trump

This article mainly focuses on the implications on China in the political, economic and strategic dimensions following Donald Trump’s presidency. Although one could be correct to argue that the ‘dust has barely settled’ with regard to the Trump presidency’ – and therefore that it is too early to predict whether he will follow through with the polices he discussed throughout his campaign trail or will implement those that his advisers instruct him to do or might even have a middle ground between the two – the election itself has reflected many things about American public attitude to what trump said.

Despite the “misogynist”, “racist” words that he uttered during his campaign trail, which many followers of American politics are unfortunately all too familiar with; the possibilities of change still blows in the wind. This change of course limits itself to an alteration of attitude to the degree that allows trump to not “back down” from any of his comments but to effectively ‘sweep it under the rug’. But the change will have to be done quickly and effectively as America has already witnessed post-election violence; something it is not used too.

However this article does not base itself entirely on what may or may not take place under the president elect. Instead it briefly touches on some of the possible implications to the China – US relationship and the possible avenues that might be taken under a Trump presidency in this regard. In analyzing this area, the article also passes through the implications it may have on a global scale. Albeit the president elect has carefully worded his thoughts and attitudes since being elected, the possible stances on China which he took throughout the election had significant traction and are therefore hard to back away from.

The 45th president of the United States according to his own words inherits a “broken economy.” While his speech focused on rebuilding the economy it is still questionable whether his polices would get the American economy out of the “quagmire” that it is currently in. However in comparison to the 2009/2010 period the American economy is stabilizing but this is not being sufficiently reflected in the lower middle class or middle class family incomes. This some say is one of the major drivers that led to a Trump presidency.

“On the campaign trail, Trump admitted the economy wasn’t something he looked forward to tackling. In a January interview with “Good Morning America,” he offered up a bleak assessment and added that, in terms of fixing it, it’s a task he’d rather skip. “We’re in a bubble,” he said. “And, frankly, if there’s going to be a bubble popping, I hope they pop before I become president because I don’t want to inherit all this stuff. I’d rather it be the day before rather than the day after, I will tell you that.

He later rolled out other policies and positions: a major tax code overhaul; repeal and replace Obamacare; renegotiate or “break” NAFTA; stop hedge funds from “getting away with murder” on taxes; reforming the Veteran’s Administration; and impose import tariffs as high as 35%.”1

Now while all of these policies will require both political commitment and a strong aspiration to changing the existing structure; no one doubts that Trump has both. What many political gurus do believe that might restrain him is the advice of the existing establishment of President Barack Obama. Some believe that “President Trump will do less damage, domestically and internationally, than what is feared he will unleash, simply because stultifying American bureaucracy makes no distinction when thwarting the vaulting ambition of the best and worst in politics.”2 Whether he will continue with the existing members of the establishment or utter his famous words in the Apprentice – “your fired” – is something we will have to wait and see.

While many political analysts, think tanks and observers of the US politics were proven wrong in their analysis and polls; even today they struggle to define the reasons why Trump ascended to power and whether Trumps accession to power reflects the American populace wholeheartedly subscribing to the phrases and comments throughout the election trail or whether it was the perceived disgust towards “establishment candidates” that created this phenomenon.

Richard Heydarian, a political analyst of De La Salle University recently commented that a striking similarity between President Rodrigo Duterte and Trump was that both are mercurial yet populist in nature. What Trumps election win, means for Marie Le pen of France and other leaders we can only guess. While it resulted in a strong enthusiasm among such populist leaders of European countries it remains to be seen how far this wave would carry forward.

What will a mercurial character mean for China? According the Heydarian, “Trump also doesn’t seem to have much concern about the territorial dispute in the South China Sea and this will leave the Philippines to have to deal with China, which could mean the country will be more on the mercy of China.”3 But a mercurial character may have a sudden change of heart and decide that it is in American interests to ensure that an American presence is required in the South China Sea. Although this may challenge the presupposed propensity of following through with all his election promises; people from democratic forms of government know that is rarely, if ever, that all the policies articulated in an election campaign is followed through.

Commenting on a Trump foreign policy, Dr. Eduardo C. Tadem writes that:

“A Trump presidency will be a more inward-looking United States government. The US vote is basically a vote against untrammeled globalization and its negative impact on middle American households and the working class. As the US looks inward, it will be  less of a global leader and will cede such role to the BRICS countries but more especially to China and Russia. Welcome to the United States as a third-rate world power, which may not be such a bad thing for the rest of the world.”4

Whether one ascribes to the views of Dr. Tadem or not, the possibility of an isolationist USA is something that is definitely on the table. While an isolationist foreign policy by America would be approved in some parts of the world it may not be by others. Trumps own claim that the United States can no longer be the “policeman” of the world has resulted in a shudder among European leaders; it may also be a very positive future for an authoritarian dictator to rise.

What implication does this have on China? Well for one, China has no strings attached in economic loans and aid in the manner that the US does. China’s soft power operates in different ways. While the US would have provided economic loans and grants for a third world country in the hope that alterations could be made in the societal and political structure, possibly allowing for greater democracy and transparency; such actions are not what china focuses on.

A US which repudiates a foreign policy of liberal internationalism is to the interest of China as this allows it to gradually fill the void of an increasing isolationist USA. How China manages this is a matter up for debate but on the whole one cannot discount the fact that thus far through initiatives such as One Belt One Road and the Maritime Silk Road as well as the AIIB; China has gradually garnered a lot of support to its side.

What does an isolationist foreign policy entail for Asia? What of the TPP and Pivot to Asia? Well for one they most probably will go underwater. Both Francisco Magno and Jesse Robredo enunciate that:

“American support for regional cooperation mechanisms, such as the Association of Southeast Asian Nations (Asean) will decline. Defense cooperation with Asean countries, especially with a treaty ally like the Philippines, will weaken as US interest in being engaged in ensuring the peaceful settlement of maritime disputes in the South China Sea becomes less of a priority. This would lead to a scaling down of joint military exercises between the United States and the Philippines.”5

Even though Trump plans and will likely follow Reagans “peace through strength” policy, an expanding US military power will not induce any change in the perceptions of autocratic leaders if they sense that the US is isolationist in nature. It cannot induce any structural change in a foreign government and increasingly has littler power to induce transformation in them. In fact as Joseph Nye argues Soft power and smart power are intensifying in value and effectiveness. In the authors view these are the major components of power; in a world that fears total war to the extent that it does today.

 While some misguided writers predict a conventional war with China under Trump the possibilities are highly unlikely.  However this is not to discount a trade war which is definitely on the cards under Trump.

 “He will instruct his Treasury secretary to label China a currency manipulator, he will bring cases against Beijing to the World Trade Organisation, and he will consider imposing a 45% tariff on Chinese imports into the US to make it easier for American companies to compete. The US is the biggest single market for Chinese exports, accounting for about 20% of the total. There would be a risk that aggressive US trade policy could result in a marked slowdown in China’s growth and a loss of manufacturing jobs.………Beijing is not without economic weapons, since it has amassed a vast stock of US Treasury bonds in recent years, the proceeds of its trade surplus with America. Beijing could meet Trump’s threat with one of its own: to dump US assets. A tit-for-tat trade war, in which China puts tariffs on US exports, could not be ruled out either.”6

Fortune Magazine points out that: “The most immediate trigger of a downward spiral of U.S.-China relations…is almost certain to be a trade war with China. A centerpiece of Trump’s winning campaign strategy is trade protectionism. To gain the support from blue-collar manufacturing workers in the American heartland, Trump has vowed, among other things, to abrogate trade agreements and impose unilateral tariffs. In the case of China, he has floated the idea of slapping tariffs as high as 45% on imports from China.  If Trump carries out his campaign pledge, China’s exports to the U.S., worth $483 billion in 2015, could collapse. Needless to say, American exports to China, estimated at $116 billion as of 2015, will plunge as China retaliates.”7

While Hillary Clinton throughout the presidential debates took to task the economic plan of trump, now that Trump is president elect it is most likely that he would not change his plan no matter what economic guru on the outside of his inner circle pronounces.  However Trump does not have it easy. “Following three years of declines, the deficit rose by $150 billion this fiscal year to nearly $600 billion. This will no doubt complicate President Trump’s efforts.”8

“Yu Yongding, an economist at the Chinese Academy of Social Sciences, in Beijing, suggested to a Times reporter that …..“After he becomes president, there’ll be advisers at his side to explain to him what the exchange rate is, what capital flows are, what macroeconomic policy is.”9

But even then an alteration of his policies to the extent of entirely redefining its structure is not something that trump may accept.

Paula Campbell Roberts, commenting on Trumps economic policies said that “The policies proposed by Trump would theoretically support an increase in high-income consumer spending, but elevated economic policy uncertainty, as well as a possible deportation-linked decline in consumer demand and labor under a Trump presidency would counteract the consumer spending benefit from lower taxes”10

Others have challenged the rhetoric “We will make America great again” by outlining the problems in trumps economic plans. “Donald Trump’s policies would significantly increase the US Budget deficit. The bipartisan Committee for a Responsible Federal Budget (CRFB) last month estimated that the combination of tax cuts and spending increases proposed by Donald Trump would add US$5.3 trillion to US public debt over the next decade, lifting it from 77% to 105% of GDP.”11

The author (although no economist himself) has gone through some of the proposals and doubts whether those if implemented will bring forth a “great” America as outlined in Trumps vision. However that remains to be seen and undoubtedly Trump will push through tough regulations in Congress to ensure that his main election promise – a stronger economy – is fulfilled.

On a political dimension the fact that USA would adopt an isolationist policy is indisputable. On the one hand, this may force states to turn towards regional integration to ensure that  they could guarantee their national security in a context where China does not fill the US void as a global “policeman”. Whether emphasis will be drawn to functional, neo-functional or supra nationalism integration models is unpredictable in the current climate and would invariably differ from region to region. Some are of the view that “Trump’s attitude to longstanding US strategic alliances – with European countries, Japan and Korea – threatens to create much greater political uncertainty around the world. It may even prompt an “arms race” entailing greater proliferation of nuclear weapons.” 12But even then, polices must be implemented and Congress might play a restraining role of an overly ambitious Trump stratagem.

While many believe that USA would follow through in threatening to get out of the military alliances and security alliances if the other states did not pay “its share”; again that would involve multi-lateral discussions and meetings between the respective heads of states which would hopefully curtail any rash decision.  On the other hand, such rhetoric may also generate a desire among states to form regional organizations and/or to bandwagon with China. In fact the actions of both Malaysia and Philippines reflect the latter move.

On the economic dimension stronger isolationism would result in the move to strengthen domestic industries which may have significant economic impacts on foreign economies. As mentioned above, this may result in a trade war with China and the groundwork of a “type of” bi polar division that does not include the “camp/bloc” structures of the cold war between the USA and U.S.S.R.

Also in the economic dimension the underlying forces that brought Trump to power would anticipate rapid changes that would benefit those out of work and underemployed.

 “The US has lost five million manufacturing jobs over the past 15 years, while China has seen rapid growth in its manufacturing sector over the same period. Trump is electorally committed to bringing a material number of lost manufacturing jobs back to the US; the only way he can do so will be to offset Asia’s (especially China’s) labour cost advantage in manufacturing with a combination of tariff and non-tariff barriers.

“There is a growing possibility that China will be at the epicentre of President-elect Trump’s first crisis, triggered by concerns over the potential impact of protectionist measures on China’s trade surplus…. At this point the likelihood of Trump actually delivering on his protectionist rhetoric is secondary to the psychological impact on resident corporate and household savers of any potential threat to the current uneasy equilibrium within the Chinese economy.”13

However, “His protectionism policies, which could hurt global trade and his potential mishandling of the US economy, may in turn disrupt China’s economy, which is already undergoing a difficult period of balancing growth and reforms.” 14

On the defense and security dimension this may result in the strengthening of the military forces of USA, but as mentioned above, this does not entail any major shift in the attitudes of undemocratic autocratic leaders as an isolationist foreign policy would not threaten the political structure of such states. His present attitude towards Syria reflects this matter. It would only re-strengthen the existing fleet of naval vessels and jets but would not result in any substantial gain to the economy or to the society in a context where the biggest threat to USA is from a non-state actor – ISIS.

On the defense and security dimension, China would continue to pursue OBOR and maritime and land Silk Road for its strategic purposes. Moreover China would tend to decrease its concessionary tone regarding much of the investments and loans that are given to states as it does not face any major rivalry to win “hearts and minds” of the people in foreign states. It faces no contender in this sector if USA is to follow isolationism.

Also “Under President Barack Obama’s administration, the U.S. has consistently opposed China’s unilateral claims to sovereignty over much of the South China Sea. If Trump believes that the South China Sea is none of Washington’s business, Beijing will likely further escalate its activities, such as building military facilities and drilling for oil, thus escalating risks of conflict with Vietnam and the Philippines. As more than $5 trillion worth of commerce transits through the South China Sea each other….a military conflict or acceptance of China’s de facto control of the area will gravely undermine American security interests.”15

Outlining trumps post-election focus; two trump camp advisers wrote that:

 “Trump’s approach is two-pronged. First, Trump will never again sacrifice the U.S. economy on the altar of foreign policy by entering into bad trade deals like the North American Free Trade Agreement, allowing China into the World Trade Organization, and passing the proposed TPP. These deals only weaken our manufacturing base and ability to defend ourselves and our allies. Second, Trump will steadfastly pursue a strategy of peace through strength, an axiom of Ronald Reagan that was abandoned under the Obama administration. He knows, however, that this will be a difficult task.”16

Thus this article leaves many questions unanswered but offers a brief insight as to what may happen under an isolationist foreign policy and the strategic, economic and political implications between China and USA if trump was to follow through with his magniloquence.

On the flip side some may argue that nothing really has changed in domestic politics. It simply has been the case that: a “Russia hating American society” has shifted to pick China as the new” biggest threat” to its alleged unipolar hegemonic dominance. However this claim is weakly backed up and offers a myopic perspective of US domestic politics.

Therefore the central argument of this article rests on whether trump follows through with what he said in the campaign trail. To quote Kithmina Hewage : “If anyone says that they know how the Trump presidency will impact their country, they’re lying! He’s been so thin on substantive policy that any impact study lends on conjecture.”17 Much of the arguments detailed in the article is speculation but as the axiom goes “let’s see what happens in the future.”

 

Shakthi De Silva

 

END NOTES

  1. Stewart, Emily. “With Donald Trump as President, Here’s What Will Happen to the U.S. Economy.” TheStreet. November 13, 2016. Accessed November 15, 2016. https://www.thestreet.com/story/13335121/1/if-donald-trump-was-president-here-s-what-would-happen-to-the-u-s-economy.html.
  2. Hattotuwa, Sanjanah. “Trumped.” Sanjanah.wordpress.com. November 13, 2016. Accessed November 14, 2016. https://sanjanah.wordpress.com/2016/11/13/trumped/.
  3. “How Will a Trump Presidency Impact on the Philippines …” November 13, 2016. Accessed November 15, 2016. http://globalnation.inquirer.net/149487/how-will-a-trump-presidency-will-on-the-philippines. in fact Josh Billinson pointed out one such example of a mercurial Trump : https://twitter.com/jbillinson/status/798561203605934080
  4. “How Will a Trump Presidency Impact on the Philippines …” November 13, 2016. Accessed November 15, 2016. http://globalnation.inquirer.net/149487/how-will-a-trump-presidency-will-on-the-philippines.
  5. “How Will a Trump Presidency Impact on the Philippines …” November 13, 2016. Accessed November 15, 2016. http://globalnation.inquirer.net/149487/how-will-a-trump-presidency-will-on-the-philippines.
  6. Elliott, Larry. “How America’s New President Will Affect the Global Economy.” The Guardian. November 09, 2016. Accessed November 16, 2016. https://www.theguardian.com/business/2016/nov/09/donald-trump-new-us-president-america-global-economy-china-mexico.
  7. Pei, Minxin. “A Trade War With China Is Likely Under Donald Trump.” Fortune. November 10, 2016. Accessed November 16, 2016. http://www.intellasia.net/a-trade-war-with-china-is-likely-under-donald-trump-554035.
  8. Doll, Bob. “Bob Doll: 10 Implications of Trump’s Victory.” Barron’s. November 14, 2016. Accessed November 16, 2016. http://www.barrons.com/articles/bob-doll-10-implications-of-trumps-victory-1479152651.
  9. Fan, Jiayang. “China Tries to Make Sense of Donald Trump.” The New Yorker. November 12, 2016. Accessed November 16, 2016. http://www.newyorker.com/news/daily-comment/china-tries-to-make-sense-of-donald-trump.
  10. Peterson, Hayley. “Trump Presidency Could Have Terrifying Implications for Restaurants and Retailers.” Business Insider. November 09, 2016. Accessed November 16, 2016. http://www.businessinsider.com/risks-to-retailers-and-restaurants-under-trump-presidency-2016-11.
  11. Eslake, Saul. “How Will The Trump Presidency Impact The Economy?” LifeHacker. November 9, 2016. Accessed November 16, 2016. http://www.lifehacker.com.au/2016/11/how-will-the-trump-presidency-impact-the-economy/.
  12. Eslake, Saul. “How Will The Trump Presidency Impact The Economy?” LifeHacker. November 9, 2016. Accessed November 16, 2016. http://www.lifehacker.com.au/2016/11/how-will-the-trump-presidency-impact-the-economy/.
  13. ECONOMICTIMES. “President Trump Is Good for India and Bad for China, Pakistan. Here’s Why.” The Economic Times. November 9, 2016. Accessed November 16, 2016. http://economictimes.indiatimes.com/news/international/world-news/president-trump-is-good-for-india-and-bad-for-china-pakistan-heres-why/articleshow/55329942.cms.
  14. Beng, Kor Kiang. “US Elections: Donald Trump’s Thinking on the US’ Asia-Pacific Pivot Trumps China’s Concerns over His Presidency.” Straitstimes. November 9, 2016. Accessed November 16, 2016. http://www.straitstimes.com/asia/east-asia/trump-in-the-white-house-beijing-will-want-to-know-his-stance-on-rebalance-towards.
  15. Pei, Minxin. “A Trade War With China Is Likely Under Donald Trump.” Fortune. November 10, 2016. Accessed November 16, 2016. http://www.intellasia.net/a-trade-war-with-china-is-likely-under-donald-trump-554035.
  16. Grey, Alexander, and Peter Navarro. “Donald Trump’s Peace Through Strength Vision for the Asia-Pacific.” Foreign Policy Donald Trumps Peace Through Strength Vision for the AsiaPacific Comments. November 7, 2016. Accessed November 16, 2016. http://foreignpolicy.com/2016/11/07/donald-trumps-peace-through-strength-vision-for-the-asia-pacific/.
  17. Hewage, Kithmina. “Well – We Got Trumped!” Linkedin. November 10, 2016. Accessed November 16, 2016. https://www.linkedin.com/pulse/well-we-got-trumped-kithmina-hewage?articleId=6202319232663945216#comments-6202319232663945216&trk=prof-post.

Image courtesy : CNN

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