Donald Trump has emerged as the leading Republican candidate in this year's U.S. presidential election for all the wrong reasons: he has not been embraced by the party itself, but worse still the blistering personal attack by 2012 presidential election's failed candidate, Mitt Romney, was unprecedented; equally unprecedented has been a spate of calls across Great Britain to ban him from entering the country; and though Trump's campaign has mesmerised a cross-section of the conservative electorate, another cross-section has been directly demeaned by Trump's Ku Klux Klan dalliance, drubbing of Hispanics as "criminals," reference to CNN's Megan Kelly in particular, but women in general, as a "bimbo," and insensitive "go back to Africa" response if "black lives matter." Much water will flow between now and the July Republican convention, and then between July and the November polls, to keep analysts busy.
Obscured in the brouhaha is his platform, particularly his political economy, that too, at a sensitive moment. Sketching it necessitates dispensing some obvious issues. For a start, Trump becoming a billionaire businessman does not help: he has had as many failures as successes, and has profited from such stealthy business tactics as hiring undocumented workers that he virulently vows in this campaigns to halt completely. Turning to his campaign, though, four policy issues beg attention: undocumented workers, Mexico, and Mexico-related issues, all encapsulated in revitalising the border-wall; position on the Trans-Pacific Partnership (TPP); relations with China; and making U.S. corporations return back home with their investments as part of making the United States "great again." They hoist a red flag.
Turning to the first issue, the border issue may be more of a blunted thorn now than ever before; but elevating it threatens to unhinge the huge U.S. economic investments in Mexico and the services the United States critically needs from farmworkers and housekeepers.
Demographically, Mexico cannot supply the United States with workers for much longer: not only has the growth rate of Mexico's population fallen below the replacement rate at a time of rising per capita income, but in recent years we often find more Mexicans returning home from, than going to, the United States. President Barack Obama's deportation policy may have been more a deterrent than border walls, but the many migrants crossing the U.S. border from Mexico increasingly represent Central and South America, if not Africa or Asia. Blaming the third-largest U.S. trading partner with which more than one-billion-dollar-worth of transactions occurs every single day is not the policy of a businessman, and is likely to critically hurt U.S. investors in a country where every item, from the corn to make tacos with, the movies that draw crowds, the sports they play, the cars they drive, and the post-graduate degrees their students seek have a "U.S.A." trademark. Mexico, of course, will not pay the billions Trump insists he will get from that country to build that wall, just as his cocaine-flow concern will not be halted by the wall when the crisis is more demand-sided than supply-sided. Automobile manufacturers in Detroit, too, would become the first victims of any further Mexico-based border restrictions.
Secondly, very much like Hillary Clinton, Trump opposes the Trans-Pacific Partnership. As the first face of Obama's 2012 "Asian pivot" policy approach, Clinton has a deep TPP association, making her volte-face smell more of political opportunism, given the election, than substantive differences; Trump's complete ignorance about the details may be the greater evil, certainly the larger insult to Asian partners. He calls it a "nefarious plot" to let China in, by "the back door," all reflecting the president's "insanity." Anyone who knows anything about the TPP story also knows it aims at cornering China into reforming its policies. For those keeping count, TPP can also be traced back to the 1989 Washington Consensus, acquiring an unquestionable bipartisan trait ever since. It was implicit in the 1989 Enterprise of the Americas and the 1994 North American Free Trade Agreement (NAFTA) with Mexico of George H.W. Bush, and also the 1994 Summit of the Americas by which President Bill Clinton extended it to Latin America. George W. Bush's competitive liberalism policy approach took the NAFTA magic to Africa and Asia, while Obama's Asian pivot demonstrated a long streak of transparency overriding any controversial intentions. Trump has offered no tangible alternative.
The third point, Trump's position on China is even more dumbfounding. It acknowledges the need for a policy approach against the world's second largest economy, but in the way that it disconnects with the Washington Consensus, neo-liberalism, even any other bilateral trade relationship, creates an authoritarian alternative of closing shop and squelching corporate mobility, particularly when multinationals are doing much to compensate for U.S. trade deficits.
China is the home of $66.77 billion of the $4.92 trillion the United States has invested abroad until 2014, a figure that was only $11.14 billion at the turn of this century, indicating how significant that growth rate has been for the United States. Since it is the country that owns more U.S. debt than any other ($1.2 trillion out of the $4.5 trillion that all foreign governments hold), rue the day China demands payback. Without the $120.8 billion U.S. exports to China in 2014, indeed if that figure had not doubled from the 2007 figure when the recession broke out, the U.S. economy would have been in more of a dire straits today than its wobbly position now. Indeed, trade with China has helped the 3.7 per cent U.S. growth rate to be twice as high as across West Europe and four times as high as Japan's. Without doing one's homework, no finger-clicking or electoral oration will change ground forces as steep as these.
Finally, Trump's noble goal of making the U.S. great again relies, in part, on getting U.S. corporations to return home for their production. Even with a minimum wage ranging from $5.50 in Georgia to $10 in California and Massachusetts, very few corporations would be attracted to divert production here if there are profits to be made abroad: they have made huge investments, see huge emerging markets, operate from both the United States (for research and development, R/D), and a foreign country (for low-wage production). This is a routine business division-of-operations that escapes Trump's conception. It would lead other countries to retaliate, multilateral and international organisations to cry foul against U.S. treaty violations, and leave all sides less well-off than they already are.
Adding the pieces, we see (a) nationalism being driven at a time of irreversible globalisation; (b) the umbilical cord of the IT (information technologies) revolution being severed; and (c) the United States returning to where it was before World War II: an isolated country, only this time in a more integrated global setting and with too many frontier or emerging markets to fear the same disastrous consequences of global anarchy. Other countries will step in for every missing U.S. blank, leaving the United States as the sorest of losers.
It is a dangerous forecast, summoning comparisons with Adolf Hitler and Kim Jong-un. Though hyperbolic, those comparisons nonetheless depict Trump's choices very clearly for the remainder of 2016: join either these "axis of evil," for the lack of a more appropriate phrase, or the more forgiving yet progressing rest-of-the-world.
Dr Imtiaz A Hussain is Professor, International Relations, formerly Universidad Iberoamericana, Mexico City.
inv198@hotmail.com
The political economy of Donald Trump: The spectre of isolationism
Imtiaz A. Hussain concluding his two-part article on Donald Trump phenomenon | Published: March 10, 2016 00:00:00 | Updated: February 01, 2018 00:00:00
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