK. The opinion polls tell him that voters want his hard line on migration, but he has no real economic agenda to deliver better times for families. He has convinced the media he is a contender \u2013 and some act as if he is certain to become prime minister. Only in May will we know if he has convinced the voters.<\/p>\n Anger about migration will be a defining dispute in 2026, and not only because Trump says Europe is being destroyed by migrants.<\/p>\n In Britain, protesters gather outside asylum seeker hotels<\/a>. In France and Germany, voters shift to hard-right parties<\/a>. Many voters do not want more migrants, and they were turning to the right before Trump arrived.<\/p>\n One guide to voter sentiment will come in April, when Hungarian Prime Minister Viktor Orban seeks to hold power in parliamentary elections. His key policy: no migrants. He complains about support for Ukraine, is friendly to Putin and favoured by Trump.<\/p>\n Another key election will come when Danish Prime Minister Mette Frederiksen faces the people. She moved ahead of other leaders to clamp down on migration, departing from the old template for social democrats, and she wants to follow Australia in restricting social media<\/a> for children. The election is due by October 31.<\/p>\n Mounted police officers scuffle with demonstrators during a protest by anti-migrant Abolish Asylum System and counter-protesters in Bristol, England.Credit: AP<\/p>\n There are bright points ahead. The Winter Olympics will be held in Milan in February, and the Eurovision Song Contest will be held in Vienna in May. Both will try to highlight harmony.<\/p>\n Alas, Europeans have no reason to think their world will improve in 2026. Even the best possible outcome for Ukraine, peace with lasting security, does not end the problems across the region. In the year ahead, Europe will be a sphere of low growth and high discord.<\/p>\n \u2013 David Crowe, Europe correspondent<\/p>\n North Asia<\/p>\n North Asia enters the new year with a hangover from Trump\u2019s trade war with China and the uncertainty of the fragile truce<\/a> brokered in the final months of 2025.<\/p>\n In April, the world\u2019s attention will focus on Beijing, where Chinese leader Xi Jinping will host Trump for his first state visit to China<\/a> during his second term.<\/p>\n China amassed a record trade surplus despite the tariff war with the US.Credit: AP<\/p>\n This meeting will set the tone between the two superpowers in 2026, giving an early indication of whether the truce will hold and if it can be shaped into a long-term trade deal or even a broader bargain extending into areas of foreign policy.<\/p>\n Xi enters the negotiations from the position of strength, having flexed China\u2019s dominance over rare earth supply chains<\/a> to extract concessions from Trump in the form of relaxed technology export controls, while conceding little substantive ground. Xi will look to capitalise on this leverage as China seeks to roll back bans on its access to superior US chips<\/a> and semiconductors \u2013 the main impediment to it surpassing America as the world\u2019s leading tech power.<\/p>\n Loading<\/p>\n While Xi did not raise the issue of Taiwan<\/a> during his meeting with Trump<\/a> on the sidelines of the APEC summit in October, many analysts expect him to do so in Beijing. This would build on their phone call in November, where Xi told Trump that Taiwan\u2019s return to China was an \u201cintegral part of the post-war international order\u201d.<\/p>\n Officials in Taipei will be watching closely for any signs of Xi\u2019s growing impatience towards annexing the island and any shifts by Trump in US policy that could see him trade Taiwan\u2019s security for a grander bargain, such as Xi\u2019s support for ending the war in Ukraine. China hawks in the Trump administration insist this will never happen.<\/p>\n Loading<\/p>\n On the home front, Xi faces a gargantuan challenge in turning around China\u2019s sluggish domestic economy<\/a>, which is weighed down by trillions of dollars in debt and the long drag of a property market collapse.<\/p>\n In March, Beijing will publish its 15th five-year plan, laying out its policy blueprint to 2030. This is supposed to pivot China\u2019s economy from an export-driven machine to one powered by its own consumers, but so far, Chinese policymakers have given no clear pathway for how they will convince reluctant consumers to spend.<\/p>\n Meanwhile, China\u2019s record trade surplus with the world, which topped $1 trillion for the first time in 2025, shows that Trump\u2019s tariffs failed to dent Beijing\u2019s export juggernaut. But this will only increase concerns across Asia, Europe and the US that their markets will continue to be flooded with an oversupply of cheap Chinese goods.<\/p>\n Japan and South Korea are still reeling from their encounters with Trump\u2019s America First transactionalism, which forced them to commit to a combined $US900 billion ($1.4 trillion) in investments in US industries in exchange for lower tariffs and ongoing US security protection<\/a>. But with both countries\u2019 economies in the doldrums, the deals have been a bitter pill for domestic audiences and a tough sales challenge for South Korean President Lee Jae Myung and new Japanese leader Sanae Takaichi.<\/p>\n Takaichi, who became Japan\u2019s first female prime minister in October<\/a>, has had a baptism of fire. She enters 2026 having endured weeks of Chinese fury over her comments canvassing scenarios in which Japan could enter a war over Taiwan<\/a>. China\u2019s outrage has extended beyond demands for a retraction to a campaign of economic and military coercion, including curbing tourism to Japan, banning seafood imports and increasing military patrols near Japan\u2019s territory.<\/p>\n It comes as Takaichi tries to pump stimulus in Japan\u2019s heavily indebted economy to ease inflation pressures on households, while working to convince a wary public of the need to reform the country\u2019s pacifist constitution and ramp up defence spending.<\/p>\n To this end, China\u2019s aggression is not only helping burnish her case, it has boosted her political stocks as a leader refusing to relent to a bully. She sails into the new year with the highest approval ratings for a Japanese leader in years.<\/p>\n Loading<\/p>\n In South Korea, the Lee administration will be approaching its first full year in power after a failed martial law bid<\/a> landed the former president in jail on rebellion charges and threw the country into months of chaos in 2025. Lee has repositioned the country\u2019s foreign policy posture towards China as more moderate than his hawkish predecessor, while trying to open engagement channels with North Korea.<\/p>\n However, Lee\u2019s rapprochement efforts<\/a> \u2013 including dismantling loudspeakers at the North Korean border and banning propaganda leaflet drops \u2013 have so far been roundly rejected by Pyongyang, which views the South as its principal enemy.<\/p>\n In 2026, the world awaits the ultimate wild card: a potential meeting between North Korean dictator Kim Jong-un and Trump. Trump is eager for it, Kim is open to it.<\/p>\n Any meeting would plumb the same terrain as previous talks between the two men in Trump\u2019s first term \u2013 that is, North Korea\u2019s nuclear program. Those talks fizzled out<\/a>.<\/p>\n However, this time around, Kim would enter any talks with increased leverage and a demand that the US accept it as a legitimate nuclear power.<\/p>\n No longer a total pariah, North Korea has strengthened its alliance with Russia by aiding Putin\u2019s war in Ukraine. In 2025, Kim joined Putin and Xi on the global stage<\/a> at a military parade in Beijing, giving the North Korean regime a stamp of legitimacy from the anti-US bloc.<\/p>\n Chinese President Xi Jinping (centre) with Vladimir Putin, Kim Jong-un and other world leaders in Beijing in September.Credit: Xinhua via AP<\/p>\n Any meeting would test Trump\u2019s appetite for abandoning the US\u2019 long-held position that North Korea must denuclearise, with talks instead pivoting to arms control discussions.<\/p>\n Don\u2019t rule it out. Trump\u2019s national security strategy<\/a>, released in December, conspicuously did not reference North Korea or denuclearisation of the Korean Peninsula at all. North Korea was mentioned more than a dozen times in a similar strategic document during Trump\u2019s first term.<\/p>\n \u2013 Lisa Visentin, North Asia correspondent<\/p>\n South-East Asia<\/p>\n Like the rest of the world, South-East Asia will be sweating on Trump\u2019s endeavours to build his MAGA utopia at the expense of everyone else.<\/p>\n Loading<\/p>\n Still, no region seems as squeezed, on so many fronts, by the power competition between China and the US as this one. Trump\u2019s America has stepped away from South-East Asia, leaving a vacuum for Beijing to move in as the new, stable partner on security, trade and matters of soft diplomacy, such as aid.<\/p>\n The Lowy Institute\u2019s Asia Power Index shows the US maintaining the No.1 power ranking in Asia, but it has lost significant ground to China. Drill further into the findings and China has shot from fifth to first on the measure of \u201cefficacy of political leaders in advancing their country\u2019s diplomatic interests in Asia\u201d.<\/p>\n Unless Trump changes tack, which appears unlikely, China will make more headway in 2026. South-East Asian nations do not want to be in a position where they have to \u201cchoose\u201d between China and the US, but events may be leading that way.<\/p>\n Vietnam will be an interesting case study in navigating these great-power waves. It exports huge amounts of goods to America, which has imposed a tariff rate of 20 per cent. This is roughly on par with other South-East Asian nations.<\/p>\n The biggest and broadest of Trump tariffs were announced on \u201cLiberation Day\u201d in April.Credit: AP<\/p>\n But the issue for Vietnam next year will be how the Trump administration chooses to tackle, define and punish the trans-shipment of heavily tariffed Chinese goods. Chinese exports to Vietnam have surged this year, some of which are bound for the US.<\/p>\n One country firmly in America\u2019s corner is the Philippines, which will continue its at-times violent spat with China in the South China Sea<\/a> (or West Philippine Sea, as the Filipinos call it).<\/p>\n China claims almost the entire sea for itself, leading to tensions not only with the Philippines but with Malaysia, Indonesia, Vietnam and Brunei.<\/p>\n The bad feelings have escalated under the presidency of Ferdinand Marcos Jr, who has pivoted the Philippines towards the US, its old treaty ally, after the China-friendly years of Rodrigo Duterte.<\/p>\n Duterte has been in custody in The Hague<\/a> since March for crimes against humanity related to the Philippines\u2019 brutal \u201cwar on drugs\u201d during his presidency. His case will inch forward in 2026.<\/p>\n Domestically, Marcos Jr will be pressured to lock up the elites responsible for siphoning off money earmarked for flood-management initiatives<\/a>. The sprawling, multibillion-dollar scandal has triggered mass protests and fed into rumblings of a coup.<\/p>\n Indonesia will begin the new year with significant and highly controversial changes to both its criminal code and criminal procedure code. Civil liberty groups are horrified at what some of the provisions may mean for democracy and personal freedoms.<\/p>\n How President Prabowo Subianto manages his massively expensive social programs \u2013 such as free school lunches \u2013 while ensuring key agencies and local governments have enough funds to effectively do their jobs, including flood mitigation, will also be an issue to watch. Something might have to give. Could 2026 be the year Indonesia abandons its new capital city project?<\/p>\n On trade, the world\u2019s third-largest democracy could be on a collision course with the US after the latter accused the Prabowo administration of backtracking on agreed points. Punitive measures such as even higher tariffs could ensue.<\/p>\n Thailand, whose politics are coloured by meddling<\/a> from the royalist-military establishment, will go to the polls in early February. The progressive People\u2019s Party, the opposition, will probably win. But it won last time, too, when it was called the Move Forward Party. Move Forward was blocked from forming government and then dissolved by the Constitutional Court.<\/p>\n Anutin Charnvirakul has been prime minister for a few months<\/a>, following the court-ordered sacking of Paetongtarn Shinawatra<\/a>. The People\u2019s Party helped elevate Anutin on the condition that he would call fresh elections. So, here we are.<\/p>\n Loading<\/p>\n The incumbent has been sharply criticised for his handling of last month\u2019s major floods. Now, though, Thailand is again fighting<\/a> with Cambodia, allowing Anutin to tap into a deep well of nationalist sentiment and play the patriotic, wartime leader.<\/p>\n With neither side willing to appear weak or to cede territory, hostilities, whether overt fighting or at a diplomatic level, will play out through 2026.<\/p>\n The other upcoming election, if we can call it that<\/a>, is in Myanmar, which has been mired in a brutal civil war since the military coup in February 2021<\/a>.<\/p>\n Seeking legitimacy, the junta has called multiphase elections starting on December 28. Analysts and other nations, including Australia, view the vote as a means for the military to entrench power.<\/p>\n \u2013 Zach Hope, South-East Asia correspondent<\/p>\n![\"President](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/12\/bbfd06668a00a932d31deba42701acbc0e60d834.jpeg\")
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