Petrostrategies, a Paris-based consulting firm analyses the risks that emanate from the “exceptional political virginity” of US President Donald Trump’s domestic, foreign and economic policies and the “deliberate chaos” he has created in Washington in the hopes of exercising “maximum control” over his team. (The article is from the January 30 issue of the World Energy Weekly).
What you should know on the dawn of the new US presidential era.
The man, his method, his team
The most powerful man on Earth, Donald Trump, the 45th President of the US, took up office on January 20, 2017, without any previous electoral mandate and with no prior domestic or foreign political experience. Although this exceptional political virginity could turn out to be an advantage, since Trump could bring a fresh approach to the questions he will have to tackle, it could also do him a disservice on the practical side of matters: he is going to have to make endless decisions on a wide range of subjects, many of which will be totally new for him. He can act either by delegating his advisors and ministers more than is customary for a US President, or by spending a huge amount of time studying each case. He does not seem to have ever followed the second path in his entire career. As for the first approach, it could spiral beyond his control.
This question of governance could cause him a great number of problems, as contradictions stand between the members of the team that he has put in place, as well as with Trump himself. Furthermore, many of them admit that they have not sat down with Trump to define clear paths for the policies that they will have to carry out in their respective fields of competence. In such a situation, the President’s close circles will be called on to play a very big role. However, none of his main advisors, not even the Chief of Staff of the White House, has any governmental experience.
Trump’s entourage is not bothered about concealing this state of affairs. Quite the contrary, they say that this is the method of government he wanted. The new occupant of the White House has reportedly set up a “deliberate chaos” so that the best ideas are hatched from the different “personal points of view”, with the chief of the executive deciding who is right and who is wrong. This method brought him much success in business. It should enable him to exercise “maximum control” over his team. Maybe, but mayhem may be on the cards.
Donald Trump is not used to having to account for his actions. The man appears to be intuitive and impulsive, while relying a lot on his capacities to wriggle his way out of complicated situations and strike “deals”. He defines himself as a “deal maker”. He is described as an “authoritative” man, who nurses an “ego the size of the world”. The former chief of the CIA, John Brennan, who bears a particular grudge against Trump, criticized his “despicable display of self-agrandissement”. The pro-Republican and ultra-conservative Wall Street Journal, observes with regret that while “subtlety is not the Trump style, “it would have at least been good to hear him offer some humility about the limits of government”. It is true that US Presidents enjoy great powers, but they must act within the framework of the Constitution and take account of Congress. The Republican majority that reigns in the two houses are not his greatest admirers, and Trump is unpopular across the country. He is obsessed by the fact that Hillary Clinton won 2.7 million more popular votes than he did; he claims that 3 to 5 million illegal immigrants voted for his opponent. On the day of his inauguration, 673 demonstrations were held against him by some 2 million people across the globe, including 1 million in the US.
Donald Trump is a free spirit. He owes absolutely nothing to the Republican Party, even if he did wear its colors during the election. On the contrary, he was elected in a movement opposing the political establishment (against “Washington”), including the establishment incarnated by the Republicans. The latter have been keeping a low profile since the shock of Trump’s presidential election success, but they will bare their fangs if they feel threatened by a President who makes excessive use of his executive powers, or whose unpopularity could turn against them. Steve Bannon, a far-right activist promoted to the position of White House Chief Strategist, is said to be all for triggering an implosion of the Republican Party. Confrontations between Trump and Congress cannot be ruled out.
Some experts claim that Trump won the election thanks in particular to his talents as a “salesman”. He has a lot of experience in this field: he has spent half a century selling the Trump brand. He is said to have calibrated his campaign themes on the strength of their popularity, without any ideological prejudice. Maybe, but through his one up manship and reckless promises, he has raised very high expectations, which he must now strive to meet. Through the excessive language he employs—he described the state of his country’s economy as “this American carnage”, despite unemployment figures being at their lowest: 4.7%— he stirred the people’s wrath, which hoisted him to power, but this very same wrath could one day turn against him, like a new Frankenstein.
Economic nationalism
Donald Trump promises to take the path of economic nationalism. In truth, his predecessors made no bones about implementing unilateral measures. Trump apparently believes that they did not do enough to defend the interests of US citizens, in particular the “forgotten men and women” who, he pledges, “will be forgotten no longer”. Trump is determined to return to Americans the jobs he says were “destroyed” by other countries, first and foremost China and Mexico. He wants to do away with “poverty”, re-open rusted-out factories “scattered like tombstones across the landscape”, and modernize infrastructure that has fallen into disrepair and decay. In order to achieve this, he has pledged to “follow two simple rules: buy American and hire American”. He is convinced that “protection will lead to great prosperity and strength”.
The current global economic system, globalization, was created with the US as its standard-bearer. Donald Trump wants to implement another system, in which each country will above all have the right to defend its own interests, starting with America. “America first”, was the message that he drove home during his election campaign and his inauguration speech, in which he even added a word that was not in the original text: “Only America first”. So be it, but the overriding question is just how far will he go? Many believe that he will use the threat of customs duties (like he did against Ford and GM before his inauguration) in order to clinch concessions from one case to the next, but that he will not go as far as to embrace protectionism. If he tried to do so, he would stumble up against opposition not only from many countries across the world, but also from the Republican Party, which is very attached to the concept of free trade, and many US companies, which are woven into the fabric of international trade and industrial relations. But trade wars have one thing in common with conventional wars: they can get seriously out of hand, despite the widespread belief that they can be controlled, and one never knows when they are going to end. The risk is great, because if trade barriers are put up, other than the loss of growth—do we have to go back 200 years in time and relearn David Ricardo’s theory of “comparative advantage”?—inflation is expected to make its inevitable return, including in the US. The purchasing power of the US middle classes would thus be eroded. Donald Trump has promised to defend this middle class, whose “wealth has been ripped from their homes and then redistributed all across the world”, he said. It was this same middle class that hoisted him into power, and it is also upon this middle class that he will rely on in dealing with the Republican Party. According to Peterson Institute, a trade war would cost 4.8 million jobs in the US.
If, in spite of everything, protectionism should rear its head, alarming political and economic upheavals—reminiscent of those of the 1930s, which saw the rise of various kinds of extremism and the breakout of devastating conflicts—would threaten humanity. It is this perspective that instills the most fear with European leaders. It was precisely in order to avoid repeating these horrors that the Europeans decided to build their Union. This has now been seriously undermined by Brexit and the thinly veiled desire of Trump and his advisors to see the European experiment kicked into touch, once again by economic nationalism.
Foreign policy
Donald Trump’s foreign policy seems to magnify the selective disengagement from the international circuit that Barack Obama embarked on. “We do not seek to impose our way of life on anyone, but rather to let it shine as an example”, he said. At the same time, he stated that “every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families”. Trump has already signed an executive order that withdraws the US from the TransPacific Partnership (TPP)—despite this being considered as a bulwark against China—and announced that NAFTA, which was created with Canada and Mexico in 2004, would be renegotiated. Mexico is targeted in this case: it is accused of inundating the US with clandestine immigrants and destroying jobs with industrial dumping. Canada, on the other hand, has a “very special status” and will not be touched.
If the double political/military and economic disengagement policy is put into action, it will come as a blessing to Russia, which has already begun to fill in the vacuum left by the US in the Middle East. But Moscow’s means are limited, due to its weak economy. As for China, one the one hand, it is afraid of losing US markets, but on the other, it is considering taking up the free-trade torch, should the US choose to let go of it. On January 17 in Davos, President Xi Jinping said his country was prepared to play a more prominent role in the global economy, since “trade protectionism is locking oneself in a dark room”. On January 20, Donald Trump confirmed his protectionist tendencies. On January 23, a top Chinese Foreign Affairs official told journalists: “If it’s necessary for China to play the role of leader, then China must take on this responsibility”, where free trade is concerned.
Trump is going to seek an understanding with Russia. Rex Tillerson is a “deal maker”, just like him. And like him, he has no ideological prejudices. Victoria Nuland, the Assistant Secretary of State for European and Eurasian Affairs, and the “bête noire” of the Russians, has been replaced by John Heffern, the former US Ambassador to the Republic of Armenia. In short, Trump will lead a nation-state rather than a big power defending its spheres of influence. The only exceptions will see stronger support for Israel and the promise to “eradicate radical Islamic terrorism completely from the face of the earth”. With Donald Trump, the world seems to be on the verge of heading towards an era of confrontation.
