Tag Archive for: Donald Trump

Present at the destruction

At the 73rd session of the United Nations General Assembly last month, there was a widespread sense of foreboding among world leaders. The anxiety went beyond standard concerns about what US President Donald Trump would say, do or tweet. Even before the summit began, Europeans, Canadians, Mexicans, South Koreans and Japanese had been consulting in earnest about the need for a new alliance to save the multilateral system.

In the late 1960s, former US secretary of state Dean Acheson looked back at the immediate post-war era and felt as though he had been ‘present at the creation’ of a new world based on shared rules and multilateral institutions. But at the UNGA this year, many attendees felt as though they were present at the destruction of that world.

There are a number of reasons for this. But many of them are linked to Trump, whose attacks on the Paris climate accord, the Iran nuclear deal, NAFTA, NATO, the World Trade Organization and the UN Human Rights Council have made it clear that he regards the international system as an unnecessary constraint on his administration.

To Trump’s mind, multilateral institutions tend to strengthen the hand of weaker powers vis-à-vis the US and are thus facilitating China’s bid for global dominance. Hence, his solution is to destroy the global order and then negotiate with other countries on a bilateral basis. That way, the US will always have the upper hand, enabling it to change the rules in its favour.

But Trump is far from the only threat to the multilateral order. Chinese President Xi Jinping has sought to portray himself as a saviour of the international system and yet his goal is not to defend the institutions on which global governance depends, but rather to bolster China’s power. By deprioritising human rights, Xi will be freer to pursue ambitious projects such as the Belt and Road Initiative, the aim of which is to enhance China’s influence throughout Eurasia and the Asia–Pacific region.

Moreover, Trump and Xi are just two among a larger group of alpha leaders who are challenging the traditional Kantian international order. Other aspiring strongmen include Presidents Vladimir Putin of Russia and Recep Tayyip Erdoğan of Turkey, Prime Ministers Narendra Modi of India and Benjamin Netanyahu of Israel, and Saudi Crown Prince Mohammad Bin Salman. The rise of such leaders makes upholding the rules-based order increasingly difficult.

The task ahead for the remaining multilateralists is to avoid becoming guardians of a status quo that is already dead. That will require carefully identifying the weak spots of the existing order and forging coalitions of the willing to address them. On trade, for example, multilateralists will need to work with China to defend the WTO; but they also need to reform the WTO so that it is equipped to curtail China’s problematic trade and investment practices.

The trickiest part of this strategy will involve knitting together a critical mass of countries that can uphold liberal values even when great powers will not. This will be essential as the world moves away from the vision of multilateralism that prevailed at the turn of the century.

When I was in Beijing a few weeks ago, Chinese strategists were debating whether the new order will be multipolar or bipolar. Most agreed that it will center on a bipolar confrontation between the US and China; but they doubted that it will resemble the Cold War and interwar periods. Instead, many expect a return to the geopolitics of the pre-World War I era.

In my view, the new world disorder will have four key features. First, ‘connectivity wars’ will be commonplace. The ties that bind countries together will not be severed, but nor will they create the conditions for true multilateralism. Instead, the major powers will weaponise their interconnections, giving rise to more trade wars, cyberattacks, sanctions regimes and electoral interference.

Second, non-alignment will become the default foreign policy. While the Cold War pitted the Western alliance against the Soviet bloc, the new bipolar world will allow for much more promiscuity. Rather than pledging allegiance to China or the US, most countries will keep their options open, working with the Chinese on some issues and with the Americans on others.

Third, strongmen will continue to reign. As geopolitical competition heats up, voters will turn to tough leaders whom they trust to uphold narrow national interests. But this lurch toward centralised decision-making will produce inconsistent and radical policies, along with perpetual cheating. Without an empowered multilateral system to police abuses, countries governed by strongmen will increasingly break their promises, lie and peddle conspiracy theories—Trump’s modus operandi.

Lastly, foreign policy will become more domestically oriented. Rather than trying to influence other countries or lead on the world stage, political leaders will focus on consolidating their base at home.

When confronting this kind of disorder, committed multilateralists will have to stay focused on defending the most critical aspects of the international system. That means they should be willing to play hardball against the alpha leaders. With their respective responses to Trump’s trade bluster, the European Union, Canada and Japan have shown that this is possible. But now they must go further, by developing a comprehensive approach to defending global rules in an age of national misrule.

Pondering Trump: alarm versus pragmatism

The Australian government’s approach to the US under President Donald Trump is deeply pragmatic: hold tight to what we’ve got, get what we can, and don’t anger Trump.

Loudly love the alliance. And if you can’t say anything nice about Trump, say nothing. So far, it’s working.

The Australia–US relationship since Trump’s inauguration has been defined by what the president has NOT done to Australia. He hasn’t questioned the alliance. He hasn’t hit Australia with trade tirades and tariffs. He hasn’t broken the refugee deal he so denounced when first taking office. And he hasn’t even sent an ambassador to Australia.

The pragmatic view is that Australia has stayed out of trouble with Trump and has done well with a transactional president. The pessimistic argument is that Trump is tearing up the international system and Australia must rethink and reposition.

In public, the Liberals proclaim the pragmatic view. And, of course, being in government enforces that discipline. Being out of office, Labor grandees are freer to sound the alarm. But even the Libs are musing about the alliance effects if Trump brings the legions home.

Purest pragmatism is dispensed by Alexander Downer, our longest serving foreign minister (1996–2007), who has just completed five years as high commissioner to the United Kingdom.

Downer says Trump has been better for Australia than Barack Obama. Obama ‘made America look weak’, Downer writes, and ‘under Obama, America pulled back from the world’.

Trump may be bombastic, crude and crass, Downer observes, but so what? The Downer judgement:

In Asia, Trump has built a half-decent personal relationship with Xi Jinping. That has helped with his attempts to get North Korea to scrap its program to build nuclear-armed intercontinental missiles that could hit American cities. The talks have happened; let’s see if that strategy has worked. It’s too early to say. Trump certainly hasn’t persuaded the Chinese to desist from militarising reefs in the South China Sea. But his aggressive commitment to American military power—including a huge increase in defence spending—has probably made the Chinese realise it would be dangerous to go much further in the South China Sea. All that’s good for us.

Downer says Australia’s experience of Trump has been mostly positive:

So the Trump presidency is going quite well for Australia. Not perfectly, mind you. Pity he pulled out of the Trans-Pacific Partnership. That was a bad mistake. But pulling out of the Paris Agreement will have a marginal effect. And he did exempt us from the steel and aluminium tariffs.

The former Labor foreign minister Gareth Evans (1988–1996) says the US under Trump is a rogue superpower, ‘tearing up the order it did so much to create’. Evans says the ‘irremediable damage’ being done by Trump means Australia must think hard about future responses. He offers four policy shifts:

  • Less America: Continued US engagement in the region is certainly highly desirable, Evans says, and Australia shouldn’t walk away from the alliance. ‘But less reflexive support for everything the US chooses to do is long overdue.’
  • More self-reliance: Australia should be more of a diplomatic free agent, Evans says, abandoning the constant urge to look over our shoulder to Washington.
  • More Asia: Strengthen relationships at all levels with key neighbours like India, Indonesia, Vietnam, Japan and South Korea, as a collective counterweight to a potentially overreaching China. At the same time, Evans says, Australia should ‘develop a more multidimensional relationship, not just a one-dimensional economic one, with China itself’.
  • More global engagement: Evan says Australia should be a relentless campaigner for continued global cooperation. ‘There are many global public goods issues on which we could make a positive difference, using our own strengths as a capable, credible middle power and the strategies of international coalition building that are the essence of effective middle power diplomacy.’

Former prime minister Tony Abbott observed to the Heritage Foundation in Washington that Trump is ‘the most unconventional president ever’, but is well on the way ‘to being a consequential president’—even if ‘erratic and ill-disciplined’.

In the Abbott view, Trump’s trump card is that ‘the rest of the world needs America much more than America needs us’.

The world will confront that need as the US brings its military home, as Abbott stated: ‘A new age is coming. The legions are going home. American values can be relied upon but American help less so. This need not presage a darker time, like Rome’s withdrawal from Britain, but more will be required of the world’s other free countries.’

Dealing with a deal-making president, Abbott said, Australia could not rely on tradition or sentiment. But in Abbott’s view, Australia is getting a good deal:

For Australia, Trump has so far been a good president. Despite a testy initial conversation with Prime Minister Turnbull, he’s honoured the ‘very bad deal’ that his predecessor had done to take boat people from Nauru and Manus Island and to settle them in the United States.

He seems to appreciate that Australia is the only ally who’s been side-by-side with America in every conflict since the Great War, and has exempted our steel and aluminium from the tariffs slapped on many others.

As a country that’s ‘paid its dues’ on the American alliance, we have been treated with courtesy and respect but that’s no grounds for complacency in dealing with a transactional president.

Even before Trump launched his trade battle with China, the former Labor prime minister Kevin Rudd observed in December that an ‘America First’ administration could find itself being put last in Asia.

Rudd said Trump’s withdrawal from the Trans-Pacific Partnership was symbolic of a US becoming less relevant to Asia’s economic future:

In fact, the US is increasingly emerging as an incomplete superpower. It remains a formidable military actor, with unique power-projection capabilities that extend far beyond its aircraft carrier battle groups to include an array of other capabilities that are as yet unmatched by other countries in the Asia–Pacific region. But its relevance to the region’s future—in terms of employment, trade and investment growth, as well as sustainable development—is declining fast.

Some in Washington DC seem to think that the US can sustain this pattern for decades to come. But many of us are skeptical. Unless and until the US chooses comprehensive economic re-engagement with the region, its significance to the overall future of Asia, the world’s most economically dynamic region, will continue to fade.

The idea of the US fading away will be encouraged by Trump’s decision to skip the East Asia Summit in Singapore and the APEC summit in Papua New Guinea.

If Trump had got to PNG, the expectation was that he’d also come next door to make a presidential visit to Australia. That chance of an Australian stop has now disappeared. So one other thing Donald Trump won’t have done to Australia in 2018 is visit the country.

Letter from America: Trump’s voice

Donald Trump’s language is limited, much like his store of ideas. The US president is a demagogue who rouses without rhetoric.

A bemusing bit of Trumpworld is the small range of his rant—intense rather than deep. Much emotion, little intellect.

Last week’s column gloried in the variety of American speech. So, this time, I’ll come at Trump via the way he puts together his verbs and nouns, his notions and nostrums.

Trump’s language is boiled-down Hemingway. That’s an insult to Hemingway, but …

Behold the power Trump punches from the lip. A Trump rally speech-cum-monologue is an extended riff on his tweets—the Twitter feed rendered as conversational opera.

The president hasn’t much use for facts, because in Trumpworld a Trump word equates to a fact. His ‘voice’ in all forms is consistent. Short sentences and simple words offer his imaginings. The Donald is central. There’s always an enemy. The pushback is always emotional. And everything is big, oh so big—claims and aims become achievements as they leave those lips.

The privileged tycoon has captured his people by speaking in the most common manner. Admit the political impact of Trump speech, even if the meaning can dismay.

The trade war on China and Europe and the imbroglio with Canada show the strengths and weaknesses of the way Trump uses language. He’s having a hard time explaining the war he’s chosen, other than the usual boasting bravado. The president’s voice is all about assertion, not explanation or persuasion.

Trump started the tariff combat because, he says, the US is getting ‘a lousy deal’ and the rest of the world ‘is killing us’. Politics involves simplifying what’s complicated, and this is simple us-against-them-till-we-win stuff.

The trade war’s price effects on American life are hovering on the horizon, and it’s starting to enter conversations. Last year, Trump supporters were happy to conclude that ‘He knows what he’s doing.’ When similar chats touched the trade war this year, the equivocal thought is the hope that he knows what he’s doing.

Here’s hoping that in declaring war, Trump is after great deals; to game the system, not destroy the system. Hope that in playing trade poker he’s prepared to take a lot of money off the table and let the game go on. And worry that Trump’s zero-sum mentality may wreck a complex system. The president’s refusal to endorse judges for the World Trade Organization—disabling the dispute-settlement mechanism—strikes at the global rules and their operation.

Nihilistic vandalism is strange trade policy, although it might be good politics.

In a letter from America last October, I argued that the surging US economy and Trump’s ability to inspire his base meant he’d win a second term as president. Those factors still apply.

America is humming. The official jobless rate is down to 4%, second-quarter growth hit 4%, and the re-build from the great recession has delivered the longest bull run in market history. Parts of America that voted for Trump feel confident and are growing. Trump mightn’t be responsible for much of this, but whatever happens on a leader’s watch belongs to the leader. He’ll claim all the credit—a core Trump consistency is that it’s always all about The Donald.

However, the Trump effect is so extreme it’s clouding the usual equation for a second term. That equation reads: strong economy plus sitting president with strong party support equals re-election.

Unusual elements could unbalance the equation. Trump is a revolutionary (or just revolting). He’s made a hostile takeover of the Republican Party. Trump crashes and trashes his own party the way he crunches everything.

A year ago, it was possible to argue that Trump would deliver standard conservative policies; he wouldn’t be as bad as his language. Responsible adults would see that Trump settled down to become a conventional Republican president. Sorry, people, not happening. Or, in New Yorkese, fuhgeddaboudit! Trump is doing what he said he’d do. With gusto.

Trump is changing the Republicans, but the party has little hold on him. That’s as scary for the party as it is for everybody else.

Australia hopes that Defense Secretary James Mattis can hang on, but the idea of ‘responsible adults’ standing between Trump and whatever he wants is very last year. Trump is ripping pages out of the rulebook. How American presidents behave. How they talk to America. How they get re-elected.

Trump isn’t interested in uniting America, pitching for the centre where the traditional majority is found. As Jonah Goldberg observes: ‘Donald Trump is the first president in living memory who seems utterly contemptuous of even appearing to care about voters outside of his base in a sustained way. He often refers to “my people” as if he is president of his fan base and no one else.’

Trump doesn’t want to broaden his base, just harden it. The base will re-elect him as president, unless he so enrages a lot of other bases that they unite to overthrow him.

The fascination of America’s November mid-term elections will be the extent to which Trump’s voice energises an anti-Trump coalition to shout back at him. November’s vote is a test run of whether other American voices can combine to be louder than Trump’s.

That answering voice would sound like John McCain’s farewell statement:

We weaken our greatness when we confuse our patriotism with rivalries that have sown resentment and hatred and violence in all the corners of the globe. We weaken it when we hide behind walls rather than tear them down, when we doubt the power of our ideals rather than trust them to be the great force for change they have always been.

Trump’s grand strategy

US President Donald Trump’s inability to think strategically is undermining longstanding relationships, upending the global order, and accelerating the decline of his country’s global influence—or so the increasingly popular wisdom goes. But this assessment is not nearly as obvious as its proponents—especially political adversaries and critics in the mainstream US media—claim.

America’s relative decline was a hot topic long before Trump took office. The process began when the United States, emboldened by its emergence from the Cold War as the world’s sole superpower, started to overextend itself significantly by enlarging its military footprint and ramping up its global economic and security commitments.

America’s ‘imperial overreach’ was first identified during President Ronald Reagan’s administration, which oversaw a frenetic expansion of military spending. It reached crisis levels with the 2003 US-led invasion and subsequent occupation of Iraq under President George W. Bush—a watershed moment that caused irreparable damage to America’s international standing.

On President Barack Obama’s watch, China rapidly expanded its global influence, including by forcibly changing the status quo in the South China Sea (without incurring any international costs). By that point, it was unmistakable: the era of US hegemony was over.

It is not just that Trump cannot be blamed for America’s relative decline; he may actually be set to arrest it. As unpredictable as Trump can be, several of his key foreign policy moves suggest that his administration is pursuing a grand strategy aimed at reviving America’s global power.

For starters, the Trump administration seems eager to roll back America’s imperial overreach, including by avoiding intervention in faraway wars and demanding that allies pay their fair share for defence. The fact is that many NATO members do not fulfill their spending commitments, effectively leaving American taxpayers to subsidise their security.

These are not new ideas. Before Trump even decided to run for office, pundits were arguing that the US needed to pursue a policy of retrenchment, drastically reducing its international commitments and transferring more of its defence burden onto its allies. But it was not until Trump, who views running a country much like running a business, that the US had a leader who was willing to pursue that path, even if it undermined the values that have long underpinned US foreign policy.

Trump’s focus on containing China—which FBI Director Christopher Wray recently labelled a far bigger challenge than Russia, even in the area of espionage—fits nicely into this strategy. Successive US presidents, from Richard Nixon to Obama, aided China’s economic rise. Trump, however, regards China not as America’s economic partner, but as ‘a foe economically’ and even, as the official mouthpiece China Daily recently put it, America’s ‘main strategic rival’.

In general, Trump’s tariffs aim to put the US back in control of its economic relationships by constraining its ballooning trade deficits, with both friends and foes, and bringing economic activity (and the accompanying jobs) back home. But it is no secret that, above all, Trump’s tariffs target China—a country that has long defied international trade rules and engaged in predatory practices.

Meanwhile, Trump is also working to ensure that China does not catch up with the US technologically. In particular, his administration seeks to thwart China’s ‘Made in China 2025’ program, the blueprint unveiled by the Chinese government in 2015 for securing global dominance over 10 strategic high-tech industries, from robotics to alternative-energy vehicles.

Trump’s diplomatic activities seem intended to advance this larger strategic vision of reversing America’s relative decline. He has tried to sweet-talk autocratic leaders, from North Korea’s Kim Jong-un to Russia’s Vladimir Putin, into making concessions—an approach that has garnered its share of criticism. But Trump’s compliments have not translated into kowtowing.

For example, despite all the controversy over Russia’s interference in the 2016 presidential election, the fact is that, since Trump took office, the US has expelled Russian diplomats, closed a Russian consulate, and imposed three rounds of sanctions on the country. His administration is now threatening to apply extraterritorial sanctions to stop other countries from making ‘significant’ defence deals with Russia, a leading arms exporter.

Trump has not flattered any foreign leader more than Chinese President Xi Jinping, whom he called ‘terrific and ‘a great gentleman. Yet, again, when Xi refused to yield to Trump’s demands, the US president did not hesitate to hit back ‘using Chinese tactics’, including suddenly changing negotiating positions and unpredictably escalating trade tensions.

Even Trump’s direct approach with North Korea undermines China’s position by bypassing it. Trump is right that transforming the US – North Korea relationship matters more than securing complete denuclearisation. If he can co-opt North Korea, China’s only formal military ally, northeast Asian geopolitics will be reshaped and China’s lonely rise will be more apparent than ever.

There are plenty of problems with Trump’s methods. His brassy, theatrical and unpredictable negotiating style, together with his China-like disregard for international norms, are destabilising international relations. Domestic troubles like political polarisation and legislative gridlock—both of which Trump has actively exacerbated—also weaken America’s hand internationally.

But there is no denying that Trump’s muscular ‘America First’ approach—which includes one of the most significant military buildups since World War II—reflects a strategic vision that is focused squarely on ensuring that the US remains more powerful than any rival in the foreseeable future.

Perhaps more important, the transactional approach to international relations on which Trump’s strategy relies is likely to persist long after he leaves office. Friends and foes alike must get used to a more self-seeking America doing everything in its power, no matter the cost, to forestall its precipitous decline.

Doxing democracy: lessons from election interference in the US and France

Monday’s meeting between Donald Trump and Vladimir Putin in Helsinki caps a big few days on the topic of cyber election interference. On Friday, special counsel Robert Mueller—tasked with investigating Russian interference in the 2016 US election—indicted 12 Russian intelligence officers over the hacking of the Democratic National Committee and the Hillary Clinton campaign. The indictment, remarkable for publicly revealing the extent to which US intelligence services themselves have compromised Russian networks, is further confirmation of the US intelligence community’s unanimous view on the certainty of the Kremlin’s interference.

Trump doesn’t agree, expressing support for Putin’s denial of Russian involvement. With the 2018 US midterm elections approaching, the ‘warning lights are blinking red again’, and the world is watching to see how, or even whether, Washington will be willing and able to counter such activities. Tech companies are making significant preparations—even if they don’t always agree on what to do. But the White House has shown little urgency in taking concrete steps to protect the electoral process or even assist with private sector initiatives towards that end.

The 2016 US presidential election was a remarkable event in the history of US national security, in terms of the brazen nature of Russia’s interference (not to mention unresolved questions about the Trump campaign’s involvement) and the unprecedented nature and scale of the cyber tools deployed. Yes, foreign ‘influence operations’ are a long-established stratagem of intelligence services, but the brazen leveraging of cyberspace—and social media in particular—to influence voter behaviour took most by surprise.

Our recent article in the journal Contemporary Politics develops an analytical framework for thinking about how cyber interference affects voting behaviour. We ask how cyber tools can shape individual decisions, by making someone more or less likely to vote for a particular candidate, vote at all, or engage with political processes in other ways. We examine three cyber tools in particular.

Doxing is where confidential information is obtained and then released publicly, as detailed in Friday’s indictment. Another example was when the email account of Clinton’s campaign chair John Podesta was hacked and his emails subsequently published on WikiLeaks. The online avatar Guccifer 2.0, now revealed to be a creation of Russian intelligence, played a prominent role in disseminating the stolen information.

Fake news, now a familiar (though often misused) term, is false or misleading content usually spread via social media and fashioned to appear credible or authentic. For example, a US Justice Department indictment alleges that during the 2016 campaign, Russian operatives promoted (false) allegations of voter fraud by the Democratic Party, echoing Trump’s own message that the system was rigged.

Finally, trolling is the act of posting provocative and/or lurid content online to elicit emotional responses and widen existing social or political cleavages. Trolling behaviour isn’t just comments authored by automated bots or hired ‘troll farms’; it can also include paid advertisements on divisive social and political issues such as race, religion and gun control.

These tools were deployed with sophistication during the 2016 campaign. The hacked Podesta emails were published within minutes of the infamous Trump Access Hollywood tape emerging, distracting from that scandal. Paid advertisements targeted highly specific demographics such as Beyoncé fans or secessionist Texans. Facebook’s general counsel described Russia-linked advertisements as ‘an insidious attempt to drive people apart’. Our research unpacks how these activities might have affected the political behaviour of American voters and potentially swung a historically close election.

It’s impossible to know for sure whether Russia’s efforts were decisive, though James Clapper, the former director of national intelligence, believes they were. But there’s enough evidence to understand how these tools operated and identify local conditions that may have exacerbated or blunted their impact.

In particular, it’s instructive to compare the 2016 US election with the 2017 French presidential election, which saw similar tactics deployed. Emails from the campaign of frontrunner (and eventual winner) Emmanuel Macron were leaked just before the final-round vote, fake news stories included a report that the Macron campaign was being funded by Saudi Arabia and supported by al-Qaeda, and a coordinated effort including trolling activity was directed towards supporting Russia’s preferred candidate, far-right nationalist Marine Le Pen.

Analysing and comparing the two elections suggests that local factors matter in shaping the effectiveness of cyber voter interference.

First, an election season spanning months in the US (compared to a narrow five-week window in France, including a media blackout just prior to voting) gave ample time for hackers to infiltrate political campaigns. It also allowed the fatiguing psychological impacts of fake news and trolling to accumulate.

Second, the incumbent French government, the Macron campaign and tech companies each took more initiative in conducting cyber defence—for example, taking decisive and public action in the wake of the Macron email leaks to caution the public and remind the media of their duty to protect the integrity of the vote. The Obama administration, in contrast, was inhibited by both confusion about the nature of the attack and partisan resistance from Republicans.

Third, the mainstream media environment in the US was far more sensationalist, overwhelmingly negative in tone and light on policy. In addition to the profit motive of covering Trump himself, news outlets were vulnerable to manipulation by being fed stolen information and focusing on scandal—such as the content of stolen emails—rather than the implications of the theft itself.

As Thomas Rid observes, cyber voter interference seeks ‘to drive wedges into pre-existing cracks’, not create new ones. Highly polarised or divided democracies may be more vulnerable due to their tribal nature, but our comparison of the US and French elections suggests that effectiveness of cyber tools also depends on how the sources and integrity of information entering into the public discourse are regulated.

Trust in the underlying integrity of public discourse is vital for the functioning of a liberal democracy. The policy challenge is to regulate but not suffocate flows of information, promoting transparency and civility while leaving space for a diversity of opinions and perspectives. These issues are just as complex closer to home—Australia’s new Electoral Integrity Task Force has much on its plate.

How to avoid a trade war

Defying common sense as well as business and financial elites, US President Donald Trump seems to relish the prospect of a trade war. On 6 July, his latest trade restrictions—25% tariffs on about US$34 billion of Chinese imports—took effect. They were promptly met by retaliatory tariffs on an equivalent volume of US exports to the Chinese market. Trump has threatened further measures against China, as well as tariffs on automobile imports from Europe. And it remains possible that he will withdraw the United States from the North American Free Trade Agreement if Mexico and Canada do not agree to amend it to his liking.

Trump’s kneejerk protectionism does little to help the working class that helped elect him. Disaffected congressional Republicans and unhappy corporations that have supported him on other matters may yet rein him in. But those who, like me, thought Trump’s bark would be worse than his bite on trade are having second thoughts about where all of this might lead.

But before we get too carried away with doomsday scenarios on trade, we need to consider other countries’ incentives as well. Trump may well want a trade war, but he cannot have it on his own. A trade war requires other economies to retaliate and escalate. And there are compelling reasons why they should not do so.

In the usual scenario, trade retaliation occurs because countries have economic reasons to depart from low tariffs. The canonical historical experience unfolded during the early 1930s, when countries were caught in the Great Depression with high unemployment and inadequate policy remedies. Counter-cyclical fiscal policy was not yet in vogue—John Maynard Keynes’ General theory was published only in 1936—while the Gold Standard rendered monetary policy worse than useless.

Under the circumstances, trade protectionism made some sense for each country on its own, as it shifted demand away from foreign goods and thus helped support domestic employment. (Of course, for all countries taken together, protectionism spelled disaster; one country’s expenditure shift was more than offset by others’ own shifts.)

Economists also consider another scenario that focuses on the so-called terms-of-trade effects of tariffs. By restricting trade volumes, a large country or region can manipulate the prices at which it competes in world markets to its advantage. An import tariff, in particular, would tend to depress the world prices of imported commodities, while raising their tariff-inclusive prices—with the home treasury reaping the difference in tariff revenues.

Neither scenario makes much sense today. Europe and China are not particularly interested in depressing world prices of their imports or in the resulting revenue. Employment considerations are not a major issue, either. While some countries in the eurozone suffer from high levels of unemployment, there is nothing that protectionism can do for these countries that expansionary fiscal or monetary policy (the latter by the European Central Bank) cannot do better.

If Europe, China and other trade partners were to retaliate in response to Trump’s tariffs they would simply reduce their own gains from trade without reaping any of the advantages of protectionism. And they would be doing Trump a favour by lending surface plausibility to his complaints about the ‘unfairness’ of other countries’ trade policies vis-à-vis the US. For the rest of the world, raising trade barriers would be a case of cutting off one’s nose to spite one’s face.

Besides, if Europe and China want to uphold a rules-based multilateral trade regime, as they say they do, they cannot mirror Trump’s unilateralism and take matters into their own hands. They need to go through the World Trade Organization and wait for formal authorisation to reciprocate, without expecting a quick resolution or that Trump will have much respect for the eventual ruling.

In short, both self-interest and principle counsel restraint and no (immediate) retaliation. This is the time for Europe and China to stand tall. They should refuse to be drawn into a trade war, and say to Trump: you are free to damage your own economy; we will stick by policies that work best for us.

Provided other countries do not overreact, Trump’s protectionism need not be as costly as many accounts make it sound. The value of trade covered by the measures and countermeasures resulting from Trump’s trade policies has already reached US$100 billion, and Shawn Donnan of the Financial Times reckons that this figure could soon reach more than US$1 trillion, or 6% of global trade. This is a large number. But it assumes retaliation, which need not occur.

More important, what matters is incomes and welfare, not trade per se. Even if the volume of trade takes a big hit, aggregate economic performance need not suffer much. Some European airlines favor Boeing over Airbus, while some US airlines prefer Airbus over Boeing. Trade restrictions may result in a total collapse in this large volume of two-way trade in aircraft between the US and Europe. But the overall loss in economic welfare would be small, so long as airlines view the two companies’ products as close substitutes.

This is not to minimise the costs that specific European and Chinese companies may incur as the US market becomes more closed. But for every exporter forced to seek alternative markets, there may be another domestic firm presented with a new economic opportunity. As US trade shrinks, there will be also fewer American competitors and less US competition.

Economists typically make the point in reverse, when they argue against focusing excessively on the losers from freer trade, and they decry the tendency to overlook the beneficiaries on the export side. They should not be prone to the same fallacy now, by ignoring that US protectionism surely will generate some beneficiaries as well in other countries.

Trump’s protectionism may yet result in a global trade war, with eventual economic consequences that are far more serious than the self-harm it entails at present. But if that happens, it will be as much the result of miscalculation and overreaction on the part of Europe and China as of Trump’s folly.

A post-alliance US?

President Donald Trump’s disdain for alliance commitments suggests that we might be heading into a new era in geopolitics—an era characterised by a post-alliance US. While US allies will be hoping fervently that that isn’t the case, it probably makes sense to think through some of the ramifications of that scenario.

True, the Trump administration continues to emit a range of conflicting signals about alliances. Within the pages of the National Security Strategy (PDF) and the unclassified summary of the National Defense Strategy (PDF)—the formal documents underpinning declaratory strategy—allies are seen as positive contributors to US security. Yes, the documents continue to expound Trump’s point about the need for allies to carry more of the weight. See, for example, page 28 of the NSS: ‘We need our allies … to modernize, acquire necessary capabilities, improve readiness, expand the size of their forces, and affirm the political will to win.’

But the dominant picture is that the current US alliances are an enabler, an asymmetrical strength in the emerging environment of competitive great-power relationships. Broadly speaking, the US has allies while Russia and China don’t.

Unfortunately, the president seems not to share that view. Reports of his conversation with Swedish Prime Minister Stefan Löfven in March suggest that the president was envious of Sweden’s relationship with NATO—as a partner of the alliance rather than as a member of it. If true, that approach reflects something more than a concern about equitable burden-sharing: it suggests, in particular, a wish to avoid the automaticity of commitment that goes with NATO membership and Article 5 commitments.

It doesn’t, of course, necessarily mean an isolationist America. Even a post-alliance America would still have interests abroad. And the current US and Australian celebration of their ‘100 years of mateship’, dating from their cooperation at the Battle of Hamel in World War I, is clearly freighted with a range of messages that Canberra hopes to send to Washington: in particular, that America had an important global role, and Australian–US defence cooperation a history, before the post–World War II alliances came along.

But a more voluntarist approach to US strategic engagement would certainly mean a radical rethink by US allies of their own strategic futures. After all, the current alliance system is predicated on US engagement. In his post last week, Dominique Moisi drew the important distinction between US disengagement from NATO and one of the other members doing the same: ‘A sheep gone astray is one thing; if the shepherd leaves, the entire herd is at risk.’

At the risk of losing some of the elegant simplicity of Moisi’s metaphor, let’s concede that the shepherd has more than one flock. Some Europeans worry about the relative importance of NATO as Asia grows steadily in wealth, power and strategic importance. So it’s possible that the shepherd is merely rationalising priorities here.

But is that the real basis of Trump’s disdain for NATO? He honestly doesn’t seem to be more attracted to the US’s Asian allies than its European ones. Indeed, if the NATO summit in Brussels on 11–12 July goes badly, it will send a fresh wave of concern through Japan, South Korea and Australia about their own alliances, not a sense of relief that the increasing strategic importance of Asia helps make them safe. That’s because the US is even more central to its Asian alliances than it is to NATO. The San Francisco system is not called the ‘hub-and-spokes’ model for nothing.

Moreover, US allies in Asia live in closer proximity to radical and adverse power shifts than their European counterparts—and their doing so has a wonderful way of concentrating the mind. Yes, President Vladimir Putin is pushing the risk envelope in Europe, especially in regard to the Baltics, Ukraine and the Black Sea. And those are genuine issues for the NATO summit to address. But today’s Russia is a weaker power than yesterday’s Soviet Union. By comparison, today’s China is a—much—stronger power than it was in Cold War days.

So if the US does seem to be headed into a post-alliance age, it would be reasonable to expect a more substantial reorientation of US allies’ defence policies to unpack in Asia, not in Europe. Each of the Asian allies is more singularly dependent upon the US than any of its 28 NATO allies. If Japan and South Korea both feel a necessity to contemplate a Plan B for their strategic futures, we should brace for radical options in Northeast Asia. Moreover, we’d need to do a root-and-branch rethink of our own strategic future here in Australia.

Having America as merely an intermittent partner and not a committed ally would—and should—force a serious reconsideration of our options.

The art of the backflip

 

Donald J. Trump‏Verified account @realDonaldTrump May 13

President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!

US allies and grassroots Trump supporters had another head-scratching moment this week. After the US and UK had just ratcheted up pressure on the Chinese tech company ZTE and President Trump had launched a trade war with China, the Commerce Department had suddenly been ordered to save a giant Chinese company and thousands of Chinese jobs. Is MAGA (‘make America great again’) becoming MCGA?

As recently as February, Prime Minister Malcolm Turnbull was reported to be discussing with US officials the national security risks of a telecommunications market dominated by Chinese firms under the de facto control of the Chinese Communist Party.

Last month, the UK’s National Cyber Security Centre (NCSC) warned companies about using ZTE products because ‘the national security risks arising from the use of ZTE equipment or services within the context of the existing UK telecommunications infrastructure cannot be mitigated’. Also last month, the US Commerce Department imposed a seven-year ban on US companies selling products and services to ZTE in response to a raft of bad behaviour, including breaking sanctions against North Korea and Iran.

There has been no shortage of commentary on why the decision to save ZTE is unusual even by Trump standards. ‘Just about everything is odd about Trump’s support of Chinese firm ZTE’, wrote Heather Long in the Washington Post, listing a half dozen contradictions in the announcement.

Among them:

  • The rescue ignores a US House Intelligence Committee report from 2012 that concluded that ZTE ‘cannot be trusted to be free of foreign state influence and thus [poses] a security threat to the United States and to our systems’.
  • The incongruence of Trump ratcheting up pressure on Iran and North Korea while simultaneously forgiving ZTE, ‘a company that admitted it illegally shipped telecom equipment to Iran and North Korea’. As Long noted, ‘Trump’s own Commerce Department punished ZTE in April for “egregious behavior,” including repeatedly lying to the U.S. government’.

This creates an arbitrary standard for sanction-breaking companies, at a time when the US is trying to increase pressure on foreign firms doing business in Iran.

So why the backflip? Trump’s subsequent tweets about ZTE give a clue. A few hours later came this missive on the wider China–US trade dispute:

China and the United States are working well together on trade, but past negotiations have been so one sided in favor of China, for so many years, that it is hard for them to make a deal that benefits both countries. But be cool, it will all work out!

A day later this tweet hinted at pressure Trump was getting from home:

ZTE, the large Chinese phone company, buys a big percentage of individual parts from U.S. companies. This is also reflective of the larger trade deal we are negotiating with China and my personal relationship with President Xi.

And finally, this classic Trump message created a diversionary scapegoat and jumbled all the confused messages back into one incoherent package:

The Washington Post and CNN have typically written false stories about our trade negotiations with China. Nothing has happened with ZTE except as it pertains to the larger trade deal. Our country has been losing hundreds of billions of dollars a year with China…

As the tweets suggest, there are a couple of likely pressure points on President Trump that explain his U-turn.

The first, obvious one is the trade dispute with China. A recent Josh Rogin article in the Washington Post carried the title, ‘China gave Trump a list of crazy demands, and he caved to one of them’. Item five on the list: ‘Appropriately handling the ZTE case to secure global supply chain’.

Trump also appears to be taking heat from US farmers, upset at how the trade war is undermining their livelihoods. As the Post reported:

Polling by the trade group Agri-Pulse found that 67 percent of farmers said they voted for Trump, but in early March of this year, only 45 percent said they would vote for him again (and that was before much of the rising U.S.-China trade tensions).

A second pressure point could be Qualcomm, which supplies chips for ZTE phones. As Reuters noted, the ban forbidding US firms selling to ZTE could cost Qualcomm ‘close to half a billion dollars in revenue’. In addition, Qualcomm needs Chinese regulatory approval for its acquisition of Dutch semiconductor maker NXP. And the ban would have meant more than lost revenue. It would have encouraged China to build alternative domestic suppliers. It’s hard to imagine that Trump’s backflip on the ban will do anything to slow China down on this front, but China may resume its review of Qualcomm’s acquisition of NXP.

Either way, the backflip looks like bad deal-making on multiple fronts. It undermines Western efforts to isolate badly behaving companies and those that pose national security risks. It cuts across the new US approach on Iran. It erodes the US negotiating position with China for both a ‘mini deal’ and for a wider strategic deal on trade.

Finally, it has spurred China to accelerate its own chipmaking capability.

Frau Merkel goes to Washington

Chancellor Angela Merkel visited Washington on 27 April for only the second time since Donald Trump became president. It was described as a ‘working visit’ and lasted just 22 hours, including about two and a half hours with the president.

The sparsity of these visits (they’ve also met twice in Europe, including at the 2017 G20 meeting in Hamburg) is partly explained by the paralysis in Germany as a result of the 171 days it took to form a government after the September 2017 elections. But there’s no getting around the facts that the two leaders have little personal chemistry, their world views are poles apart and there are major policy differences between them.

Chancellor Merkel’s first visit to Washington in March 2017 was overshadowed by President Trump’s apparent refusal—now described by the President as a ‘misunderstanding’—to shake hands with her. Then, after the G7 summit in May 2017 in Sicily, at which the President’s views on key issues such as climate change appeared uniformly run counter to European views, the Chancellor made her landmark public comment to the effect that Europe was now on its own and could no longer rely on others.

The subsequent media speculation that Chancellor Merkel might become the leader of the West, given disillusionment with the US President, wouldn’t have helped the atmospherics. And it seems as though the President sees Germany as a particularly egregious example of all the wrongs he wants to right.

He’s accused Germany, among others, of unfair trading practices and intends to impose tariffs on steel and aluminium products from EU countries—including Germany—from today. When the Germans and other Europeans responded with threats of counter-tariffs, Trump replied by singling out German car brands for particular attention.

He has constantly urged other NATO members to lift substantially their contribution to global security and bear more of the burden for this, especially by meeting NATO’s target of members spending 2% of GDP on defence by 2024. Germany has been particularly recalcitrant in this regard: its defence expenditure is currently only 1.2% of GDP.

President Trump is justified in some—but not all—of his criticism. Other EU members have been highly critical of Germany for not investing more of its huge trade surplus within the union. And Germany’s poor showing on defence—although partially explained by history—is not at all commensurate with its size and importance globally and within Europe. There are many within Germany who also argue very strongly for it to accept more responsibility internationally.

So expectations weren’t high for the Chancellor’s visit to Washington last week. Despite a determined attempt by both leaders to show the assembled media that they got along—kisses, any number of handshakes, smiles, public congratulations from the President on the Chancellor’s re-election—Angela Merkel got precisely nowhere. That despite no doubt putting her arguments on all the important issues as directly and cogently as she can (and she’s a formidable and powerful advocate). On trade, she was forced simply to say, somewhat lamely, that ‘the President would decide’ on whether to impose steel and aluminium tariffs, a decision that has now been delayed until 1 June.

On defence, the Chancellor had to listen to President Trump yet again publicly calling on the Europeans to do far more and accept more of the burden. Her promise, in turn, that Germany would do its bit rang very hollow. It’s far from doing that and has little chance of meeting the NATO target by 2024. Even though the chancellor told the president that this would increase next year to 1.3%, the NATO target isn’t even mentioned in Germany’s grand coalition government (GroKo) agreement between Merkel’s Christian Democrat/Christian Social Union (CDU/CSU) and the Social Democrats (SPD).

On Iran, the President seemed still inclined to withdraw from the nuclear deal, although he did acknowledge that building on the existing deal (as proposed by President Emmanuel Macron) was also a possibility.

Inevitably, given the coincidence of timing, Chancellor Merkel’s visit is being contrasted with the visit to Washington a couple of days earlier by President Macron. There’s no question but that Mr Trump finds Macron a more congenial partner, and this was reflected in the high profile and pomp of President Macron’s program.

Emmanuel Macron and Angela Merkel have approached the trans-Atlantic relationship differently. Mr Macron has tried to get personally close to the president, has hosted him in Paris (with all the trimmings), has announced a sharp increase in French defence expenditure and has been a strong partner for the US, including through French participation in the recent missile strikes in Syria. That has opened the door for President Macron to put French (and European) views openly and clearly, including to Congress, something Angela Merkel wasn’t able to do.

The Chancellor’s approach has been more direct and policy-oriented, outlining Germany’s position and not hiding differences. For example, she ruled out, in advance, participating in the Syria strikes and has stoutly defended both the Paris climate change accord and the Iran nuclear deal.

It is, however, too much to contrast Macron’s three-day state visit with Merkel’s 22‑hour working visit. That reflects their differing styles, rather than being a deliberate US snub. And their visits to Washington were carefully coordinated: Mr Macron and Frau Merkel had spoken at length on 19 April, when President Macron visited Berlin, and no doubt were in close touch at the time of their respective visits.

And President Macron’s approach didn’t result in anything more on trade, Iran or climate change than Chancellor Merkel’s.

But it seems clear that, at least for now, Macron is filling a vacuum where Germany used to be. Partly reflecting its domestic political circumstances, Germany has been absent for too long on the big issues for Europe and the world. It’s high time that it resumed a leadership role, especially with such a willing and energetic partner as President Macron’s France.

And there’s no doubt that Macron is staking a claim for European leadership and for being the preferred partner of the US in Europe post-Brexit. He recently also outlined a vision— not necessarily shared by Angela Merkel—for Europe, and defended democracy and Western values, in a significant speech to the European Parliament.

Let’s hope the Chancellor soon rejoins him. It would be a pity if the Washington Post proved right with its over-the-top comment on 27 April that German ‘hesitation’ risks it becoming ‘Europe’s weakest link’.

Leading to (no)where? Trump’s national security strategy

With great fanfare, US President Donald Trump released his government’s first national security strategy. As expected, it continues his theme of ‘America first’ and the need to restore US power and global leadership. It’s also markedly different from President Barack Obama’s 2015 version, which stressed multilateralism as the preferred way of addressing major political, economic, security and environmental challenges.

Instead, America’s security strategy is now to be based on ‘principled realism’ and the notion that the US is in a continuous competition with both adversaries and partners. However, while there are some positives, the 2017 strategy ultimately fails to provide a coherent blueprint for restoring US leadership credentials, including in the Asia–Pacific.

To start with, because of Trump’s erratic and impulsive character, the contradictions in the strategy are even more pronounced. As Max Boot points out, the document ‘reveals an administration in conflict between the isolationist impulses of the president and the more traditional, internationalist beliefs of his senior aides’. There’s Trump’s deep-seated resentment of what he sees as illiberal trade practices by foes and friends alike. There’s his lamenting about ‘unfair burden-sharing with our allies’, and his launch speech reiterated his belief that ‘countries [that is, allies] that are immensely wealthy should reimburse the United States for the cost of defending them’. But there’s also the commitment to remain engaged strategically in the ‘Indo-Pacific’ and elsewhere, to ‘lead again on the world stage’, and to push back against ‘revisionist China and Russia’.

In principle, the last point is welcome news for Australia and the rest of the region. Indeed, the most refreshing part of the strategy is its discussion of China’s rise and the need for the US to ‘marshal the will and capabilities to compete and prevent unfavourable shifts in the Indo Pacific’. Recognising that efforts to socialise China into becoming a responsible stakeholder in the international system, it calls out Beijing’s challenge:

China is using economic inducements and penalties, influence operations, and implied military threats to persuade other states to heed its political and security agenda … China presents its ambitions as mutually beneficial, but Chinese dominance risks diminishing the sovereignty of many states in the Indo-Pacific. States throughout the region are calling for sustained US leadership in a collective response that upholds a regional order respectful of sovereignty and independence.

The strategy also vows to ‘redouble [America’s] commitment to established alliances and partnerships’, including with Australia. It also explicitly seeks to ‘increase quadrilateral cooperation with Japan, Australia and India’.

So far, so good. Unfortunately, however, the document is less innovative on what exactly to do about China’s challenge to the rules-based order and American primacy. Indeed, its prescribed actions sound almost identical to Obama’s ‘rebalance’, a term the Trump administration deliberately axed once in office: strengthening alliances; deepening new relationships; a commitment to freedom of the seas and the peaceful solution of territorial and maritime conflicts; and a strong forward military presence. But more of the same is unlikely to restore allies’ confidence in America’s ability to check China’s growing power. For instance, the strategy has hardly anything to say about fixing Trump’s lacklustre approach to Southeast Asia other than helping countries to address the ‘growing terrorist threat’. For most of those nations, China is a much bigger issue.

Most problematic, however, is that the strategy fails to deliver key ingredients of US leadership. The first has to do with values, or US ‘soft power’. The document ‘celebrates America’s influence in the world as a positive force’ and declares that the US will ‘lead by example’. Yet, under Trump, America’s global standing and influence have been in freefall and the document doesn’t provide any convincing formula for turning that around. For instance, when it speaks of international cooperation, it emphasises protecting ‘American sovereignty’, doesn’t mention the United Nations once, and stresses that the US will prioritise ‘its efforts in those organizations that serve American interests’. That’s hardly a winning design for global ‘leadership’—witness the recent UN Security Council Resolution on the status of Jerusalem (debated on the same day as the strategy’s launch) in which the US was outnumbered 14 to 1. Moreover, while Obama cited climate change as a ‘top strategic risk’, Trump’s strategy doesn’t even mention this serious global security problem. Instead, it talks at length about ‘energy dominance’ in a way that signals more environmental degradation. It’s unclear how and where the US intends to lead.

Finally, on the economic front, the strategy’s main thrust is to ‘insist upon unfair and reciprocal economic relationships to address trade imbalances’. The launch address also celebrated America’s withdrawal from ‘job-killing deals such as the Trans-Pacific Partnership’—a major strategic blunder that’s undermining US leadership in Asia. The strategy’s emphasis on pursuing ‘bilateral trade agreements on a fair and reciprocal basis’ is short-sighted and fails to recognise that America will likely further lose economic and strategic ground in the region.