EROSION OF CONFIDENCE IN THE LAND OF TRUMP

The US under the leadership of President Trump appears to be reflected in a massive slide in global confidence in the standing of the US. The Pew polls based on a variety of international markers have shown a serious drop in support for President Trump as a world leader across most of the developed world. While the withdrawal from support for the Paris Accord on global warming combined with the change of direction in the EPA to downplay environmental concerns may have played well at home with industrialists and shareholders in mining and various energy related ventures it does not sit well with those who see a greater need for environmental protection and had been expecting the US to continue in an environmental leadership role.

The recent shift away from support for US policies in the United Nations (eg the UN votes on Palestinian Issue) suggests the overt downgrading of US support for the UN in turn affected how the US is regarded by some other nations. The regard for the US as a leader of NATO has similarly slipped and the recent debacle at the G7 summit reinforces the public perception that the US is being side-lined as a preferred trading partner for its clumsy abuse of its partners.

Each of Mr Trump’s so-called “signature policies” are typically rejected by substantial numbers of non US observers. For example one sample set of polls (Pew, Spring 2017) set approval for the build a wall with Mexico project at 16% for and 76% against. Withdrawal from Trade agreements stood at 18% for, 76% against. Withdrawal from the Iran Nuclear deal 34% for, 49% against. Tighter restrictions on Muslims entering the US drew 32% for, 62% against. Withdrawal from International Climate Change agreements 19% for, 71% against.

A recent Gallup Poll of 134 countries showed for example that although under President Obama support for the US as a leader stood at 48% – after a year of Donald Trump this had dropped to 30%. This is the lowest level Gallup has recorded in the last ten years and is not only just a slump , but actually takes it below China (at 31%) and surrenders the first place to Germany now at 41% of the sample.

Trump’s version of “America First” policies has also apparently eroded support at home remembering that at the time of his first anniversary of leadership Trump had the lowest average approval of any elected President after one year in office.

Another aspect of the perception of the US is indicated in the growing divisions within the nation. The string of Trump led vitriolic statements directed to those who in Congress who dare question White House policy looks from the outside to be counterproductive and instead seems to foster unprecedented protests and a marked declining trust in public institutions.

While the main policies pushed by Mr Trump share features like looking after US interests first, it is also becoming apparent that extreme nationalism does not appeal to the entire GOP support base. For example the separation of children from their illegal immigrant parents at the Mexican border unleashed a storm of protest which saw some republicans in Congress express some of the same concerns as the Democrats.

One conventional measure of trust is the annual ranking review conducted by the Economist Intelligence Unit. That review looks at sixty different measures of electoral process, press freedom, expressed confidence in public institutions, freedoms etc. With nationwide protests against new policies, serious questions raised about legal process and election tampering and a major discrepancy between the popular vote and the vote of the Electoral College it is hardly likely that the post 2016 election results would not have raised questions. Attitudes to disadvantaged groups, religious and racial intolerance and a marked hardening of policies on immigration seemed to challenge traditional views of the US as a free and democratic society.

Traditionally a few years back, the US had been scoring as a full democracy although even before the last Presidential election there had been a noticeable decrease in confidence. Now, for the second year in a row the US, with a score of 7.98 out of 10 the US is now firmly classified as a “flawed democracy”. Those remaining as full democracies evidently include nations like the UK, Norway, Ireland and Spain while the US now finds itself in the company of nations like Italy, Chile and Mexico and in fact with the same rank as Italy (21%).

While I believe we should acknowledge the unwavering support for Mr Trump among his supporters in the “Red” States, some of the chosen Trump policies actually set up these states for future economic hardship. Look at some of the more obvious examples. The pressure put on the Europe with the US proposed tariffs on cars have resulted a push-back tariff on Kentucky bourbon (no doubt chosen because Kentucky is one of the Trump strongholds). Mexico is responding to its tariff imposition by sourcing alternative markets for its Soy bean (which will no doubt benefit Russia and Brazil) and both China and Canada have similarly chosen to target US agriculture in response to Mr Trump’s latest tariffs.

The simplistic notion that a powerful rich country like the US can simply bully poorer nations into making better deals (i.e. better for the US) has not gone well outside the US and to take just one obvious example, the TPP nations, upon learning that the US wanted to abandon their TPP proposed free trade system, have simply gone ahead without the US and are now looking to set up a better deal with China.

Some commentators have suggested that as the inexperienced Trump team discover by trial and error how to arrive at preferred outcomes there should be a gradual improvement in international perception. On the other hand humans everywhere traditionally show a marked unwillingness to accept criticism and it is unlikely that those criticised by Mr Trump will easily forget and forgive. Again using recent events as a marker, when an angry Canadian Parliament met to discuss Mr Trump’s post G7 criticism of Canadian Trade policies in general and Mr Trudeau in particular there was a totally unanimous (and very rare) cross party opposition to Mr Trump’s stated position.

It is probably too early to work out the long term consequences of Mr Trump’s tax reforms which left much more money in the pockets of the rich and increased the debt levels to an extent that many Federal supplied services are now forced to be cut. The drop in tax intake produces a self-imposed jump in debt which in turn feeds into trade pressures and takes the US into uncharted territory. It is certainly premature to speculate on how the tariff wars are going to work out, but the complex relationships between trade and national debt are unlikely to be familiar territory to a President whose main economics experience has been the wheeling and dealing in real estate.

(Reactions to this article would be appreciated)

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