It is hard to believe, but the betting market has one clear US presidential candidate: Donald Trump.
Just a few months ago, the Democrats and their presidential nominee, Kamala Harris were riding on a wave of enthusiasm. Their elder statesman, Joe Biden had just stepped aside. Within a few days, Kamala Harris took the reins and sped out of her starting blocks. She re-invented herself. She looked more confident, argued more assured and got endorsed by almost everyone (it seemed) . Kamala wasted no time and raised more money for her presidential campaign than Donald Trump did. She mobilized a grassroots movement that spread her message of hope and opportunity across the country. She surged in opinion polls, and the presidential elections were hers to win.
Donald Trump’s campaign spluttered. There were two assignation attempts on him, yet he struggled to stay in the news headlines. But then came two hurricanes and he knew how to take advantage of the chaotic aftermath. With misleading statements, false information and deepfake videos in his tailwind, he just sailed past Kamala Harris.
Why would a next Trump presidency be such a concern?
For one, Donald Trump is not in politics because he has deep-rooted fundamental political beliefs. He doesn’t care to protect the freedom of speech, enshrine human rights or defend the liberal freedom of democracies. Infact he would be hard pressed to explain what they mean.
Donald Trump is only concerned about one thing: Power. He will cosy up to autocrats if it makes him look powerful. He will bash businesses if that makes his supporters admire him. He will even break long standing alliances if it strokes his ego.
Therefore, the policies of his administration won’t be developed by him, but rather by those surrounding him. During his first presidency, the republican party made sure that he is (mostly) surrounded by grounded leaders, like generals or veterans of industry. They could slow-walk any braindead programs and advance more reasonable conservative policies. They had more measured approaches and even compromised when needed. This however is not good enough for the Alt-Right movement, which is the backbone of Trumps support. Just to make sure it doesn’t happen again; they spent 4 years preparing for the next presidency. For a glimpse into their thinking, just read through their “project 25” memorandum.
Secondly, Donald Trumps economic understanding is limited, as is his maths. One of the few policies that he is trumpeting aloud is that he wants to impose tariffs on almost everything. The levels of tariffs are arbitrary. The higher the better. However, it will be the US consumer who will have to pay for the additional tax. Trumps reasoning is that all products sold in the USA should be produced in the USA. This only demonstrates his lack of economic understanding.
The USA makes up about 25% of the worlds GDP. Simplistically that means, on average, the US also consumes 25% of all products. Some exports might sell more to America, some less. If the USA only makes up 5% or 10% of your companies’ turnover, you would be less inclined to build a factory in the USA just to capture that market. You would probably spend increased focus on fast growing countries like India. If however, the USA makes up a big slice of your turnover, you would want to heed Trumps dictate and open up a factory in America. Finding workers in an environment with a 4% unemployment rate will be very hard though, unless you pay up. Both scenarios will lead to inflation, which will lead to higher interest rates and once again, it is the US consumer who suffers the most of Trump’s policies.
Thirdly, other autocrats will take advantage of an inward-looking USA. They will stroke Trumps ego with a few small wins for Trump (like ending the war in Ukraine – on Putin’s terms though), but they will take the opportunity of disarray in the West to strike at more target. Putin could invade Moldavia, maybe Georgia possibly Lithuania. China will strike at Taiwan and North Korea might make a more concerted effort to harass South Korea. And what happens in Africa is simply irrelevant to Trumps team.
Under Trump, the USA will neglect its responsibilities as the world superpower and ignore its duties as the leader of the free world. Democracies will seem to be chaotic systems, in stark contrast with the highly regulated but severely curtailed autocratic systems.