Sunday, February 25, 2024 | 05:13 WIB

Geopolitics and economics if Trump becomes President

Jakarta, IO – I mentioned before that certain pundits, such as Financial Times Editor Gillian Tett, and former Advisor to President Obama David Axelrod, wrote ‘Do not discount the chance for a Trump second term’ and ‘that President Biden should reconsider his bid for re-election, due to his age’ Those, plus polling that confirms 70 percent of GOP voters do believe Trump’s lies about the 2020 election results, as well as a weakening approval rating for President Biden, and a possible renegade like Senator Joe Manchin of West Virginia who wants to run as a third-party candidate – which for sure will take away votes from Biden. 

God forbid, yet we should still consider the possibility of a second Donald Trump Presidency and how geopolitics and economics might look. Even if we do not want it, who knows? Marti Wolf, in his op-ed on this matter, reminded us that the US in 1919 withdrew from the Versailles Agreements, and let the leadership of the UK and France, neither of whom possessed the ability or the will to carry on with them. This went on till the Second World War when the US took the leadership back, long after, which basically led to the current situation. 

In a Trump Presidency, all this would change. He would change the bureaucracy from those abiding by the rules of law to his loyalists, who would run the Federal Government, FBI and other offices. Martin Wolf went as far as saying that the President would act like the President of Hungary Victor Urban, or Tayyip Erdogan of Turkey. Scary, isn’t it? He wrote that following President Nixon, he would take President Putin to his side to compete against President Xi Jinping. 

What about economics? President Trump would erect tariffs of 10 percent on imports from China and other countries, that would be easily retaliated for. A “Beggar thy neighbor” policy would be his trade policy. As every country has learned, this trade policy is doomed to fail for sure. But President Trump would not give a damn. A similar policy would be on immigration, as all of them have been the tenets of Make America Great Again or MAGA, with President Trump as the Cult Leader. 

J. Soedradjad Djiwandono
J. Soedradjad Djiwandono. Emeritus Professor of Economics, FEBUI, Jakarta, and Adjunct Professor of International Economics, S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore.

If the above scenario becomes a reality, God forbid, I do not know how geopolitics and economics would really shape up, very unimaginable is all I could say. Yet if the trend which seems to be forming so far continues, this is not an impossibility. We could only hope that these events would not come to pass, but more normal things would develop instead: the US and its people keep sane and believe in common sense, and all the above would remain a bad dream. 

As for the economy, people must remember the result of the Smooth-Haley Tariff Act, which raised import tariffs on over 20,000 commodities coming into the US. This was immediately retaliated at by Canada and other US trading partners. The Tariff-war or “Beggar thy neighbor” policy did not work, except to stunt the economic growth rate for all countries, causing unemployment that ultimately turned into the 1930s Great Depression. This went on till the Second World War, when the economy of countries started to rise again, on a war footing. 

For sure the WTO will not allow this to happen at this time, since it is not difficult to see the terrible effects of a tariff war. 

Read: Constitutional Court’s Age Decision Favors The Young

In politics, it is not clear whether President Putin would accept President Trump’s invitation to work together to compete against China. President Xi Jinping also would not stay quiet; despite so many failures, his BRI Programs have also shown results that must solidify China with its allies, maybe including Russia. Should this scenario become a reality, we do not know how the balance of power would swing, as Professor Graham Allison posited in his book “Destined for War”: the Thucydides Trap could result in war or the reverse, a different configuration of alliances. 

Regarding the contagious issue of Taiwan, the US intelligence experts seemed to believe that China is not interested in invading Taiwan, since this will not be to their benefit.

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