The Elephant in the Room is Trumpeting: What the United States’s swing toward isolationism means for global economic cooperation.

By Alice Sharma, Freya Phillips National Scholar, 2024 IMF & World Bank Annual Meeting

At the 2024 International Monetary Fund and World Bank Annual General Meeting, I was

struck by the presence of an enormous, orange elephant. Obfuscated but not entirely hidden

by the festivities of the 80th anniversary of the Bretton Wood Conference, this elephant sat

squarely in the middle of the AGM. Whispers were heard in the cafeteria (yes the IMF has a

cafeteria and yes it serves sushi), though no one dared to look at it. Occasionally, someone

would muster up the courage to point in its general direction. But, even then, it was only ever

referred to vague euphemisms. The “latent trade policy shift” was my personal favourite.

This elephant was of course, that of the potential election victory of Republican Donald

Trump, whose isolationist rhetoric threatened to seriously upend international economic

architecture in favour of a more aggressive America First trade policy. While the twin

institutions had managed to weather Donald Trump's first term relatively unscathed, the

ideological blueprint of Project 2025 spelt out in no uncertain terms the desire for the US to

withdraw completely.

“The Donald can’t torch all of this” a gentleman at the cafeteria confided in me, no doubt in

an attempt to soothe my anxieties. It worked. I would trust anybody who referred to the 45th

president by his first name. “It’ll swing back if it does”, he added.

He had a point. Historically, the US’s trade policy, closely linked to its foreign policy, has

swung in a pendulum from internationalism to isolationism. On one ambitious end, there are

calls for the United States to use its economic and political hegemony to intervene in the

global economy and usher in an era of free, global cooperation. On the opposite end, there are calls for restrained policy that prioritises internal affairs. Ideally the pendulum swings back and forth and all is well.

A little less than a year on however, and the elephant has begun to trumpet. Loudly. The

pendulum swings to the very edge.

It started with the execution of US AID. It was quickly followed up by a flurry of executive

orders including a withdrawal from the WHO, a funding freeze and judicial blockade at the

WTO. This is not simply a rollback of global commitments, but rather, reflects a zero-sum

worldview that forms the bedrock of Trumpism. One that is fundamentally incompatible with

the pro-globalisation ethos that the IMF and World Bank have long championed. Strangely,

amidst the institutional bonfire, the IMF has fared relatively well as of yet. Not exactly

beloved but spared. The current Treasury Secretary, Scott Bessent, has publicly affirmed the

Fund’s "enduring value" though not without caveats. In his speech, he accused the IMF and World Bank of “mission creep”, spending too much time on “climate change, gender, and social issues” and not enough on what he termed their “prescribed mandates”, whilst the World Bank was also criticised for expecting “blank checks for vapid, buzzword-centric marketing.”

Yet for all the chest-thumping, a full withdrawal remains unlikely. The real power from the

administration lies not in exit, but in leverage. Threatening to walk away, much like Trump's liberation day tariffs, is a way to bend institutions into alignment without forfeiting the influence that comes from staying in the room. Complete disengagement would deprive the US of one of its most potent tools: the ability to pursue bilateral interests under the guise of multilateral legitimacy.

For the Fund and the Bank, this creates a deeply uncomfortable dilemma. How do you deal

with a shareholder who doesn’t just disagree with your direction, but openly resents your

existence in your current form? The elephant is no longer sitting quietly. It's stomping around the room. And the real question now isn’t whether the pendulum will swing back, it’s

whether there will be anything left standing when it does.

There is a fine line between responsiveness and capitulation. And it is not at all clear on

which side the institutions will stand.

-------

The views and opinions expressed by Global Voices Fellows do not necessarily reflect those of the organisation or its staff.