Trump Is No Loser, But Government Will Be Harder

You know the shot: “We finally really did it,” Charlton Heston contemplating the ruins of the Statue of Liberty. Well, the Statue and what she symbolises will survive the Trump presidency but that scene from Planet of the Apes leapt into my mind as I sat in a Manhattan restaurant on election night with a crowd of startled Republicans, some pleased, some not, watching another compelling drama lurch to a conclusion that most of those there, including me, had not anticipated.

So, what had “we” done? Well, by voting for Trump, or hazy Gary Johnson, the Libertarian (as I did), or crazy Jill Stein (the Green) or, in many cases, by not voting at all, Americans had rejected Hillary Clinton, the direction the country was going, or both. But it was not that much of an endorsement of The Donald. Trump has his fans, to be sure, but, even allowing for the polarisation that such figures generate, he proved to be a most unpopular populist, the most unpopular major party presidential candidate in American electoral history. He was, however, the handiest brick to throw through the establishment’s window.

What we can now expect, absent some last astounding scandal, is that Donald Trump, bully, braggart, billionaire (presumed), and defendant (currently) in some 75 lawsuits, will soon take up residence in 1600 Pennsylvania Avenue, the first president never to have held earlier elective office or served in the military. But that won’t stop him benefiting from the way that the legislative branch — and this is a bipartisan offence — has acquiesced for some time now in the transfer of power to the executive.

Barack Obama: “We’re not just going to be waiting for legislation . . . I’ve got a pen and I’ve got a phone.”

Trump will also have Congress — and a Supreme Court nomination — in his pocket.

Working out what Trump will do with the power heading his way is not made easier by his pronouncements over the years.  The Donald is always sure, but in sometimes inconsistent ways. In 1999 he was sure about a one-time “net worth” tax on the very rich to wipe out the national debt. He was also sure that the Republicans were “just too crazy right” for him to remain in the party. He was “very pro-choice” then; now he is “very, very proud to say that [he is] pro-life”.

Looked at kindly, this shows a willingness to change his mind; looked at less benignly, it shows a willingness to play to whoever is in the room, but running through it all is his conviction that he has the answers.  “Nobody knows the system better than me,” Trump told the Republican convention, “which is why I alone can fix it.” I alone: what’s right is what Trump says it is — I, I, I.

Party affiliation provides less of a clue than it might. Trump, a former member of the Democratic, Reform and Independence parties, enjoys an equivocal relationship with a GOP that he has hijacked, or at the very least exploited, taking advantage of its resources, its people and its brand when it suited him, bypassing them when it did not, helped by his money, social media, the power of celebrity — and the fact that his revolt against the GOP’s establishment actually increased his appeal to many Republican voters.

In an attempt to reconcile these contradictions he hired Reince Priebus, the chairman of the Republican National Committee, as his chief of staff on the same day as he picked Steve Bannon as chief strategist and senior adviser. Chalk meet cheese:  Priebus is establishment, Bannon is a bomb-thrower (there are harsher words), the executive chairman of the hard-right, sometimes dog-whistling Breitbart News and the former CEO of the Trump campaign. Bannon’s appointment announced that the revolution continues; choosing Preibus was a signal that members of the old regime were welcome to help ensure that it would be professionally run and, whisper it discreetly, be less of a breach with the past than some feared. As the old saying goes, people are policy. And, as I write these words, the news flashes across the screen that former Goldman Sachs partner Steven Mnuchin “has been recommended by Donald Trump’s transition team to serve as Treasury Secretary”.

Whether such recruits will be able to steady the controls on the Trump train must, however, remain an open question for now, dependent on who else is along for the ride, and who, beyond his immediate family, Trump will listen to. The operation of his fractious and chaotic campaign is not an encouraging precedent.

And how, once in the Oval Office, will Trump run his team?  One guess — the reassuring guess — is that he will set a general course and then delegate much of the day-to-day business to, maybe, his Vice-President, Mike Pence, a former congressman and current governor of Indiana, and, therefore, someone with both legislative and executive experience and good connections in Washington. He is someone who could, presumably, work well with Priebus.

Backing that up is the idea that The Donald is the dog that caught the car. In all probability, Trump never thought he’d be the Republican nominee (and nor, it’s credibly suggested, did he want to be). He almost certainly never thought that he’d end up in the White House, a job that promises the pomp he relishes, but circumstances that are a lot less fun than the billionaire frolics he has enjoyed for decades.

“If Donald,” wrote Colin Powell (no fan) last June, “were to somehow win, by the end of the first week in office he’d be saying ‘What the hell did I get myself into?’” On the other hand, Trump has sold himself — and quite genuinely sees himself — as the master of the deal. Thus he claims to favour free or, more accurately, freer trade, but not “stupid trade”, and stupid trade is, he jeered in 2015, the result of deals negotiated by “political hacks and diplomats”. The US has, he reckons, “the greatest negotiators in the world, but we don’t use them”. Something tells me that he considers Donald J. Trump to be one of those world-beaters, and that, when it comes to rewriting America’s trade deals, he plans on being very much involved. He has boasted of hiring the best and then letting them get on with it, “but I always watch over them”.

To be fair, this is what many Trump voters want him to do. The Donald has, for decades, marketed himself with remarkable success and occasional accuracy as mogul and wheeler-dealer. He has been hired as a businessman, to do for his country what politicians could not.

Trump the dealmaker will see politics as transactional and turn his talents to diplomacy, trying to rework Nato, say, or America’s poisonous relationship with Putin (“I think I’d be able to get along with him”) or with China, the last a relationship where trade disputes and great power rivalry could intersect in dangerous ways.

The greatest negotiators in the world are going to be busy, and if they apply the brinkmanship, bad faith and histrionics that typically come with big-ticket real estate transactions, the world will be in for sleepless nights, nights made more fraught still by Trump’s long-held belief that negotiation is a zero-sum game. There are only winners and losers, and Donald Trump is not a loser. 

But, for all this uncertainty, there are themes certain to be reflected in the policies that will be pursued by a Trump administration. Pre-eminent among them is his suspicion — shared by many Americans — that the US is being ripped off by its partners, whether in trade or in defence. As far back as 1987, Trump spent nearly $100,000 on full-page newspaper ads in which he maintained that Japan (then regarded as America’s main economic challenger) was free-riding off America’s willingness to pick up the tab for the country’s defence. He argued for a different approach: “Make Japan, Saudi Arabia, and others pay for the protection we extend our allies . . . ‘Tax’ these wealthy nations, not America . . . Let America’s economy grow unencumbered by the cost of defending those who can easily afford to pay us for the defence of their freedom. Let’s not let our great country be laughed at any more.” 

Nearly 30 years later, Trump was making a similar case to the New York Times (and not only the New York Times), except that the list of freeloaders now included most of Nato, run on a basis that he described as “unfair”, an adjective that, with its synonyms, has long been a bad, bad word in the Trump lexicon. In keeping with The Donald’s paranoid style, it hints at hostile conspiracy. Remember all that talk of a “rigged” election? But back to Nato: the US, Trump complained, was paying a “disproportionate share” of the freight.

He has a point. Currently America pays a little over 20 per cent of Nato’s direct costs, a number which is adjusted regularly and based on a percentage of its share of the alliance’s collective GNP. That seems reasonable enough (and, as these things go, the number is not huge), but the real problem concerns something far larger. The US effectively accounts for more than 70 per cent of all defence spending by Nato members. Some of that mismatch reflects the global reach of American power, not all of which is of much benefit to other Nato states either directly or indirectly, but even so.

More damaging still is the fact that so few Nato states meet the organisation’s decade-old commitment to spending at least 2 per cent of GDP on defence, a commitment only satisfied by five out of the Nato 28, something that also led Barack Obama to talk of “free-riders”, and he was far from the first American president to grumble. The US shells out some 3.6 per cent, mighty Greece comes next with 2.4 per cent and the only other countries to hit the target are the UK, Estonia and Poland.  France comes close with 1.8 per cent, and the other Baltic States are, wisely, scrambling to catch up. The rest of Nato falls far short: Angela Merkel may be being hailed by some as the leader of the free world in the wake of Trump’s triumph, but her country only spends 1.2 per cent. Others are even stingier: Canada, home of Justin Trudeau, hero of Davos, coughs up just 0.99 per cent.

Trump has hinted that Nato countries that don’t pay their way might not be able to count on the US coming to their aid as required by the mutual defence obligations that underpin the alliance. He has since backtracked somewhat, and the optimistic take is that those remarks were simply an example of Trump the negotiator at work, putting pressure on partners in breach of their part of a deal. Maybe, but Trump is playing a dangerous game. Deterrence must be credible. Any suggestion that America would not protect a vulnerable Nato ally increases the chance that Putin might be tempted to try his luck. This only underlines the importance of Trump’s security and diplomatic hires. For Trump to pick hawks, like, say, John Bolton, a former US ambassador to the UN, or former New York City mayor Rudy Giuliani, would send one message; recruiting former Speaker of the House Newt Gingrich (who has described Estonia as “a place in the suburbs of St Petersburg”) quite another.

But Russia’s leader is more cautious than often understood. Much has, rightly, been made both of Trump’s need to win and — how shall I put this — poor anger management skills. Putin is unlikely to want to provoke The Donald, and, contrary to the fears of some critics, he can only go so far in wooing him. Yes, both men have strong authoritarian streaks (under Trump, America will be grateful for the checks and balances still built into its system), both see themselves as tough guys and both reject the attempt to create a supranationalist world order — in Putin’s case, by word and deed; in Trump’s, so far, only by word. “Americanism”, he has declared, “not globalism, will be our credo.” But these similarities will not be enough to transform Trump into Putin’s patsy. Trump evidently (and not unreasonably) doubts that Russia poses an existential threat to the US — he seems ready to co-operate with Moscow in Syria — but if Putin pushes Trump in ways that Trump thinks matter, Trump will push back.

But what Trump thinks matters will differ from what the US has thought mattered in the past. There is some point, he has said, beyond which America “cannot be the policeman of the world”, a line that resonates with those communities, many of them in regions that voted for Trump, who have lost so many of their own in wars where the US was doing just that. 

One corollary of Trump’s more modest view of America’s role is that US allies will — if they are serious about it — have to assume more responsibility for their own defence than in the past. Another is the implicit recognition that the global political system is multi-polar, something that Putin has long claimed and the Chinese have not even had to bother mentioning. That, in turn, may well imply a return to realpolitik that is closer to Nixon/Kissinger than Reagan’s loftier vision, let alone George H.W. Bush’s nutty “new world order”. The debate — and the pushing — will not be over the existence of spheres of interest, but over the location of their boundaries, something that may have grim implications for borderlands such as Ukraine.

Trump insists he is not an isolationist, and I don’t think that he is. He is planning a major increase in defence spending. Where he sees threats, whether it’s the Iran deal or IS, he does not wish them away. That said, he does not appear to have learned enough from seeing what Obama’s leading from behind has led to. When the US withdraws, the vacuum can be filled in dangerous ways. Trump is correct that America’s allies ought to pay more for their own defence, but an overly forceful insistence on this will lead to a fraying of both the transatlantic alliance and America’s partnerships in Asia. The consequences are hard to predict, but will inevitably involve a dilution of America’s ability to control what happens next.  That’s unlikely to end happily.

These consequences will be worsened by the new administration’s policies on trade and the environment, which, whatever their merits, will be seen as further evidence that the US is going its own way. And in Europe, at least, the more hard-edged side of Trump’s domestic agenda, not to speak of the spectacle of, to some, an ugly American beyond all caricature taking up residence in the White House, will do even more to stoke up the anti-Americanism forever soiling the continent’s intellectual and political life.

That won’t deter Trump. The president-elect has already appointed Myron Ebell, a leading climate change sceptic from the Competitive Enterprise Institute think tank, to oversee his environmental transition team. Reversing Obama’s climate change regulation, much of which he introduced by executive order (and what was brought to life by the pen can be killed by the pen) while initiating America’s withdrawal from the Paris climate accord (legally, a more complex process) are obviously, so to speak, in the pipeline. It’ll mean  yet more international opprobrium, so add it to the pile. Domestically it will enrage those who are already enraged by the prospect of a Trump presidency, but it will reassure many of his supporters — who are in for quite a few let-downs in the years to come — and, as a gesture of support to Team Trump’s symbolically important coal miners, will go down well with the Donald’s crucial blue-collar supporters. 

When in 2012 Trump tweeted that global warming was, in essence, a hoax (he later said that he was joking), he blamed the Chinese: “The concept of global warming was created by and for the Chinese in order to make US manufacturing non-competitive.” Conspiracies, always conspiracies, trade, always trade: when, 30 years ago, Trump was attacking the way the US paid so much towards the defence of its allies in the Far East, much of his focus was on the way that the money saved had helped build up economies that, he implied, had got too strong for America’s good. Asked in 2016 by the New York Times for his view on previous presidents, he replied that one he “really liked” was Ronald Reagan but  he had “never felt on trade we did great” in the Reagan era. 

Reagan was neither a purist nor naive (he believed in trade that was free and fair). He was not above pushing “voluntary” restraint on importers and imposing tariffs when he felt had to, but protectionism, he argued, was “almost always self-destructive”. He proposed a free trade pact with Mexico  in 1980, a forerunner of sorts for the North American Free Trade Agreement (Nafta) passed a decade and a half later. Trump recently described Nafta as “the worst trade deal maybe ever signed  anywhere”. He had opposed it even before it was approved, reportedly on the grounds that US negotiators had cut a bad deal. What Trump actually meant was that he could have handled everything so much better. 

Trump has been harping on about trade for a long time and often in a way that, reflecting his zero-sum approach to negotiation, focuses on the failure to cut a better deal. This approach slips easily into a preference for mercantilism over free trade, a choice that fits neatly under the umbrella of America First, and helped deliver the voters who had found themselves on the wrong side of globalisation, voters, particularly in the Midwest, who took Trump over the top on election day.

Trump’s victory will finish off the Transatlantic Trade and Investment Partnership with the EU, a deal already struggling even to be stillborn. The Trans-Pacific Partnership seems set for the knacker’s yard too. No new free-trade deals can be expected soon — even, I suspect with Brexit Britain. Reversing those large agreements that are already in place will be more difficult, however. Trump’s talk of imposing a 45 per cent tariff on Chinese imports if the People’s Republic doesn’t ease up on subsidies and other practices he views as unfair, would lead to higher prices in America and, eventually, slower growth, something he must understand. That 45 per cent should be seen as an opening bid in a long negotiation.

Similarly, Trump’s threat to pull the US out of Nafta (a move a president could make on his own) and impose a 35 per cent tariff on some Mexican imports risks major disruption to the supply chains of American companies, and could trigger a trade war, higher prices in the US, and, if the Mexican economy falters, a fresh surge of illegal immigration into a certain country to the north with an as yet unbuilt wall. Once again, sabre-rattling today is likely to be no more than the beginning of a negotiation that may be noisy, but will change relatively little.

But trying to rein in globalisation is to fight a war that is largely lost and, so far as the workplace is concerned, increasingly irrelevant. US manufacturing output stands at an all-time high, but manufacturing employment has declined to levels last seen in the late 1940s. Quite a number of Trump’s “forgotten men and women” (a phrase with Depression era echoes) lost good jobs and good pay, not to the Chinese, but to automation — to the robots. Many, many others will suffer the same fate, and no politician, left or right, establishment or populist, really knows what to do about it. This time round, Trump benefited from these fresh additions to the ranks of the early 21st-century’s left-behinds, but if he cannot come to their rescue (he can’t) they will look for help elsewhere, quite possibly to a Democratic party shifting rapidly to the Left.

Meanwhile, Trump’s answer to the economy’s woes is to propose what chancellors of the exchequer once called a dash for growth, combining Reagan-style tax-cutting and deregulation with a $1 trillion infrastructure package, much of which would be financed by the private sector, incentivised in turn by tax credits. As with a great deal of Trump’s programme the details are vague, but it’s a reminder that, even if Trump is again a Republican, he is attached to no one wing of the party. If tax-cutting and deregulation is Reaganesque, upgrading the country’s dilapidated infrastructure harks back to Eisenhower, architect, among other grands projets, of the Interstate Highway System and, as National Review’s Reihan Salam has argued, to Nixon, who (unlike Eisenhower) posed as an opponent of the elite, but, like the general, saw a role for big government. Similarly, Trump will defend the big entitlement programmes — from Social Security (pensions), to Medicare (health care for the elderly) to, perhaps with some tweaks, Medicaid (healthcare for the poor). He knows what his voters want, which is why he is already signalling that his repeal of Obamacare may not be quite as comprehensive as he has promised in the past. The way that Obamacare is structured may be unloved, and the way that it functions is flawed (sharp increases in Obamacare premiums probably played a part in Clinton’s defeat), but chipping away at its benefits will be a hard sell, unless the GOP can find a more credible replacement than it has managed to so far.  

How will all this be paid for? Trump is hoping for a supply-side miracle, with another boost coming, fingers crossed, from the repatriation of corporate funds stashed overseas after the sharp cuts in America’s corporate tax rate (on some measures amongst the highest in the world) that he has in mind. On the other hand, the GOP’s green eyeshade wing, headed by House Speaker Paul Ryan, will be less than convinced by Trump’s maths and with worries over the federal government’s nearly $20 trillion debt likely to increase as interest rates move up, there will be battles to come, battles that will be a reminder of deeper fractures that Trump has opened up on the right, battles in which Democrats, at least on the infrastructure plan, may find themselves in a very strange place, by Trump’s side.

That won’t be the case on immigration. Even if Trump is already backtracking on that wall of his (some of it will be fence, apparently), a much tougher immigration regime will be put in place. The president-elect has already announced that he would like to see the deportation of 2-3 million illegal aliens with “criminal records”, an exaggerated number, which also makes no distinction between different types of criminal past. Americans are uncomfortable with the thought of mass deportations and they are unlikely to approve of breaking up a family over a minor conviction from decades ago. If Trump’s immigration plans are not to be swept away by a tide of revulsion, he may have to go more carefully than he thinks, and not just in this respect.

Nevertheless, immigration, both in its own right and as a proxy for wider ethnic and demographic unease, goes a long way to explaining why The Donald will be moving into the White House. If the country can finally assert control over its borders (and the wall is not the best way of doing so), it can regularise the position of those illegals who remain (there are currently estimated to be a little over 11 million of them in the US). Then a long-overdue serious debate over immigration can begin.

November’s election result would only have been possible in a troubled, deeply-divided nation. Time will tell whether Trump’s victory is another symptom of what ails the country, or the beginning of a cure. I’m not optimistic. Then again, Newt Gingrich (after a job?) exults that “a Trump administration is going to be among the most extraordinary, creative, inventive, exciting periods in all of American political history.”

It’s going to have to be.