Back in January 2025, at The World in 2025 Masterclass, Justin Logan, director of defense and foreign policy studies at the Cato Institute, warned that a surging nationalism at home would redefine America’s role abroad. As the year closes, many of those predictions have collided with reality—often in chaotic and unexpected ways.

In this candid conversation with Dinesh Narayanan, Logan reflects on a year marked by Liberation Day tariffs, the longest shutdown in US history, shifting defense burdens, unsettled alliances, and renewed domestic conflict. From the fragile equilibrium with China to America’s fiscal cliff and the politics of immigration, Logan argues that the US has entered a phase of persistent churn—one that could reshape global norms for years to come.

Key Takeaways

(Read Time: 2 mins)

1. Chaos is the strategy, not the byproduct

Even long-time allies struggled to interpret the logic of Liberation Day tariffs. Logan notes that the administration’s unpredictability—from sudden tariffs to the abrupt 90-day pause—is deliberate.  

2. Tariffs disrupted sectors, but didn’t break the US economy

The US is one of the least trade-dependent countries. The tariffs have been disruptive to certain sectors of the economy, but in the macroeconomic sense, the sky hasn't fallen. But Logan flags a deeper vulnerability: heavy concentration of market value in tech and AI firms like NVIDIA could amplify systemic risk.

3. No, this is not a G2 world

Despite talks after the Seoul summit (where Trump and Chinese President Xi Jinping met in Busan on the sidelines of the Asia Pacific Economic Cooperation summit), Logan argues the US-China relationship is not moving toward a stable “G2” structure. (Trump called the meeting “G2”). The Trump administration clearly wants to deal with China, but the administration’s tariff strategy was scattershot—“ready-fire-aim”—rather than aligned with a coherent China policy.

4. A major shift in US defense posture: fewer troops, more arms sales

The Trump administration wants to sell weapons to allies in Europe, Asia and the Middle East, so they can defend themselves—but is reluctant to send US troops.

At the 2025 NATO summit at the Hague, the European allies committed to spend 3.5% of GDP on defense by 2035, and another 1.5% on defense-related infrastructure. They're trying to prevent the administration from pulling the rug out from under them.

5. A clash is unfolding inside America’s defense industry

Battle lines are drawn between traditional defense primes and insurgent startups pushing small, scalable tech such as drones. Logan believes both will shape the future battlefield—neither model can replace the other.

6. America cannot afford its ambitions

America’s debt crossed $38 trillion and it is adding to that at the rate of $2 trillion every year. Logan says there is a “secular pressure” on defense spending. With Social Security, Medicare, and debt interest politically untouchable, the co-called war budget (to deter war) for the Department of War faces real constraint—it reinforces the push for allies to shoulder the burden.

7. Domestic tensions in the US have become a stable—and unsettling—equilibrium

There are really sharp disagreements about things that affect people in their everyday lives, a sort of culture war. The consolidation of power in the institution of the presidency means that the US could wind up whipsawing back and forth from one extreme to the other, depending on who occupies the White House.

8. Immigration remains politically explosive

Assimilation, not immigration per se, remains the flashpoint. The Catholic Church’s recent criticism, Logan argues, fits its long-held moral stance. It viewed some people in the US who were swept up in the immigration roundups as having been mistreated. Many of these people are Catholics, so the Catholic Church has a particular interest in its own members.

9. Short-term deals may be the new template for US-China engagement

Incremental bargains like the 90-day tariff pause and the one-year trade agreement indicate the administration is responsive to feedback. You're not going to get a fundamental transformation of bilateral or multilateral political economy relationships easily, hence the incremental moves.

10. Trump’s governing style has hardened

The president, in general, takes the norms that have loosely, if at all, constrained prior presidents, and simply blown them apart. Take the U.S. policy in Venezuela. On paper, it looks like a president doesn't have the authority to do those things. But the legislature doesn't have the tools to constrain the president. The legislature has delegated its power to the executive branch, giving it a tremendous leeway to do whatever it wants in international politics.

11. The H1-B visa issue is not settled

The MAGA base opposes expansion, while business and donors push for talent inflows. This conflict is far from resolved. The president himself is stuck. He has pressure on both sides. And this is going to roil particularly right-of-center politics for quite some time.

12. Expect continued churn for the rest of Trump’s term

Trump has a tremendous propensity for disruption, a tremendous appetite for a vision of American politics that still is miles away from where we are today.  

He learned from his first term that if you bring in a bunch of establishment people, they may not do what you tell them to do. So, he has surrounded himself with loyalists who will pursue his policies—and that lends itself to disruption to the extent the president himself wants disruption.

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Coming Soon:

Episodes with

• 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