Washington Newsletter: The voters have spoken. What comes next?

Presidential campaigns are about articulating a vision and making promises, and post-election transitions are about building the team and the capacity to deliver on those promises. This is the process that has captivated Washington and the world, as US President-elect Donald Trump constructs his Cabinet. Trump hopes that his hand-picked group of business leaders, current and former politicians, and Washington disrupters will help him implement as many of his policy promises as possible — at least before the 2026 midterm elections.

This edition of our Washington Newsletter tracks Trump’s progress, highlights leadership transitions that are also taking place in the House and Senate, and summarizes the must-pass legislation that’s in front of the current “lame duck” Congress.

We also bring you political updates from around the world:

• Five days before the US presidential election, UK Chancellor Rachel Reeves delivered the first budget of the new Labour government. After months of speculation, the scale of the numbers still surprised many: almost £70 billion a year of additional spending (more than 2% of gross domestic product), funded by a mix of tax hikes (£40 billion) and increased borrowing (£30 billion).
• President of the European Commission Ursula von der Leyen began her second (and final) term in December. Facing the major competitiveness challenges identified in the landmark report by former President of the European Central Bank and Italian Prime Minister Mario Draghi, as well as the additional headwinds of potential US tariffs, von der Leyen is under pressure to deliver a step-change in the EU’s economic performance.
• Despite being confirmed in office as the leader of a minority government in mid-November, Japanese Prime Minister Shigeru Ishiba’s position remains precarious. He faces internal discontent within his party, as well as real economic and foreign policy challenges as Trump’s election may mark a change in Japan’s relationship with the US.
• South Korean President Yoon Suk Yeol announced “emergency martial law” throughout the country, the first time this has happened in South Korea since the early 1980s. The announcement was followed by significant public and political backlash. Early the next morning, lawmakers forced their way into Parliament for an emergency session and voted unanimously to block the decree.

Read the full newsletter for more insight on how pending policies may impact the financial and geopolitical landscapes in 2025.