Donald Trump has pledged to reset the White House policies on "America First" basis. But will he deliver?

Around the world, there is great apprehension and much speculation about potential Trump scenarios. For all practical purposes, the Trump administration's ability and willingness to achieve its stated objectives can be illustrated with three probable scenarios.

'Walking the talk'

The first scenario is that Trump will "walk the talk." This is what his constituencies expect. Consequently, any moderation risks being seen as a betrayal. In this scenario, Trump is more likely to walk the talk than not, as evidenced by his new trade policy appointments. In this view, Trump administration is set to reverse 70 years of US-led free trade regimes.

'Sober realism'

The second scenario is that, as candidates, American presidents say one thing, but, as president, they do something else. President George W. Bush promised "passionate conservatism," but achieved war and deficits. President Obama pledged massive changes but ended up fostering the military-industrial complex, which led to Eisenhower's warnings already in his Farewell Address in 1961.

In this view, Trump will adjust to realities.

Yet, Trump is not a typical conservative, cautious, bland-speaking CEO. While Trump will have to adjust his stated objectives in an unpredictable global landscape, he will enjoy extraordinary execution power. Today, Republicans control the White House, the Senate and the House of Representatives. Consequently, whatever the administration will decide to do is likely to be bigger and bolder, move ahead faster and have greater consequences.

'White black swans'

The most unpredictable, yet potentially most devastating scenario is the "white black swans" scenario. In this view, Trump administration may make policy mistakes, which can result in low probability but highly consequential adverse consequences.

That's what happened in the 1930s with the Smoot-Hawley Tariff Act, which initially seemed to work quite well but soon caused other nations to retaliate with even higher tariffs and barriers, which ultimately paved the way to a world war.

Today, the Trump administration's protectionist initiatives may at first strengthen the US dollar and even markets.

But over time, a stronger dollar will make US exports less competitive and defuse exuberance in markets.

More importantly, unilateral tariffs tend to result in tit-for-tat unilateral retaliation, which will mitigate the benefits of the original tariff and compound costs over time.

In the coming months, all Trump initiatives — including the administration's proposed tax cuts, trade policy, manufacturing plans, infrastructure investment, stricter immigration, climate change reversals, balancing power games, military spending and so on — should be seen in light of these three scenarios.

Nevertheless, the early signs suggest that the Trump administration will, at least initially, shun sober realism and walk the talk. And that, unfortunately, translates to greater potential of 'white black swans' over time.

Dr Dan Steinbock is the founder of the Difference Group and has served as the research director at the India, China, and America Institute (USA) and a visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more, see http://www.differencegroup.net/ Shanghai Daily condensed the article.