Ivo Daalder, former U.S. ambassador to NATO, is a senior fellow at Harvard University’s Belfer Center and host of the weekly podcast “World Review with Ivo Daalder.” He writes POLITICO’s From Across the Pond column.
When U.S. President Donald Trump first met with then-German Chancellor Angela Merkel after his first term began, he told her that Germany’s lack of defense spending was a problem. It meant the U.S. had to spend too much. “Angela, you owe me $1 trillion,” he said.
In the end, Germany never paid a penny. But this exchange set the tone for how Trump would approach the presidency in his second term.
Whether a person, business, university, law firm, media company or country — Trump has used the power of the presidency to exact a price, often in dollar terms, from whoever he interacts with. It’s the unifying theme of his leadership and his approach to the world.
Donald Trump is the “Shakedown President.”
It started even before he won reelection. At a dinner in Mar-a-Lago with some 20 top oil executives in April 2024, Trump told attendees to raise $1 billion for his reelection campaign, which, he promised, would be a great “deal” because he’d cut red tape and lower their taxes on “Day One” of his presidency — and that was just the beginning.
Since returning to the White House, Trump has turned the Oval Office into the pay-to-play room: It’s where he met the managing head of venerable New York litigation firm Paul, Weiss and twisted arms to get $40 million in annual pro bono work for causes he deems worthwhile. In return, he rescinded an executive order he’d signed, barring the firm from federal contracts and its employees from holding security clearances.
Seeing the writing on the wall, eight other white-shoe law firms then followed in Paul, Weiss’s footsteps, signing deals with the administration that collectively promised more than $1 billion in pro bono services for Trump’s priorities.
Smelling victory, the president soon set his sights on other industries, starting with big media: He sued ABC and CBS News when they broadcast interviews he didn’t like and got them to pay $15 million and $16 million, respectively. The president reached multimillion dollar settlements with tech companies Meta and X. And while his multi-billion-dollar suit against the New York Times was thrown out, the Wall Street Journal’s is still pending.
Aside from the steep monetary value, these shakedowns have also made media companies more adverse to reporting criticism of the president and his administration’s actions.
Next came universities: Long the foundation of America’s scientific and technological supremacy, Trump cut off federal research funding for major universities in order to force them to adopt policies favored by his administration. Some institutions, like Columbia University, Brown University and the University of Pennsylvania, obliged, agreeing to pay eight-to-nine figure “fines.” Others, like Harvard University, resisted and have been financially squeezed, seeing their critical scientific research grants cancelled.Corporations haven’t escaped Trump’s crosshairs either, despite much of corporate America backing Trump in the latest election. He approved Nippon Steel’s takeover of U.S. Steel, but only after demanding a “Golden Share” in the company, which grants his administration extraordinary control and veto authority over operations and decisions. He also turned a government subsidy to Intel into a 10 percent stake in the company — with the option for another 5 percent down the road — and approved chip sales to China by Nvidia and AMD in return for a 15 percent levy on all sales.
Then, there are America’s trading partners, which are, notably, some of its closest allies. Here, Trump brokered remarkably similar and extraordinarily one-sided deals with the EU, Japan and South Korea, after threatening to impose tariffs of 25 percent or more on all imports from America’s largest trading partners in the Europe and Asia. He finally “compromised” at a 15 percent levy that was still six times higher than before and, of course, his victory has left the U.S. public as the real losers, facing higher prices on a wide variety of goods.
But that wasn’t all. Trump also exacted commitments from these governments to make large-scale investments in the U.S. — $350 billion by South Korea, $550 billion by Japan and up to $600 billion by European companies. Europe also agreed to purchase $750 billion in gas and other energy products over four years. And here’s the kicker: In most cases, Trump will control where the investment goes, and the U.S. will receive most of the profits — up to 90 percent in the case of Japanese investments.
In the short term, the Shakedown Presidency works. Individuals, law firms, media companies, universities and even countries calculate they’re better off paying a little than fighting a lot. And once one of them does, others follow. Pretty soon, it’s a billion here, a few hundred billion there, and it all adds up to real money.
But — and this is crucial — in the long term, this is bound to fail.
These shakedowns create massive resentment among those who bear the consequences. Clients, partners and associates search out other firms to bring their business to; readers, listeners and viewers tune out media companies they can no longer trust; and countries begin to shift to markets and partners that won’t use their interconnectedness to serve the narrow, selfish ends of one man and his administration.
So far, Trump has been able to shake down a good many individuals, succeeding as he picks off firms and countries one by one. But soon, everyone will get wiser and realize they have alternatives — and that when they unite, Trump will be unable to continue his shake down operations.
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