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28 February 2017, Gateway House

Trump: overturning the status quo

President Trump has moved to deliver on his campaign promises with rare alacrity: his executive actions cover everything from policies on trade and energy to bringing back manufacturing to America. But he has also been walked back on some of his explosive assertions while ambiguity looms large over several issues

Director, Gateway House

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The world is at a critical juncture as the structure of global power has begun to transform–and, for the first time in recent history–without the compulsions of a cataclysmic war. This realignment is an unwitting recognition of the global economic tilt towards Asia that has been in motion for the last 30 years.

The beginning of the end of the transatlantic alliance is a matter of grave concern for Europe, but a moment of opportunity for former colonies like India. At the fulcrum of this shift is President Trump, who has moved rapidly in the early days of his administration through executive orders on implementing his campaign promises, such as pulling out of the Trans-Pacific Partnership and increasing the budget for defense.

The second unusual factor is the unprecedented and open hostility between Trump and the mainstream American media to the extent that he has called it the ‘enemy of the people.’ The consequence is that the media tends to amplify the numerous missteps of the administration, such as the travel ban imposed on seven Muslim majority governments (since disallowed by the courts). It also seems to minimise the positive impact of some measures, such as the ethics guidelines aiming to restrict rampant lobbying malpractices.

Trump has acted rapidly to put in place his proposed energy policy of opposition to the voluntary targets accepted by the Obama administration while reopening exploration in Alaska, reviving the Keystone pipeline project, reducing restrictions on industrial and automobile emissions, and promoting the use of coal.

As for bringing back manufacturing to America, this was set in motion even before he was sworn into office, with Ford, Fiat-Chrysler, and Carrier agreeing to relocate projects from Mexico to the U.S. The proposed reduction in corporate taxation from 35% to 20% along with rescinding environmental safeguards is already making the country attractive to foreign and domestic investors. But even more significant will be the passage of the Border Tax Bill, which proposes to change corporate tax from being based on profits earned from where operations are located to one where products are sold. That will lead American multinational corporations to review their business plans with cascading global implications.

The advances Trump has made over the past weeks have been matched by some backtracking too. Many of his most explosive proclamations on sensitive security issues have been flatly contradicted by members of his administration on several occasions. This applies to Trump’s dismissal of the North Atlantic Treaty Organization (NATO) as obsolete and unfit to address terrorism, which has been overtaken by his Vice President, Mike Pence, and Secretary of Defense James Mattis, who reassured NATO allies at the recent Munich Security Summit of the U.S.’s unshakable support.

Similarly, Trump’s ardent support of Brexit and prediction of the breakup of the European Union (EU) was overridden by his Vice President, who claimed that the U.S. fully supported European unity.

However, it will take more than statements papering over the fissures created by Trump’s pronouncements to reassure a jittery Europe, still confronting the endless crisis of the euro in Greece, the dark cloud hanging over banks in Italy, anemic growth in France and Germany, Brexit and the rise of anti-EU right wing parties in all the major members of the union.

The Trump administration has also rolled back his earlier rhetoric on removing the security guarantees extended to Japan and South Korea unless both countries paid more of the expenses, following interactions with Japanese PM Abe and Defence Secretary Mattis’s visit to South Korea. However, ambiguity remains over Trump’s earlier indifference to Japan and South Korea developing their own nuclear weapons programmes.

Trump’s phone diplomacy has itself caused some flip-flops. After disregarding the One China policy by engaging in a phone conversation with the president of Taiwan shortly after assuming office, Trump reverted to honouring it after a phone conversation with Chinese President Xi. This does not, of course, indicate a significant reduction in U.S.-China hostility as Trump still alleges that China indulges in currency manipulation.

Yet, an overarching uncertainty looms over some important issues.

Most controversially, there is a bitter tussle under way between Trump and the Washington foreign policy administration over relations with Russia. While Trump has consistently sought a joint effort between the U.S. and Russia in Syria to defeat the ISIS and reach an agreement to reduce active nuclear warheads, even Republican members of Congress and members of his own administration are hostile towards Putin.

Apart from his admiration for Putin as a strong leader, Trump cannot risk accepting the allegations of Russian cyber involvement without discrediting his electoral victory–the very reason why the Democrats are so insistent on it. The tragic outcome of this is that Trump begins his term at odds with his own intelligence agencies. This puts a huge question mark over whether he can indeed improve relations with Russia.

As for Israel, Trump had promised during the campaign to shift the American embassy to Jerusalem, and at a recent press conference with Israeli Prime Minister Netanyahu, claimed that he could live with either a one-state—or two-state—solution, dismantling decades of western foreign policy. Yet again Trump’s ambassador to the United Nations, Nikki Haley, has contradicted her President,  asserting in the United Nations Security Council (UNSC) that America was committed to a peaceful two-state solution to the Israel-Palestine conflict, leaving U.S. allies in the region confused and nervous in the world’s currently most unstable region.

Lastly, Trump’s first National Security Adviser, Michael Flynn, put Iran on ‘notice’ after it conducted a missile test shortly before he resigned. The implications of being placed on the notice list are yet to be revealed. Nor is there more clarity on Trump’s campaign threats to reject the nuclear deal negotiated with Iran by the P5 members of the UNSC, plus Germany.

There are other issues with domestic and foreign implications that Trump had spoken of, but has yet to act upon, such as, building a wall on the U.S.-Mexico border, repealing the Affordable Healthcare Act, and a new travel ban, adding to concerns of there being major upheavals ahead.

The most profound outcome that has begun to emerge out of the broad uncertainty created by Trump’s intent to change the thrust of U.S. policy-–domestic and foreign–is the fracturing of western unity. This is the opening that emerging powers must take advantage of to change the present structures that have sustained the West’s privileged position since World War II.

While there has hardly been any commentary on India or South Asia, the impact of policies relating to change in taxation mechanisms, immigration policies, such as the revision of the H-1B Visa norms, and commitment to security alliances in the Asia-Pacific, will be felt at home as well. More clarity will come only after Prime Minister Modi meets President Trump.

Neelam Deo is Co-founder and Director, Gateway House: Indian Council on Global Relations, Mumbai and is a former Indian Ambassador.

This article was exclusively written for Gateway House: Indian Council on Global Relations. You can read more exclusive content here.

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