Economics

America First

If what anyone saw at the G7 summit, from our elected representative leader President Trump, and was surprised, they haven’t been paying attention. From a personal behavior perspective, President Trump dealt with conflict the way he’s dealt with conflict in the public eye for four decades, be it personal, business, political or international.

He is, perhaps, the most consistent politician we’ve ever had in that regard. Like it or not.

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As for our approach to foreign policy and trade, the Trump administration has been pretty consistent as well. In my book, Sixteen: A Rational Account of an Irrational Election, I outline the likely Trump strategy, based on key players and transition messaging as it appeared as early as January of 2018.

On Trump-ism:

“There’s a commitment to a belief that the globalist surge of the European Union and the rise of China as the dominant global exporter stand in the way of a vision. That vision is one where the U.S. and our surrogate in the Middle East, Israel, can return the post WWII world order in which America stands alone against a godless global power—now China instead of the Soviet Union.

The belief Trump-ism anchors on is that globalism is destroying our society and that the journey from many nations to one global community strengthens others at the expense of Americans. For all we’ve done to police the world and prop up the economy with our huge American consumer base, Trump-ism is done making the world a better place for others at our own expense. It’s time to make America great again…”

On Global Trade:

“The two sides pulling on the rope in Trump trade policy are globalization and the sovereignty of the Trump state. If a nation desires globalization, it has to give up some power in determining its trade policy. If it wants more control over trade policy, it should be prepared to lose bargaining power in a globally integrated economy. The ebb and flow can be rationally managed and balanced to meet the best outcomes of the nation—especially if one weakens the hand of the global community.

Trump trade policy insists that global economic integration sit out the contest and let democracy and sovereign control of trade policy have a go at it. Let the people pick the leader. Let the leader pick the economy that delivers for the people. Everyone else get in line behind America. America First.”

2018 G7 Summit…check.

Though it’s hard to sort out exactly what is going on, who to listen to and who to trust in Trump America, all problems in their own right, one thing was reasonably clear to me as early as last fall when I finished the last chapter of my book.

The Trump trade worldview sets up this way:

The goal appears to be competition with China. The European Union and NATO are liabilities that don’t help us fight China. Weakening the EU and NATO benefits America. Strengthening Russia is a part of that strategy with little risk economically because Russia, compared to China, is a non-economic risk player. The same can be said for strengthening relationships with North Korea. If one can do this while signaling that it’s all in service to saving working class manufacturing jobs (not likely in reality) one can align trade, foreign policy and political strategies in a way that will be hard to counter in 2020.

It’s worth noting, the major global players will be China, Russia, Israel and a Trump-led United States. There’s not a modern liberal democracy in sight. That’s how wars get made…or at least they used to before we could just make them ourselves.

Here’s the kicker though. None of this has short term measurable implications that will drive change in advance of the U.S. mid-terms. Very little is likely before the 2020 Democratic Primary kicks off next year. Which means that Trump’s fate, like it or not, may be entirely connected to the state of the global economy in 18 months.

If it’s strong, Trump can claim victory. If it’s weak, we’ve blown up the global world order, weakened our leadership position and risked a trade war for nothing.

In reality, a global recession is coming Trump trade policy or not. We’re due. Whether it hits early enough for it to matter likely determines the course of the current recession of western liberalism for the near future.

That’s the game of chance we got when we elected Donald Trump president.

3 replies »

  1. I love it, and your insights are much appreciated as usual Sean. However, you should at least get the name of your own book right when referencing it. I know you must be pulled in a thousand directions lately, which is why having a good editor is always a benefit to someone in your shoes. Keep up the great work!

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