Trump’s Return: A Transactional Leader in a Complex World
Donald Trump’s second presidency marks the return of a leader who approaches governance through the lens of a business deal—where alliances, policies, and even legal constraints are negotiable if the proper leverage is applied. His transactional approach, defined by short-term victories, strategic unpredictability, and a disdain for institutional norms, has already begun to reshape the domestic and international landscape.
Unlike traditional leaders who operate within long-term diplomatic strategy and economic stability frameworks, Trump’s model is based on a winner-takes-all mentality. He is a leader who values loyalty over institutional integrity, short-term impact over strategic foresight, and executive power over collaborative governance.
The Transactional Approach: How Trump Views Power
Trump’s leadership style is built on deal-making principles, where political relationships are assessed on immediate benefits rather than long-term partnerships. This model reflects several key traits:
- Zero-Sum Thinking: Every policy decision is viewed as a transaction where one side wins and the other loses—a stark contrast to the compromise-based governance model favoured by most democratic leaders.
- Loyalty-Driven Decision-Making: Trump prioritises personal allegiance over institutional stability, which is evident in his appointments, pardons, and dismissals of officials who do not align with his agenda.
- Short-Term Gains Over Systemic Planning: Policies are often designed for immediate economic or political impact, disregarding long-term sustainability—as seen in his deregulation initiatives and trade policies.
- Unpredictability as a Strategy: Trump’s frequent reversals and contradictory statements create uncertainty, making it difficult for allies, businesses, and financial markets to predict policy directions.
While these tactics may work in the corporate world—where negotiation and strategic disruption can yield financial gains—in politics, they introduce volatility that undermines economic confidence, global stability, and democratic integrity.
Why This Approach Matters: The Global Consequences of Transactional Governance
Governments, unlike businesses, must operate within a framework of laws, ethical considerations, and long-term national interests. Trump’s transactional model challenges these principles by:
- Weakening institutional trust: By prioritising executive power and overriding congressional and judicial constraints, Trump’s governance style threatens the balance of power outlined in the U.S. Constitution.
- Destabilising diplomatic relations: Global alliances rely on predictability and mutual trust, which Trump’s unpredictable leadership undermines, weakening international cooperation.
- Increasing economic volatility: Markets rely on stability and policy consistency. When leadership is erratic and transaction-driven, it creates uncertainty that affects investments, supply chains, and global financial confidence.
Historical Parallels: When Transactional Leadership Goes Wrong
History offers cautionary tales of leaders who prioritised transactional governance over institutional stability.
- Herbert Hoover (1929-1933): The Cost of Economic Nationalism
- Hoover’s protectionist Smoot-Hawley Tariff Act (1930) triggered retaliatory tariffs worldwide, exacerbating the Great Depression.
- Trump’s renewed emphasis on tariffs mirrors this approach, risking similar economic fallout if global trade partners retaliate.
- Richard Nixon (1969-1974): The Dangers of Executive Overreach
- Nixon’s contempt for institutional limits, exemplified in the Watergate scandal, eroded public trust and a constitutional crisis.
- Trump’s challenges to judicial and congressional authority, particularly regarding ethics rules and executive power, could set a similar precedent for unchecked presidential authority.
- Silvio Berlusconi (Italy, 1994-2011): A Businessman in Politics
- Berlusconi, a billionaire media mogul, governed Italy with a business-first approach, prioritising personal interests over state stability.
- His tenure was marked by legal battles, conflicts of interest, and economic stagnation—a scenario Trump risks replicating with his financial ventures while in office.
The Risks of Treating Global Politics Like a Business Deal
While transactional leadership may yield immediate gains, it poses long-term threats to global stability, economic security, and democratic governance. Trump’s model of leadership carries several high-impact risks:
- Erosion of International Trust: Allies may reduce cooperation with the U.S. if agreements are viewed as temporary and subject to reversal.
- Economic Isolationism: Protectionist policies may spark trade wars, harming global supply chains and business investment.
- Increased Military Tensions: Unilateral decisions in the Middle East, Asia-Pacific, and NATO could destabilise regions and escalate conflicts.
- Domestic Institutional Decline: The U.S. Constitution is designed to prevent executive overreach—yet Trump’s approach tests the limits of these safeguards.
A High-stakes Presidency with Uncertain Outcomes
Trump’s return to power marks a turning point in modern governance. His transactional model, rejection of institutional constraints, and short-term economic strategies present opportunities and unprecedented risks. While some industries may benefit from deregulation and tax incentives, long-term economic stability, diplomatic relations, and social cohesion face serious threats.
For businesses, investors, and policymakers, the next four years will demand adaptability, strategic foresight, and contingency planning to navigate the unpredictability of a transactional presidency.
Eric Allgood
Eric Allgood is the Managing Director of SBAAS and brings over two decades of experience in corporate guidance, with a focus on governance and risk, crisis management, industrial relations, and sustainability.
He founded SBAAS in 2019 to extend his corporate strategies to small businesses, quickly becoming a vital support. His background in IR, governance and risk management, combined with his crisis management skills, has enabled businesses to navigate challenges effectively.
Eric’s commitment to sustainability shapes his approach to fostering inclusive and ethical practices within organisations. His strategic acumen and dedication to sustainable growth have positioned SBAAS as a leader in supporting small businesses through integrity and resilience.
Qualifications:
- Master of Business Law
- MBA (USA)
- Graduate Certificate of Business Administration
- Graduate Certificate of Training and Development
- Diploma of Psychology (University of Warwickshire)
- Bachelor of Applied Management
Memberships:
- Small Business Association of Australia –
International Think Tank Member and Sponsor - Australian Institute of Company Directors – MAICD
- Institute of Community Directors Australia – ICDA
- Australian Human Resource Institute – CAHRI
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