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Global Trends by Martin Khor

Monday 24 April 2017

Assessing President Trump at 100 days

This week, Donald Trump will mark his first hundred days as US President.  It’s time to assess his impact on the world, especially the developing countries.

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Sometime this week – on 29 April to be exact – it will be the 100th day of Donald Trump’s Presidency of the United States.

A good time thus to review what it has meant for the world. It’s still too early for firm conclusions.  But there is much that is of serious concern.

In recent weeks there have been many U-turns from Trump. He had indicated the US should not be dragged into new foreign wars but on 6 April he attacked Syria with missiles, though there is no clear evidence that the Assad regime was responsible for the use of chemical weapons.

Then his military dropped what is described as the biggest ever non-nuclear bomb in Afghanistan.

Critics explain that this flexing of military muscle was aimed at the domestic constituency, to boost the President’s sagging popularity.

 

Perhaps the actions were also meant to create fear in the leaders of North Korea.  But they instead threatened to unleash nuclear bombs if it is attacked.

Trump himself threatens to bomb North Korea’s nuclear facilities.  With two leaders being so unpredictable and indeed so crazy, we might unbelievably be on a verge of a nuclear war.

As Financial Times commentator Gideon Rachman remarked:  “There are members of the president’s inner circle who do indeed believe that the Trump administration is seriously contemplating a ‘first strike’ on North Korea.  But if Kim Jong-un has drawn the same conclusion, he may reach for the nuclear trigger first.”

Let us all hope and pray that this nightmare scenario does not become reality.

This may be the most unfortunate trend of the Trump presidency.  Far from the initial expectation that he would retreat from being the world policeman and work for “America First”, the new President may find that fighting wars in third world countries may be easier to make him popular than winning domestic battles.

Another about-turn, which is welcome, was when the US President conceded that China is after all not a currency manipulator.  On the campaign trail, he had vowed to name China such a manipulator, as a prelude to imposing a 45% tariff on Chinese products.

Trump continues to be obsessed by the US trade deficit, and to him China is the main culprit, with a $347 billion trade surplus versus the US.

However, the US-China summit in Florida on 7-8 April cooled relations between the two countries.  They agreed to a proposal by Chinese President Xi Jinping to have a 100-day plan to increase US exports to China and reduce the US trade deficit.  

For the time being the much anticipated US-China trade war is off the radar.  But Trump has also asked his Commerce Secretary Wilbur Ross to prepare a report within 90 days on the US’ bilateral trade deficits with its trading partners, and whether any of them is caused by dumping, cheating and subsidies.

Once Trump has the analysis, he will be able to take action to correct any “anomalies”, said Ross.

We can thus expect the Trump administration to have a blueprint on how to deal with each country to bring down the US deficit.  

If carried out, this would be an unprecedented exercise by an economic super-power to pressurise and intimidate its trade partners to curb their trade surpluses with the US, or face action.

Another threat could come from a tax reform bill being prepared by Republican Congress leaders.  The original paper contains a “trade adjustment” system that would tax US imports by 20% and exempt US exports from corporate tax.

If such a bill is passed, we can expect an outrage and many cases against the US at the WTO. Due to opposition from several business sectors in the US, this trade-adjustment aspect could eventually be dropped or modified considerably.

In any case, as the new US trade policy finds its shape, the first 100 days of Trump has spread a cold protectionist wind around the world.

On another issue, the icy winds have quickly turned into action. Trump has moved to shred Obama’s climate change policy.  The Environmental Protection Agency, which now has a climate change sceptic as its new head, faces a 31% budget cut, has been ordered to revise its standards on tailpipe pollution from vehicles and to review the Clean Power Plan, the centrepiece of Obama’s climate policy.

“The policy reversals also signal that Mr Trump has no intention of following through on Mr Obama’s formal pledges under the Paris accord,” says an article in the New York Times.            

Will the US pull out of the Paris Agreement?  An internal debate is reportedly taking place within the administration.  Even if it stays on, the new US delegation may discourage or stop other countries from moving ahead with new actions.

Another adverse development is Trump’s intention to downgrade international cooperation.

Trump’s proposed budget has a big cut of 28% or $10.9 billion for the United Nations and other international organisations, the State Department and the US Agency for International Development. 

At the same time, the UN humanitarian chief Stephen O’Brien urgently requested an injection of donor funds to address the worst global humanitarian crisis since the end of the Second World War.

“Cutting its funding at a time of looming famine and the world’s largest displacement crisis since World War II is really unconscionable and could really have devastating consequences,” said Bernice Romero of Save the Children.

Trump also proposed to cut the US contribution to the UN budget by an as yet unknown amount and pay at most 25% of UN peacekeeping cost. 

The proposed Trump budget will likely be challenged by the Congress which has many supporters for both diplomacy and humanitarian concerns.  We will have to wait to see the final outcome.

Besides the reduction in funding, the Trump foreign policy approach is also dampening the spirit and substance of international and development cooperation.

For example, the President’s sceptical attitude towards global cooperation on climate change will adversely affect the overall global attitude towards climate action. 

The world would be deprived of the cooperation it urgently requires to save itself from catastrophic global warming.

 


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