He means it. The President of the United States of America Donald Trump says he will use the power of his office to tear up the post-WWII international and domestic settlements. No more world policeman, spending blood and treasure to protect nations that won't defend themselves. No more nation-building. No more hapless victim of a trading order that disadvantages American workers. No more stunting growth with confiscatory taxes and miles of red tape. No more allowing concern for the environment to outweigh the need to beef up our infrastructure and create jobs. This is to be a new post-globalized world order in which he will put America First.
And now, not tomorrow. In the past few days the president has cleared the way for construction of the Dakota Access and the Keystone XL pipelines, the latter a project to bring Canadian oil to the U.S. from Canada, and one that President Obama vetoed despite its approval by his own Hillary Clinton-led State Department. He has given his Commerce Department 180 days to develop a plan to ensure that the pipelines are built with made-in-America steel. He has told agents at the Department of Homeland Security that they are to enforce the law against illegal immigrants, starting with the deportation of criminals, and to join him in planning construction of "the beautiful wall" on our southern border. He has begun the unravelling of Obamacare. He has met with a few gaggles of CEOs, separately with those from the auto industry, and with heads of trade unions, the latter a group until now bound to the Democratic party with hoops of steel. He has fired the opening shot in a war to keep terrorists from entering the country. And more.
Some of these moves are of more symbolic than practical consequence. But the whole is greater than the sum of the parts: taken together, they make attending to every jot and tittle of Trump declarations and tweets a waste of time. We are on the road to a new world order. Some in the establishment are weeping; others are silently gnashing their teeth in frustration; still others are loudly predicting the end of the world as they have known it. Those predictions are on the way to becoming reality. The problem is that the remembrance of things that are about to be past is not entirely accurate. The world we are to view in the rear view mirror was not exactly one of free trade, open markets, and market-determined currency values.
The order Trump is about to inter saw America spending 3.3 percent of GDP on defense and the fight against terrorism, while Germany, a rich country, spent 1.2 percent. And Germany's powerful export machine benefitting from the euro, a currency so undervalued that German exporters have nightmares about the end of the EU and the euro's replacement by a soaring deutsche mark that would make it a lot tougher for them to compete in world markets.
It saw China manipulating its currency, stealing American intellectual property, subsidizing the export of cheap steel, and ordering its state-owned-enterprises to buy only software developed in China. It saw French farmers protected from imports from far-more efficient American farmers, and Japan running a $60 billion trade surplus with America, largely due to its sales here of autos, while it is difficult to get an American-made vehicle past Japanese inspectors.
Yes, the president's threat that companies that build factories overseas will face "yooge" tariffs if they attempt to import the stuff produced in those factories is a kind of interventionism that threatens to turn America into a country in which a man unfamiliar with the products that are dominating a digital world is picking winners and losers. But the question is not whether that intervention is good for America. It isn't. The question is whether what comes with it in the same package makes the total package good for America. That package includes or likely will include lower corporate and personal taxes, the former the highest nominal rates in the industrialized world, taxation of earnings where the products are sold, ending tax avoidance by major internationals that stash their intellectual property in low-tax jurisdictions such as Ireland and Bermuda and siphon profits off to those jurisdictions, removal of regulations that force auto makers to produce small cars consumers don't want in order to keep average fuel efficiency at levels set by green bureaucrats, reducing health care costs that stifle the ability of small businesses to take on new workers, reducing restrictions on drilling for oil and gas, and quicker permitting of allegedly job-creating energy infrastructure projects such as the Keystone and Dakota Access pipelines, allowing oil to flow more cheaply and safely.
In short, Trump's unseemly bullying of corporate executives, and his lesser concern for the environment should be seen as the cost of gaining a tax- and regulation-light business environment that is more likely to produce rapid economic growth. The markets are betting that the benefit of lower taxes and less regulation will offset the annoyances and forced adjustments businesses will have to make to accommodate the intervener-in chief. For those who have benefitted from the existing world and domestic orders, the costs exceed the benefits; for Trump's constituents, it's quite the other way around.
For Europeans who have cowered under the American nuclear umbrella and are now calling on America to deploy troops along Russia's borders, this change of direction is indeed unnerving, especially for Germany. Trump has said, "You look at the European Union and it's Germany. Basically a vehicle for Germany. That's why I thought the U.K. was so smart in getting out." To which Merkel's advisors respond that they have given up hoping that Trump will behave in a statesman-like manner, "The Americans, and the world, will get the Trump they elected." Indeed. It's called democracy.
Germany might suffer, but Britain will benefit. Prime Minister Theresa May was pushing on an open door when she used her visit here to reinvigorate the special relationship, and walk away with the bargaining chip of a probable U.K.-U.S trade deal. That relationship could become super-special if Her Majesty would include in the dinner invitation May conveyed a round of golf on her nine-hole course on the Windsor Castle estate, perhaps partnered with Prince Andrew, an avid golfer. Were that to occur, Andrew should remember that The Donald hates to lose even more than he loves to win.
Whether the new president can overturn the old order remains to be seen. He will have to overcome the opposition of the mainstream media and, in many cases, congressional Republicans—the crowd that assured everyone that Trump could not be nominated and certainly not be elected.