One of the most watched drama in 2016 was the election of the world’s oldest democracy – The United States of America and as dramatic the race was, equally surprising was its result in which a Real Estate magnet won against a seasonal diplomat by a whisker and became the 45th President of the world’s most powerful country.
This phenomenon which took the whole world by surprise was – Donald John Trump
From there the era of Trumponomics started and the world is still copping up with this new geo-political reality.
Trumponomics: The Philosophy
Trumponomics is a philosophy initiated by Donald Trump, as per which the interest of America is of utmost priority, even at the cost of its closest allies. Interest of USA should be achieved by using all the weapons in the arsenal, like applying economic pressure, flexing diplomatic muscles or by threatening with sophisticated military weapons.
This thought process doesn’t differentiate between allies and opponents, what matters is only selfish interest.
Though this era has started recently, still it has been so strong that it has swept the world like a tsunami.
Economic Pressure and its impact
Trade Deal with “Worst Abuser” – China
Trade has been the biggest factor driving relations between these two economic giants. Biggest factor in the rise of China is its export oriented industry with USA being its largest market. So much so that China currently has over $350 billion of trade surplus with America.
Correct way to reduce this deficit would be to align on a trade deal which will be beneficial for both the countries, though this new economic philosophy also had the same intentions, but its implementation has been faulty to say the least some of the examples are raising duties and taxes on the current imports of goods from China, in a hope to muscle its way into a favorable trade deal, insulting the proud China by calling them “WORST ABUSERS” and “CURRENCY MANIPULATORS”, restricting access to latest technologies like Google has restricted Huwaii to use its software.
This has not only worsened their relations, lead to huge losses to the businesses in both the countries also causing losses to investors and also to common people around the world due to erratic movement in stock market but not only that it also affected the poor farmers of US on whom retaliatory tariff was employed by China.
Not only China, but its closest allies also felt the fire, as US has also increased tariffs on imports of various products like taxes were imposed on products like steel and automobiles which impacted countries like Japan, Canada, Mexico and Germany the most.
This economic pressure has not only lead to losses around the world but also impacted the common US citizens as they have to pay a lot higher price then what they are supposed to pay.
Also due to retaliatory tariff being imposed by the world, the cost of doing business has risen all around the world and because of which only the common person has to suffer.
Not only the economic pressure, Trumponomics also believes in flexing its diplomatic muscles to have its way, even at the cost of isolating itself from the world.
Flexing of Diplomatic Muscle
The Paris Climate Change Agreement
Climate change has been a worry for all countries around the globe, so the whole world gathered in 2014 and signed an ultimate agreement to reduce the carbon foot print. Which we know as the Paris climate agreement.
But shifting to clean energy resources like solar energy is detrimental to the mining sector and the miners (which tends to be one of the biggest voter base) therefore the US under Trumponomics claimed that climate change is a hoax and pulled out of the deal, despite it being the biggest polluter in the world.
This move was made irrespective of knowing the fact that US will become the only country which has not signed for this agreement and will practically isolate itself form the world on Global warming
Despite the world, even the state government in the US itself advised against this catastrophic move, still the Federal government withdrew from the deal to satisfy the petty interest of Trumponomics.
Irrelevance of international bodies and Multi- lateral agreements
It also believes in following the rules made by international body like WTO till the time these rule satisfies its interest, and if these rule are against the interest then these institutions are being labelled as irrelevant.
Same has been the case with multilateral agreements like NAFTA which is just surviving despite facing numerous threats of being scrapped.
Though Trans Pacific partnership agreement between 10 pacific rim nations was not that lucky and was scrapped in the initial days of this philosophy, as it was believed that other nations like Vietnam are getting all the benefits and no though was given to the potential of an increased trade opportunity that this deal might have created.
The Military angle of the Philosophy
Weapon industry is also one of the major pillar of US economy. It provides jobs to thousands of people and also brings in huge amount of foreign reserves. So it is but natural that it needs to be protected to some extent, but under Trumponomics this protectionism goes to a whole new level.
Trumponomics believes in bullying the world to protect its industry and it follows what it preaches which can be seen in the whole drama around S-400 triumf in Asia.
Nations like India, Turkey (NATO ally) is being threatened against purchasing weapons like S-400 trimph anti-aircraft missiles from Russia, so that sale of THAAD (A US made gun of same nature) can be increased.
Even sale of sophisticated weapons were approved to Kingdom of Saudi Arabia because it provided an irresistible deal of $ 110 billion. This was done despite a strong congress resistance
Turmponomics neither cares about allies nor about being isolated, it is an inward looking philosophy which is against globalization and only believes in protectionism.
The Future with Trumponomics
Recently a study by World bank suggested that if the trade war between China and US continues it may reduce the growth rate by .5%.
Think what will happen if we extrapolate this figure to the global level as US under Trumponomics is virtually having a trade war with all the nations of the world.
The World which still has not fully recovered from the after-shocks of 2008 financial crises has started to look at another crises in making due increase in popularity of this hyper protectionism policy and its manifestation can be seen in Brexit, rise of rightist parties around the world like Marine Le-Pen in France.
With more and more followers of this policy being elected around the world, the future of the world doesn’t look so promising.
The Road Ahead
Philosophy like these spreads like wild fire, it is a beast which needs to be tamed at the right time. Forces around the world which believes in free trade should join hands against this minority and stop them before it captures the world.
Some promising examples have been the people of United State who have wholeheartedly opposed this inward looking philosophy and has stated a strife against it, the most prominent example being the State of California, which despite federal government rejecting the Paris deal, made separate deal with different nations of the world to promote clean energy.
Even EU has come out in open opposing g this philosophy which was proved in the elections of France and Germany where the leaders favoring an open economy were elected.
Hence even in these testing time the world has an opportunity to come together as one and save the fundamental philosophy of free trade and open economy so that we can again became a global village as we dream to be.