Trump Ends Diplomacy As We Know It
Trump, as Captain of the Good Ship America, is going to tack left and right in the next four years, just as he did during the campaign. This may surprise, but cutting through the theatrics and bluster, Donald Trump’s core policies overlap more with Bernie Sanders’ than with the Republican Party’s.
He will also build history’s first Business Presidency and replace international diplomacy with the “Art of the Deal” or no-nonsense negotiating strategies. This involves deploying any and all techniques to achieve their desired goals from seduction to threats, trash talk, anger, baiting, insults, shame, guilt, bullying, bribes and fear.
This is precisely how he drove 16 other Republican primary candidates off the stage and took over what remained of the Republican Party.
Such machinations are not personal, but simply the rough and tumble of New York’s business subculture or of sports where guys knock one another’s teeth out on the field then go for beers after the game. Thus a parade of Republican rivals have been kissing the Trump ring this week even after insulting one another viciously. They want jobs. He wants to look inclusive and enlist or silence them.
I predict that Trump will also reach out to Democrats, while Independent Bernie Sanders has already signaled he’s more than willing to help Trump achieve the “leftish” issues they agree on: raising minimum wages to $10 an hour; infrastructure; protectionism; taking on Wall Street by dividing banks and brokerage arms; taking on pharma to lower drug prices and keeping Social Security and Medicare intact while improving Obamacare.
“Unfettered free trade has been a disaster for American workers,” said Bernie, who also endorsed Trump’s idea of slapping tariffs on Mexican and Chinese products made for U.S. companies abroad. “A tariff may well be one of those options. If Mr. Trump has the guts to stand up to those corporations, he will have an ally with me.”
(But Sanders has also called upon Trump to dump one of his controversial advisors and to apologize for his remarks about immigrants, Muslims, women, the disabled and Mexicans.)
That aside, Trump will move quickly to implement his “right” wing policies: increasing military spending to Cold War levels; tax cuts for the rich and corporations and encouraging drilling, fracking and pipelines to create jobs and reduce dependency on the Middle East.
There’s now a horse-trader in the White House who doesn’t care about norms, history or past tradeoffs.
The knock-on effects, both left and right, will be immediate and most dramatic for Mexico, then Canada. He aims to re-constitute both relationships and his opening salvos have been to build a wall against Mexico and to build Keystone XL to bring Canadian oil to the U.S. Both are ploys: One is a stick and the other a carrot.
Trump leaves Mexico no bargaining position other than to offer concessions to dissuade or mitigate him. Its options include: agree to reduce its proportion of jobs under a trade deal; agree to tariffs; agree to pay for the cost of stopping the flow of drugs and undocumented workers and/or agree to open its oil and agricultural sectors to potential U.S. ownership.
Canada is in a similar position. To get Keystone and a continued trade deal Canada must consider concessions: scrap supply management; agree to meet its NATO commitment to spend two per cent of its GDP on security, from $20 billion a year to $40 billion a year; share jurisdiction of the Arctic with the U.S. and/or agree to a missile shield. Alternatively, the two countries could formally merge their military forces and create a NORAD navy, air force and army.
None of this is palatable, but there’s now a horse-trader in the White House who doesn’t care about norms, history or past tradeoffs.
Before he takes the controls, this “New Deal” has already shifted the paradigm. For example, Trump took credit this week for “stopping” Ford Motor Co. from moving a small plant from Kentucky to Mexico. True or not, Ford and other multinationals from Apple to General Electric now realize that they will be held responsible, and rewarded, for repatriating and creating jobs.
Geopolitically, the game’s the same. Trump’s bigger military, and NATO’s, is not good in the Kremlin, North Korea or the Middle East. Trump may have praised Putin, but this looks like a tactic to soften up the despot for some extremely tough talk behind closed doors concerning Syria, Ukraine, Georgia and Moldova.
That’s a big question mark, but, indisputably, the next CEO of America Inc. has already established that world affairs will no longer be business as usual.
Financial Post first published Nov. 18, 2016