Donald Trump's Thinking

The national conversation being what it is, it is unusually difficult to see the substance through the noise. Especially when it comes to President Donald Trump.

On the one hand we have Trump supporters who believe that he can do no wrong. On the other we have detractors who believe that he can do no right.

To see the method behind the Trump foreign policy we turn to Joel Kotkin, not a MAGA Republican, but a sane and rational commenter on the passing scene.

One may agree or disagree with the Trump policies, but they did not arise out of nothing. They are designed to address certain important issues.

Obviously, if Trump wants to make America great again, this means that he believes it has been in decline. So says Kotkin:

He is a phenomenon borne of concern about American decline, ranging from failing education levels and massive debt to frayed national coherence and fading industrial, even military, supremacy. He is driven not by imperial ambitions (despite his absurd claims about acquiring Greenland and Canada), but rather in response to the consequences of recent imperial overreach.

There is more to American decline:

The US’s own population growth has also slowed, and recent economic trends have mostly benefitted the affluent and those working for the government. The top 10 per cent of all earners now account for half of all spending. This is well above the roughly one-third of three decades ago. Partially this comes as many of the companies historically tied to high wages – US Steel, General Motors, RCA, Xerox, Intel and Boeing – have either disappeared or markedly declined.

Evidently, Trump’s tariffs are designed to correct the imbalance, to return great companies to our shores. They might or might not work. Many seasoned commentators believe that they are an error, but they do address a real problem:

As American Prospect correctly points out, American investors are effectively funding China’s bid to displace the US as the world’s reigning superpower. America’s inability to build things – most notably commercial and military vessels – means that, even in terms of defence, its power is waning.

Trump’s policies suggest that we have been overly generous toward other nations and that we have been paying a price for it. Not because of free trade, but because other countries have been imposing tariffs on American goods.

According to one study, the growing trade deficit between the US and China cost us roughly 3.7million American jobs between 2001 and 2018. It was partially because of this abandonment of the working class by the global liberalised economy that Trump was able to win voters in once solidly Democratic industrial states, first in 2016 and then again last year.

America’s industrial base has been hollowed out:

Yet for now, the American economy – outside the dynamic fossil-fuel sector – is dominated by companies that deal primarily with digital consumerism, information and communications. Some of the world’s most valuable firms – especially Amazon, Microsoft, Google, Meta and Apple – do not produce their hardware in the US, if they produce any physical goods at all. Indeed, the only big emerging industrial innovators are Tesla and Space X, both controlled by the notorious Elon Musk.

As for Europe, it is clearly in decline. Between its welfare statism and its green policies, it has damaged itself, perhaps irretrievably.

Europe faces more fundamental problems than tech penis envy. The continent falls well behind the US in creating new significant growth companies in any field. In the past half-century, 250 companies worth more than $10 billion were created in the US, compared with just 14 in Europe. Europe needs far more than just a better industrial policy. It needs a cultural revolution. ‘In Europe, you have to get permission today for anything’, one German investor told me recently. ‘In America, you do what you want and hope not to be caught.’

Kotkin continues:

Unless Britain and Europe radically change course, the continent’s only future will be in providing luxury goods and historic tourism to the affluent from America, China and India. In the world of power politics, the former caput mundi has been relegated, as one German observer put it, ‘to the kids’ table of international diplomacy’.

Importantly, Trump seems to be bringing Saudi Arabia into an important role in international diplomacy.

Instead of appealing to America’s traditional European allies, Trump seems more keen on working with Saudi Arabia, which has prodigious oil and wealth. This reflects the Trumpian worldview that the real battle lies with China, especially when it comes to seeking to influence the developing world and emerging markets, where Chinese mercantilism and aggression are a growing concern.

Is he right or wrong? Time will tell. But, clearly there is a rationale behind the new policies.

Under Trump, America will act more like a traditional Great Power, driven both by its sense of vulnerability and strict national interests. What comes next won’t be pretty. But mourning the passing of the old order will not bring it back to life.