Back in January, in The World in 2025 Masterclass, Sundeep Waslekar warned that 2025 would test the world’s political, economic, and technological foundations. As the year ends, many of those predictions have not only come true, they’ve intensified. In Episode 2 of Founding Fuel’s 2025 in Review podcast series, Dinesh Narayanan sits down with Waslekar to unpack how Trump’s second term has deepened fractures within the West, eroded the very idea of international law, and fuelled a breakneck technology race that is outpacing global governance.
You can watch Episode 1 with Chinese economist Prof. Yao Yang here.
Key Takeaways
(Read Time: 2 mins)
1. Europe has capitulated to the US
Instead of the anticipated cracks, Western Europe saw consolidation under US influence, with Europe “subjugated” to America’s agenda.
Trump’s US insisted Europe buy American weapons, energy, and open up to US technology—demands that were broadly met, including the imminent dilution of the EU AI Act.
2. Political polarisation within the US has worsened
American politics became even more polarised, with Republicans shifting further right and Democrats further left.
The Democrats’ success in recent elections isn’t a swing away from the right—the wins were in the Democrats' traditional strongholds. Though there is a strong mood emerging within the MAGA faction against the “daily theater” in the White House, it doesn’t mean they will vote for the Democrats.
3. The US and China are finding ways to coexist
The US-China relationship, after the upheaval of Trump’s “Liberation Day tariffs”, has shifted towards pragmatic coexistence, with both nations opting for short-term, transactional arrangements. Despite recent tariff suspensions, America’s focus is on technological supremacy, especially in restricting chip exports to China and others. The dynamic is characterized by ongoing negotiations and the management of economic rivalry, not permanent resolution or trust-building. This is “relationship management”, not conflict resolution.
4. Short-termism and institutional breakdown
Trump openly disregards longstanding international agreements. The weakening of the regime of agreements—whether trade, economic, arms control, or political—is worrisome in the long run.
Israel’s invasion of several countries in the Middle East is an example of how a country with strong US support too is disregarding international law.
Trump is looking for very short-term solutions on every front. That is one reason why there is no breakthrough on Ukraine—Moscow doesn't want merely a ceasefire; it wants a longer-term security agreement for Europe.
5. The Middle East turbulence
The most striking example of short-termism was the White House welcoming the current president of Syria, once a wanted terrorist. All because Syria agreed to join the Abraham Accords with Israel (a set of agreements mediated by Trump to normalise diplomatic relations between Israel and Arab states).
Kazakhstan too will join the Accords—though it has had diplomatic ties with Israel for decades, it is doing it as a favour to Trump.
The core of the Abraham Accords is Saudi Arabia, Jordan, and the UAE building huge infrastructure connected to Israel. However, the people of the Middle East have a very different opinion and will not make it possible for them to build road lines and rail lines connecting Israel to the rest of the Arab world.
6. The US looks at Pakistan from a Middle East, not a South Asia lens
The new US ambassador to India is also Special Envoy to South and Central Asia and his geographical jurisdiction includes Pakistan.
7. The triple crisis: Institutions, morality, technology
The world now faces a “triple crisis”: battered international institutions, collapsing morality in international law, and accelerating technological disruption—each exacerbating the others.
Short-term diplomacy produces the illusion of stability but leaves the global system increasingly fragile.
8. The AI race is accelerating towards superintelligence
AI is fast moving towards “agentic” and physical forms (robotics), with self-evolving capabilities seen as probable in the near future; quantum computing progress is rapid, though mass impact is still a few years away.
Regulation lags—US tech leaders resist constraining current AI but accept future-focused rules to address threats like loss of control, mass manipulation, bioweapons, and cybersecurity risks.
Trump’s only “well-considered” policy this year: the AI Action Plan, shaped by thousands of public and expert inputs, focused on banning AI-enabled bioweapons and promising regulation for broader superintelligence.
Watch/Read Takeaways from Episode 1 with Prof Yao Yang on China and the Trumpian Reset
Coming Soon:
Episodes with
- Justin Logan, Director of Defense and Foreign Policy Studies, Cato Institute
- Philippe Le Corre, Senior Fellow on Foreign Policy, Center for China Analysis at the Asia Society Policy Institute, and Professor of Geopolitics and Asian Studies, ESSEC Business School
- Shyam Saran, former Foreign Secretary, Government of India
