Trump and the World

The institutional and principled foreign policy of postwar United States will be replaced by a transactional approach. It is an unstable basis for world order.
onald J. Trump’s electoral victory on November 8 is an inflection point for the United States and the world. Trump was a change candidate and change is coming both domestically and globally. But what are the implications of a Trump Presidency? This reflection considers what could be the drivers in the first years of a Trump presidency, with the understanding that it is still very early.
The election confirmed what has been known for quite a while, that the United States is a country deeply divided. The foremost priority for the new administration will be trying to bridge this gap. This will be difficult. Mr. Trump in particular seems ill-suited to pursue such an effort after a campaign of such vitriol and vulgarity. This combined with the manifest breakdown of the tools used to understand the public—the ever-wrong polling and surveys—mean charting a strong course of unity will be an uphill battle. Despite the reassuring words from Trump, President Obama, and Hillary Clinton following the election, the domestic scene in the United States could be unsettled for the foreseeable future. In this context, a President Trump can be expected to pursue headline initiatives that emphasize success in an attempt to move beyond the rhetoric of the campaign and to mollify his base of support.

At the outset, it must be emphasized once again that these are early days and much remains unknown about what is to come. Beyond the nature of Trump’s relationship with a Republican-controlled Congress, from which he is already showing signs of independence, the first question to be answered is what team Trump will bring with him to Washington. This will go a long way, though not all of the way, toward indicating the future policy posture of this administration. It appears that Mr. Trump will not involve himself in the minutiae of policymaking, delegating to surrogates who will be expected to deliver results. These surrogates will themselves likely have wide decision-making latitude. This allows for the moment a broad-stroke analysis of the areas where Trump himself will establish the drivers of policy. Trump can be expected to take an iceberg approach to policymaking—participating in the 10 percent that is visible and leaving the other 90 percent that happens beneath the surface to others.

Domestically, this translates into big projects. One immediate public relations-friendly deliverable would be funding for veterans’ benefits. Major infrastructure investment will, however, be the main immediate focus. A frequent campaign-trail theme that is within Trump’s comfort zone and has strong optics, infrastructure has already been floated as a growth project, calming immediate post-election market jitters. Trump may also make a conservative nomination for the Supreme Court in the early months to solidify his conservative support. Beyond tax cuts, we can expect President Trump to pursue of a mix of loosening and tightening restrictions—he has made de-regulating extractives a major goal in the effort to incentivize re-shoring of U.S. industry.

Internationally, Trump’s worldview is defined by power. In this vein there are only two countries that matter, Russia and China. Mr. Trump’s flirtations with Vladimir Putin are well documented, and he may consider two relatively quick initiatives to remove thorns from this relationship: the lifting of U.S. sanctions imposed after the annexation of Crimea in 2014 and the withdrawal of U.S. support for Syrian rebels. This would not signal a turn to full-blown partnership, but rather an arm’s length approach which cedes Moscow its zone of influence in the Near Abroad to reduce friction. From a geopolitical perspective this might lessen the impetus for Putin to behave as a spoiler internationally, which would be a positive outcome. However, Russia’s growing domestic discontent, demonstrated most recently in the record low turnout in October’s Duma elections, may spur the Kremlin to pursue other foreign adventures to galvanize internal support.

China is more complicated. It was one of Trump’s bogeymen throughout the campaign—his threat to raise tariffs on Chinese goods to 45 percent was a recurrent stump-speech applause line—and the new administration could initiate a trade war with Beijing with devastating consequences. This extreme scenario is supported by the fact that, to the extent that the current, sparse Trump Team has China experience, it is largely hostile to Beijing. However, for the moment it appears more likely that the new President will take a largely hands-off approach on China. It is now a foregone conclusion that one of Trump’s first acts will be to withdraw from the Trans-Pacific Partnership (TPP). The implications of this are significant from a global trade perspective (more on this below), but particularly in terms of regional dynamics. TPP was the most tangible and viable vehicle for maintaining a regional power structure centered on U.S. and Japanese, rather than Chinese, power. Pulling out of TPP essentially puts Japan, whose Prime Minister Shinzo Abe had gone all-in on the agreement, on an island regionally (not just geographically). Abe was one of the first leaders to contact Trump after the election and is expected to meet with him next week. Mr. Trump may offer assurances on security, but not on multi-lateral trade. One possibility in the short to medium term would be the announcement of bilateral U.S.-Japan trade talks, which would demonstrate Mr. Trump’s ability to get things done and bolster his image as a deal-maker without upsetting his protectionist base. Despite Trump’s strong statements to the contrary during the campaign, it is to be expected that U.S. forces will remain stationed in South Korea and Japan, though perhaps with some sort of symbolic public announcement of an enhanced co-financing agreement. In terms of broader regional security, the next years will be ones of heightened tension, notably in the South China Sea. Indeed, we have already seen share prices across the defense industry soar in anticipation of a global upswing in military purchases.

The focus on Russia and China will be accompanied by a lack of attention elsewhere. Europe simply will not rate for Mr. Trump. The European Union is consumed by its own problems and just does not have the external projection necessary to draw attention. Despite EU High Representative Federica Mogherini’s calls for the European Union to act as a principled superpower in the aftermath of the Trump victory, it does not have the clout to do so. To the extent that there is engagement, the Trump Administration will make Europe a punching bag for domestic public consumption. In this NATO will be the main vehicle, with the new Administration hectoring fellow members to meet the 2 percent defense-spending target. It is a simple and measurable benchmark that resonates domestically in the United States and which would provide Mr. Trump with a clear foreign policy victory if achieved. The Trans-Atlantic Trade and Investment Partnership (TTIP), already on life support, is now simply a non-starter. Trump, who has made much of his connection with the pro-Brexit wing of UK politics, may launch early exploratory discussions with the UK government on a bilateral trade agreement, in spite of its lack of legal authority to complete such a deal until its formal departure from the European Union.

Moving to the Middle East, Trump’s victory has been met with trepidation—with reason. For good or for ill, and with all its ups and downs, engagement in the region has been a constant of U.S. foreign policy for the past seventy years. This now seems certain to shift. Extricating the United States from the conflict in Syria will be part of what is likely to be a broader “hands off” approach, which will give regional powers room to pursue their own agendas. To the extent that the United States is engaged it will be a transactional, rather than principled, arrangement under the banner of fighting ISIS. The two exceptions here are Israel and Iran, which carry significant domestic political interest. On Iran, the signs point to Trump not seeking to overturn the Iranian nuclear agreement; however, pushed by the Republican-controlled Congress, he will likely try to increase pressure on Tehran. Trump has already spoken of strict implementation of the Joint Comprehensive Plan of Action with the imposition of additional sanctions. With regards to Israel, Trump may give Prime Minister Benyamin Netanyahu a free hand. Down the road, this may involve strikes against Hezbollah in Southern Syria to weaken Iran’s influence in the region. For the Gulf States and in particular Saudi Arabia, this evolution will have important implications. The transactional philosophy that is likely to drive the next administration´s policy will force other governments to approach relations with the United States from a deal-making perspective. As open-ended and structural approaches are in decline, this is the moment for discrete dealings. We may see repercussions in the immediate term in Yemen and in the Horn of Africa, where regional actors will be increasingly unfettered by limitations emanating from Washington.

Looking more broadly, the most immediate global impact of the Trump presidency will be in relation to trade. The mega-regionals that the United States has pushed under the Obama Administration, TPP and TTIP, can be presumed to be all but dead in their present ambitious form. Particularly in relation to TTIP, however, the Trump Administration may put forward a very limited tariff-only deal at some point. The dormant WTO agenda will not be resuscitated in their absence. To the extent that Washington pushes trade it will be bilaterally and on a limited substantive basis—as noted, it would not be surprising to see Japan and UK trade talks launched relatively early on. This would allow Trump to present himself as a dealmaker and to talk up U.S. leverage. There will also likely be changes to NAFTA. The agreement probably will not be repealed, as hinted at during the campaign, but rather adjusted, perhaps in particular to safeguard “Buy American” provisions in infrastructure projects. This would offer a very public and symbolic trophy while minimizing disruption to the underlying regime.

Energy and climate action will also be targeted. Under the Obama Administration these two policies were for the first time two faces of the same coin. This approach was unprecedented in United States, where the common assumption was that energy and climate policy naturally clashed: Energy policymakers were obsessed with security of supply while climate was at most an afterthought. This convergence is now under threat. The current administration has been an engine for global climate action and for creating the conditions under which countries around the world can pledge participation. The Energy Department under Secretary Ernest Moniz has been particularly crucial in connecting energy policy to spurring investment in innovation and securing the participation of developing economies. This momentum will not continue under the next administration and we can expect a slowing of the agenda globally. In addition, Trump will be under pressure to promote coal and facilitate oil and gas production, notably shale. The former could de-stigmatize coal use internationally, particularly in India, with serious effects on global climate efforts.

In sum, the world is entering a period of flux. The postwar U.S. approach to world affairs that emphasized institutional and principled foreign policy will be replaced by a mindset emphasizing immediate interests and a transactional approach. This means uncertainty and fluidity—as well as opportunity for powers that are able to marshal their strengths and exert influence regionally. The overall picture of global order is bleak, as the structures that had provided stability will weaken. In the short term, there will be a rush to deal with Mr. Trump. Those making this type of approach, however, should be aware that they are in it for the life of the deal and not for the long run. This is an inherently unstable basis for international relations—the consequences of which will be felt sooner rather than later. The move away from the global institutional architecture and its underpinning principles toward an openly power-based bargaining reality will have profound implications.

Ana Palacio is a member of the Spanish Council of State and is the former Minister of Foreign Affairs of Spain.