It is not that Trump campaigned in poetry and is now governing in prose. He has been true to his word, most of the time. He threatened tariffs on allies and foes. He said he would pull out of multilateral institutions. He stated ominously that he would get rid of government departments altogether. His cabinet nominees have been outlandish as promised by him. In both the Middle East and Ukraine, we are yet to see Trump’s full hand. But what little he has said about Gaza has been nothing short of outrageous. All this in less than a month of assuming office. There are decades when nothing happens and then weeks when decades happen. 4 more years of Trump seems like an eternity.
The more interesting analysis, preliminary because it is still early days, is to look at two aspects of Trump’s decision making. One, is he always getting his way? If not, what is his strike rate? Two, is he beating a strategic retreat in some instances? If so, what is making him do it? This tentative analysis should be interesting to all of Trump’s partners so that they can be better equipped to deal with his chaotic leadership style over the next four years.
First, the question of imposing tariffs. Tariffs were announced with great fanfare on Mexico, Canada and China. Bizarrely, Mexico and Canada were subject to higher tariffs than China, which ironically has been declared “the” principal rival and threat to the US. But, after tough, last minute negotiations, Trump decided to give both Mexico and Canada a month’s reprieve. The main reason was not to give the friendly countries of Mexcico and Canada more time, but because the Wall Street stocks tumbled and reacted very negatively to the announcement of tariffs on these two countries. The Wall Street then moderated its losses once Trump gave these two countries more time. This could not have been lost on Trump’s international partners. Lesson one: Trump’s actions are not irreversible and he listens to the stock market and the domestic economy more than anyone else.
With China, it played somewhat differently. Trump did impose a 10 per cent tariff on Chinese exports to the US. But China, in what is seen as a highly strategic riposte, put export controls on critical metals such as Tungsten, Bismouth, Indium, Molybdenum and Tellurium. Tungsten, in particular, is of huge importance for the US and China supplies 45 per cent of US Tungsten imports. It is clear that China this time was fully prepared for a trade war with the US. Equally, this is a warning to Trump that any action he contemplates against China will hurt both countries. Trump will henceforth need to ask himself the question as to whether his country can afford the pain. Lesson two: Trump respects power and that is why he likes his “friend” Xi Jinping. Trump is expected to talk to Xi Jinping soon, he knows there is no other option with China.
Trump’s actions aimed at undermining the multilateral institutions can be expected to continue, mainly because it is relatively “cost-free” for him. So, his pulling the US out of the Paris Climate Accords, the World Health Organization, initiating sanctions against International Criminal Court personnel, withdrawal from the OECD global tax deal and ceasing henceforth to participate in the UN Human Rights Council will all sound the death knell of multilateralism as we know it. He may also be happy to see the WTO wither away. Lesson three: Trump is happy to punch opponents who cannot push back.
While the Senate and the Congress appear supine vis-a-vis Trump, the judiciary is showing some signs of fighting back. Thus, in cases involving Trump attempting to freeze federal funding, get rid of federal workers or end birthright citizenship, the Courts have stepped in and put Trump’s plans on hold. While it is not clear that the Courts can permanently veto Trump, at least there is serious opposition to him. But if these cases find their way to the Supreme Court, Trump having packed the top court with a conservative majority may eventually have his way. Lesson four: there are still some constituencies in America which are showing spunk. Trump will doubtless target them in due course.
US may have got its way with Panama, but that is seriously not a power play. A bigger test will come when Trump turns his attention to EU with tariffs and his claims on Greenland. Lesson five: Trump is motion in perpetuity. He believes in keeping all countries off guard, big or small, friend or foe.
With some other issues, Trump is as mercantilist as they come. On Ukraine, he has made it clear that he is more interested in the critical minerals that it possesses, than in any moral argument involving the territorial integrity of Ukraine. Things could not be clearer to Russia. Lesson six: Trump’s ultimate mantra is show me the colour of the money.
The Middle East is a quagmire that sucks in even the shrewdest American Presidents. Trump has shocked everyone with his proposal to evacuate Gaza and then develop it into a “riviera”. If only wishes were horses. Almost no Arab country has welcomed his proposal. Israel may love it but even it knows this proposal is dead on arrival. That may not stop Trump and Netanyahu and therein lies a big danger for the Middle East. Lesson seven: His first trip will be to Saudi Arabia where he is seeking one trillion dollars as investment in the US. Rest of the things do not matter to him so expect him to completely forget about the proposal to evacuate Gaza. He is not wedded to any of his proposals in perpetuity so he can walk back from them at any time of his choosing.
What of India? Well, so far so good. Our PM will go to Washington and will hopefully work his magic on Trump. We have also been smart in taking some pre-emptive measures, whether it is accepting illegal immigrants back to our country or reducing the customs duties on items of interest to the US. India should continue to cultivate Trump and avoid getting into his crosshairs. Final lesson: lie low, hide your strength and bide your time. Easier said than done. Just ask China!
Diplomacy and Geopolitics 