2017 moved beyond the bluster of the campaign trail to reveal a true modus operandi for President Trump, the political outsider who has rocketed from radical fringe to the highest office in the United States. His governing style over the course of the year reflected an eagerness to dismantle the Obama legacy on all fronts, whether on Cuba or Iran or within the UN climate framework. It showed a penchant for unleashing his trademark bravado on the world stage, though almost always without any real follow-up, as has been the case so far with North Korea. But most importantly, it revealed a near total lack of any ideological commitment in his overall foreign policy vision. The most coherent and consistent aspect of President Trump’s foreign policy through 2017 is that it’s mostly aimed for domestic consumption, and given that midterm elections are looming in 2018 – contests that could be ‘yugely’ consequential for Trump’s political future – this domestic fixation will surely persist in the year head.

Here’s what to look out for in year two of the Trump presidency:

NAFTA: ‘The single worst deal ever approved’

Scrapping the North American Free Trade Agreement (NAFTA) became a rallying call for President Trump and his base, who blame the agreement for shifting US manufacturing jobs to Mexico. Although Trump campaigned on killing the deal outright, once in office he was convinced by advisors to try and renegotiate the agreement before giving up on it altogether.

The renegotiation process has crashed and burned so far, in large part because the US team has been making some fairly tall asks of their Mexican and Canadian counterparts, including the dismantling of Canada’s diary protections, increasing domestic input requirements for auto parts, and implementing a rolling renegotiation of the trade deal every five years. The requests are falling on deaf ears. Both the Mexican and Canadian delegations are buoyed by growing nationalist, anti-Trump sentiment in their home countries; they have been maintaining a united front in the talks, and both appear willing to let the deal fail rather than give in the US demands.

Deadlocked negotiations would appear to be a boon for Trump’s original push to kill NAFTA. After all, the government only has until July 1 to agree to a new deal; that’s when its fast-track negotiating authority is set to expire. However, the midterm elections could change President Trump’s calculus on NAFTA. Several frontline states in the Senate election – Arizona (Republican Sen. Flake retiring), Indiana (incumbent Democrat Sen. Joe Donnelly), Ohio (incumbent Democrat Sen. Sherrod Brown), and Minnesota (incumbent Democrat Sen. Tina Smith and Sen. Al Franken stepping down) – are among the top state exporters to either Canada or Mexico. And although state-wide gross exports isn’t the only consideration in voter habits – a state like Ohio saw a wave of anti-globalization that got President Trump elected in the first place – the tale of post-2016 elections hasn’t been Trump failing to activate his base, but rather a drift of affluent suburban voters squarely into the Democrat camp.

Though it remains possible that Trump will simply kill NAFTA, as Goldman Sachs predicted in a recent memo, don’t be surprised if US demands suddenly soften enough for a new deal to be reached before July. Herein lies the true win-win for Trump: fixing the ‘worst trade deal ever approved’ (even if he doesn’t), and picking up some mainstream support in key battlegrounds in November.

Fighting the ‘bad guys’ in Iran, Pakistan, West Bank & Gaza

Iran

Right out of the gates, the Trump administration singled out Iran as a state-sponsor of terror that had gotten a free ride during the Obama years. The president’s hostility toward the Iran nuclear deal might be considered the cornerstone of his foreign policy for the MENA region, and even when protests broke out across Iran two weeks ago, Trump was connecting the dots to the failed appeasement of his predecessor. His eventual decision to decertify Iran’s compliance to the deal in October is Trumpian foreign policy in its purest form: aimed at a domestic audience (shows he’s being tough on Iran), but produces nothing substantial due to zero follow-up from either Congress or the president himself.

The year ahead will surely continue this trend, especially if sustained protests reinforce President Trump’s narrative of a freedom-loving people thwarted by the tyranny of the clerics. (Our own analysis of the protests found them to be largely motivated by bread-and-butter issues and unlikely to spill into a national movement like in 2008). Yet much like in 2017, Trump will restrict his bluster to the rhetorical realm rather than impose harsh new sanctions that could actually jeopardize ongoing adherence to the nuclear deal.

Pakistan

Pakistan is a newcomer to the US doghouse, but its relegation is already more consequential than that of Iran, which has become quite comfortable in the doghouse since first arriving in 1979. President Trump decided last week to cut some $1.3 billion in bilateral security assistance citing Pakistan’s failure to rein in terrorist networks operating within its borders. On the surface, the move seems to be another public showing of Trump’s tough-on-terrorism credentials. However, US support for Pakistan has long been a contentious issue, and one that transcends different political parties and administrations. Islamabad’s lackadaisical approach to the terrorist networks it views as useful/controllable is nothing new, and this behavior is often cited by those who want to cut off funding. On the other hand those who want to keep the money flowing point to the fractured nature of the Pakistani state, where civilian and military power blocs are often in open competition, and question whether a cut would merely weaken the country’s democratic institutions and eliminate Washington’s influence in a key nuclear-armed country. Put simply, this has been an enduring debate in US government. We may just see which side is ultimately correct in 2018.

West Bank & Gaza

The Trump administration made the most consequential decision in the Israeli-Palestinian peace process in years when it announced its recognition of Jerusalem as Israel’s capital along with plans to move the US embassy there. Whether the decision was motivated by domestic considerations or some bizarre belief that the peace process would benefit from taking the Jerusalem issue ‘off the table,’ it’s obvious that they did not expect the level of pushback they got and continue to get. PA President Mahmoud Abbas has stepped back from the peace process, declaring that the U.S. can no longer be considered a credible independent arbitrator. The Trump administration has responded by threatening to cut off funding to the PA, which President Trump tweeted has ‘no appreciation or respect’ for the U.S. and ‘[doesn’t] even want to negotiate a long overdue peace treaty with Israel.’ Expect 2018 to bring more changes to the Israeli-Palestinian peace process. President Mahmoud now finds himself in a difficult position: going back on his snubbing of the U.S. jeopardizes support among his own people, who predictably view the Jerusalem move as the height of betrayal. This leaves Mahmoud with two choices. He could either continue with the two state-solution and try to find another outside arbitrator, perhaps even a new donor as well should the U.S. shut off the funding taps. Or he could switch gears to a one-state solution, a move that would produce pushback from Israel given the demographic realities of absorbing the 1.7 million people living in the Gaza Strip and the 2.8 million in the West Bank, let alone the hundreds of thousands of refugees in neighboring countries.

Surviving the year ahead

There are a few major X-factors looming over President Trump as he heads into 2018: the Mueller investigation, which is sure to draw more people in and perhaps even the president’s own son; the political firestorm surrounding Michael Wolff’s new book; and the possibility of impeachment proceedings or – and far less likely – invoking the 25^th amendment which requires a 2/3 vote in both houses of Congress to remove a president that is ‘unable to discharge the powers and duties of the office.’

Though it remains highly unlikely that President Trump will be removed from office in 2018, all of these scandals and intrigues will continue to swirl around his administration, dominating its attention at the expense of US foreign policy. And with major appointments yet to be filled one year in (for example, there still isn’t a US ambassador to Germany), and the State Department left to wither on the sidelines, it’s safe to assume that any strokes of foreign policy genius in 2018 will be reactive rather than proactive.