Will Trump destroy the global order that the U.S. has led?
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By
Will Hutton
The United States may no longer be the hegemonic world power that it was in 1945, but it remains unambiguously the world’s leader. America’s willingness to lead in multiple forums—the United Nations, climate change conventions, NATO, trade agreements—sets the tone for global rule of law. Yes, America has its blemishes and so does the global system, among them tensions over the unequal gains from globalization and double standards on human rights. But U.S. leadership of the international treaty system, with multilateral rules and shared processes of mutual respect, is still the first and last line of defense against worldwide forces that insist on brute assertion of self-interest justified by appeals to each nation’s special culture.
The threat to the globe, and to the United States, is that Donald Trump personifies those self-same menacing forces. His contemptuous attitude toward the international system he now leads will shatter the framework that however imperfectly has created a global society and pursuit of international rule of law. Trump could mark the end of an epoch—and the opening of a perilous new one of dog-eat-dog competition, ruthless assertion of individual national interest, and a hardening of enmities. Bluntly, it is pure poison.
Trump’s view of the world is based on a profound misreading of how the system works, how asymmetrically it is organized to benefit the United States, and the terms on which the rest of the world has accepted, albeit grudgingly, what is an extraordinarily biased bargain. The United States is not the victim of the current international framework. It is one of its principal beneficiaries. American-led globalization is the foundation of America’s astonishing corporate success. The great West Coast high-tech multinationals—Apple, Google, Facebook, Microsoft, Amazon—and the wave of startups and scale-ups that are following them astonish the globe.
These multinationals could not exist without an open trading system and the ongoing pre-eminence of the dollar as the world currency. Wall Street and Silicon Valley are the unambiguous centers of global financial and technological power. Trump talks as if the United States were an economic down-and-out. In fact, America has created proportionally more jobs than any other leading country since the financial crisis. Its unemployment rate is at a nine-year low—4.6 percent. Its companies, banks, and brands straddle the world. It has created a global supply chain to support its dynamic continental economy: About two-thirds of U.S. imports are brought in by American companies. A genuine challenge—and one that helped bring Trump to power—is the uneven distribution of those benefits within the United States. But that will not be improved by blowing up the system, much less by bullying one U.S. company or imposing one impulsive tariff at a time.
Trump doesn’t see it or recognize it, nor does much of the U.S. public on either the left or the right—but America enjoys a new form of global dominance. If you are China, Japan, or the European Union, it is not very satisfactory being part of someone else’s movie. But America’s allies, including my country, Great Britain, go along with it because the experience of the last 70 years tells them the process is ultimately benign. Better to be part of a growing supply chain and try to use the system for their benefit than for there to be no system at all. Until now, much of the world has trusted the United States as a force for good. The country’s values of democracy, rule of law, and insistence on justice and humanity are celebrated in its movies, culture, and music. America may make huge mistakes, but in the end it has been on the side of good.
Economically, the World Trade Organization, from which Trump threatens to walk away, serves both U.S. and global interests because it is the mechanism by which the world system stays open. The balance of benefits both within the U.S. and between the U.S. and other nations remains a fair debate, but one that requires an overall WTO framework. The world accepts that the United Nations is based in New York and the International Monetary Fund and World Bank in Washington precisely because it knows that the United States is the indispensable capstone on which hangs the world order—diplomacy, finance, economics, trade, security. Some might chafe, China especially, from the astonishing potential force the possession of a worldwide system of military bases, fleets, nuclear missiles, and armies confers. But the majority of the world accepts it because the United States is trusted to use its power judiciously more often than not, and ultimately to underpin the global system from which we all benefit. One should not underestimate the vacuum that would result if the United States were to withdraw from its leadership role. Neither China nor Russia holding such power would be benign—nor benignly regarded.
Geopolitically, NATO complements the U.S.-led economic system, but more overtly. It is the vehicle that legitimizes U.S. military power. It deters Russia’s expansionist ambitions in either the Ukraine or Baltic republics. The Japanese-U.S. defense treaty plays the same role in Asia, legitimizing the U.S. system of bases in Asia and deterring China from territorial ambitions in Taiwan or the South China Sea.
Moreover, global concerns of common interest need some standing forum in which they can be discussed and joint action can be legitimized, acted upon, and then adjudicated impartially when there are disputes. It could be developing a common response to a noxious new virus like Zika or checking the growth of emissions of greenhouse gases to limit global warming. It could be ensuring that nuclear energy plants are built to common safety standards or that there are guidance systems and overflying rights for civilian aircraft anywhere in the globe. It is all but impossible to achieve such goals unilaterally or even bilaterally.
Over the decades, the United Nations has developed a family of agencies—the World Health Organization, successive climate change conventions, the International Atomic Energy Agency, and the International Civil Aviation Organization, to name just a few—to pursue common standards and goals. It is easy to dismiss the U.N. as ineffectual because of the scale of global problems it confronts, or because so many of its members are not democracies, or even because it includes nations that do not defer to the United States. Indeed, Trump has been quick to do so, declaring that it is not a “friend to democracy, to freedom—it’s not even a friend to the United States.” But for all its weaknesses, the U.N. is what is there. Trump may scorn it, but how would he replace it?
The entire U.N. system is only as strong as America’s committed participation. It was only when the United States signaled in 2015 that it was prepared, along with China, to commit to reducing greenhouse gas emissions that the way was opened to the extraordinary Paris Agreement, a deal to limit the growth of global temperatures to less than 2 degrees Celsius, with each country determining its contribution and finding the finance for developing more carbon-efficient energy sources. If Trump pulls out of the U.N. Convention on Climate Change, it will fall.
His disdain and insistence on bilateral deal-making similarly menaces the entire U.N. structure, from funding for the World Bank and the IMF to its capacity to act in the world’s hot spots. There is a global—and U.S.—interest in making this apparatus function. Without the United States, it will fragment. And the United States will find it far more difficult to deal with new menaces like ISIS if Trump tries to go it alone, or links up with dictators (such as Russia’s Vladimir Putin) who have a very different conception of national interest and global interest.
The United States has stood at the apex of a treaty framework for global peace and a multilateral framework for the governance of global issues—even if they are tilted for U.S. benefit. However imperfectly, it has worked.
IT IS THUS BEWILDERING that the president-elect labors under the illusion that the country is seen as weak, a victim that needs to thunder back and brutally assert its interests, as if they had been neglected. Strongmen like Putin with a vigorous portfolio of conservative views to which Trump is instinctively sympathetic—anti-Muslim, Russia first, anti–gay marriage—are not exemplars to be emulated, but dangers to an already fragile world order who need to be confronted and contained. There is not an array of one-sided deals to be done around the world in which the United States, newly unafraid to use its muscle under an America First president, can take all the prizes and leave nothing for its partners. This is the road to perdition, conflict, and economic stagnation.
A core Trumpian proposition, that U.S. military supremacy is under threat, is sheer hokum. American military spending outstrips that of the rest of the world combined by a comfortable margin. Its capacity to project military power is the most awesome the globe has witnessed. Its battlefield mastery of information and communication technology is light-years ahead of any adversary. Everybody—from China’s President Xi Jinping to North Korea’s Kim Jong-un—knows that you don’t tweak this tiger’s tail: It can and will bite back very hard. The assassination of Osama bin Laden—a technological marvel, whatever its contestable legality—is remembered by everyone.
This is a country that drives hard bargains, whether when selling its real estate to foreigners or when organizing trade deals. For example, the Transatlantic Trade and Investment Partnership (T-TIP), proposed by President Barack Obama—dismissed by Trump as a weak patsy—is regarded in Europe as an appalling attempted one-way exercise of U.S. power. U.S. negotiators have succeeded in insisting that Europe lower its environmental regulations to U.S. standards in the name of “regulatory convergence” and that it open up parts of its public sector to de facto privatization by U.S. multinationals (with their interests promoted and protected by Europeans courts), in return for not very much—a slight lowering of U.S. tariffs. What does Trump think he can achieve instead? For Europe to drop all ambitions to protect its environment and to give the United States unqualified access to its public and health services?
The America of the 1940s and 1950s has disappeared forever. Nothing is going to bring it back—not even trying to refashion the international trade system so that all plant closures are in any country but the United States and all the employment gains are at home.
TRUMP PLAYS WITH FIRE. The same forces that brought him to power in the United States are at work elsewhere. All around the globe, there are political forces that put the visceral forces of identity politics first, that want to insist that in some form their culture, their race, their being-ness, their blood contract with generations past and future is under threat from the current global system. It could be Marine Le Pen in France, leader of the right-wing National Front and a genuine contender for the French presidency in 2017, thundering about the uniqueness of La France and the need to exit the EU, or Indian Prime Minister Narendra Modi insisting on the unique and sacred traditions of the Hindu. Everywhere, peoples and electorates that are suffering stagnating real incomes and growing inequality feel they are victims of how the world order is structured. They want leaders who put them first. When Italian Prime Minister Matteo Renzi lost the referendum on constitutional reform in early December, Matteo Salvini, leader of the right-wing Northern Leagues (who want Italy to leave the euro and even the EU), heaped praise on his three heroes—Putin, Trump, and Le Pen—who challenge the global political establishment’s attempts at multilateral cooperation.
It is this same detestation of the liberal global system that has helped fuel Islamist terrorism. The culture and attitudes that have underpinned the global institutional framework, and its readiness to accept the asymmetry of the global bargain with the United States, are everywhere fraying. What the world needs desperately—and what Obama, under such heavy fire from the Republican right, provided—is for the United States not to attempt to play the same dark game. The anchor country has to anchor the system, and reform the system where reform is needed. Instead, the United States now threatens to destroy it.
The open question is how much of Trump’s embrace of strongmen and his America-first, bomb-the-shit-out-of-troublesome-enemies approach will survive into office. In his 1987 book, he argues that the great deal-maker looks after the downside, and then uses all the leverage available to maximize the upside. The hope, perhaps wishful, is that when it comes to defense and security issues, Trump will be much more cautious than his campaign rhetoric suggests. The downsides are very obvious, as hard analysis by the U.S. defense and security establishment will make clear. What’s not clear is whether Trump will listen.
Trump may talk about befriending Putin, but he won’t want to watch TV pictures of Russian tanks rolling into Ukraine’s Kiev or the Baltic republics. He may get the Europeans to harden their promises to increase their defense budgets, but if he were to go beyond that and undermine NATO by qualifying the U.S. commitment unless everyone pays up, the downside is just too great. Nor will he or Defense Secretary–designate James Mattis pull the plug on the successful offensive against ISIS in Iraq. Trump will only let the United States get sucked into the maelstrom of the Middle East if he is confident of success: Dealmakers avoid failures. Nonetheless, world history is replete with catastrophic miscalculations, and the risk is that colossal misjudgments will be made, in particular with China, even as the whole international order becomes disordered.
MY READING IS THAT TRUMP will first be tempted by what seems to be the soft option of trade, where the downsides of unilateral action appear very limited and the upsides (if you are blind to risk) are apparently enormous. After all, this is what his “movement” wanted above anything else. No more plants moving abroad. No more closures because of cheap imports. No more sales of great companies to foreigners. No more stagnating blue-collar wages. No more illegal immigration. It may be that there are jobs and great prospects aplenty, driven by global trade, in the burgeoning tech and service sectors of big U.S. cities (which in any case vote Democrat), but those in his “movement” don’t care. They are hurting and nobody has taken decisive action to help them. Whatever else, Trump intends to change that. It is where his presidency can and will be decisively different.
But the risks are immense and the ensuing rupture will be a paradigm shift. For 70 years, the open rules–based global trading system has been the quintessential expression of the international framework underwritten by the United States (and Great Britain). The two countries have spearheaded successive rounds of tariff cuts and multilateral trade deals and stood by the General Agreement on Tariffs and Trade and its successor, the WTO. They have cut regional trade bargains, jointly promoted the European single market with the U.K. joining the EU and, above all, kept their markets open.
Trade is not fashionable to defend on either the right or the left these days, but it has brought huge national and international benefits, including an avalanche of inward direct investment for both the United States and the U.K., powerful international financial and business-service sectors, rising global living standards, and the economic and democratic transformation of Asia. True, China and Germany have, with their well-developed export sectors, over decades taken advantage of the system to run structural trade surpluses and have refused to accept that they are imperiling the system. But solve that within the rules—it is no reason to blow the whole framework up.
What is wrong with NAFTA, for example, is not the trade it promotes: It is that it has been unaccompanied by any policy to support U.S. wages, U.S. trade unions, or U.S. jobs. Policymakers at the state and federal levels have for too long not acted in any concerted way to spread the benefits of globalization.
Decades of consistent manufacturing trade deficits have exacted a cruel toll, and it has been voters at the receiving end who swung the election for Trump, even though he lost the overall popular vote by two million against a blemished candidate. After all, it was Pennsylvania, Michigan, and Wisconsin, with their tiny 100,000-vote margin, that gave Trump the Electoral College votes for victory. He might be a billionaire, but he styles himself a “blue-collar billionaire.” Blue-collar (post-)industrial workers don’t benefit from free trade and immigration, as he has consistently said for 18 months, challenging the Republican mainstream, who remain free-traders. Now he intends to deliver. His flight to Indiana to stop Carrier from moving some 800 jobs to Mexico—for a cool $7 million—days before we learned that unemployment has fallen to its lowest level in ten years is a harbinger of the self-defeating priorities that lie ahead.
Deporting undocumented immigrants and building the wall on the Mexican border—in effect an extension of what Obama was already doing—will be of symbolic importance. But it is destroying rather than refining the world’s trade arrangements, and thus violently disrupting the associated flows of goods and finance, where the impact could be the most destructive and far-reaching. The Trans-Pacific Partnership (TPP) is already dead. Thirty-five percent tariffs are promised on Mexican imports, in violation of WTO rules. The remaining 20 trade agreements the United States has signed are to be reviewed or abrogated. Cumulatively, the impact will be devastating, killing multilateralism by exposing the already enfeebled WTO as helpless, inciting Chinese and Mexican trade retaliation, and destabilizing the entire global system of trade and finance.
THE MOST PROFOUND RISK of economic warfare is with China. Beijing is to be named a currency violator within Trump’s first 100 days in office, allowing the unilateral imposition of across-the-board tariffs of up to 45 percent. In Trump’s eyes, China is a threatening behemoth that has grown into a threatening superpower by manipulating the system. It needs to be confronted to mend its ways, beginning with tariffs. The truth is much more complicated.
The United States cannot wish China away, nor can it wish China to stay poor. It surely wants a collaborative rather than a competitive relationship, and it also wants to support China’s transition from a communist one-party state to a multi-party democracy that supports the rule of law at home and abroad. China, despite its phenomenal economic development, remains beset by contradictions. The ruling Communist Party is losing legitimacy. Corruption is rife. Although enormously ambitious, Chinese capitalism is hobbled by the intrusion of the party into every nook and cranny of Chinese life. The government, unable to raise taxes for fear of backlash, spends and becomes ever more indebted. Chinese debt-to-GDP ratios are similar to those in Britain and Japan before their financial systems collapsed: Chinese banks carry vast loan impairments that if ever accurately accounted would bankrupt them. The whole apparatus is set at best for a root and branch overhaul and at worst for an implosion.
U.S. policy to date has been wise: patient containment, and not allowing China to win a propaganda war over soft power but instead waiting for weaknesses to manifest themselves. What the United States should not do is provide a cartoon enemy for the Chinese government, giving China an excuse for bellicose behavior in Asia, or, more subtly, allow China to define itself as one of the good guys in trade and climate change.
Trump is walking straight into the trap. The TPP was only a limited counterweight to China’s trade leadership in the Pacific; now China has even freer rein. By threatening not to honor the United States’ signature to the Paris climate change accord, he allows China to position itself as the friend of the planet. By labeling China a currency manipulator and unilaterally raising tariffs, he damages U.S. users of Chinese products, undermines the legal framework for trade, and offers China the enemy it needs to unite behind.
The policies also set in motion a dangerous dynamic. There is an element in the Chinese government that believes the country is encircled by U.S. military power. Suppose China invaded Taiwan, or demanded concessions that Taiwan could not make? Taiwan is in China’s sphere of influence, as Crimea was in Russia’s. How would Trump react? With a nuclear attack? A wise president would never get his country into such a situation. But Trump is anything but wise.
The same dynamic operates in Europe. The U.S. interest is to keep the EU together and to support NATO. Being the inspiration for those ultra-right-wing nativist forces, growing in support across the continent, that want to break up the EU and befriend Putin is not wise politics. If the hegemonic power insists that it is not interested in multilateral governance but rather in a series of one-sided trade bargains, nationalist and populist movements in the EU—as around the rest of the globe—will take their cue from the United States. Germany still wants to rally behind an open EU, but France under a President François Fillon or a President Le Pen will want to play the same game as Trump. So will the countries in Eastern Europe. Putin’s Russia will exploit whatever openings are available to cement greater Russia. The EU’s disintegration, with incalculable consequences for the euro, global trade, and finance, is not impossible. It is truly bizarre that the big winner of Trump’s nationalist victory could be Putin.
There was an emergent global society, albeit with its dark side of left-behind communities and bitter inequalities. Their grievances could and should have been addressed. Instead, Trump—if we are to believe what he says—is set to lead the world into trade war, stagnation, growing nationalism, an upending of 70 years of the trans-Atlantic alliance, and perhaps even military conflict. This is an election that could change the world.
