Martin Wolf: Trump dismantling democratic world the US made

President at war with reality is further undermining moribund and divided West

On peace, the question remains whether Donald Trump’s instinct for conflict can be contained.
On peace, the question remains whether Donald Trump’s instinct for conflict can be contained.

Donald Trump has been president of the United States for just over four months. It is still impossible to predict what his presidency will mean. But it is already a transformative event: Mr Trump has revolutionised our ideas of what the US stands for. We live in the world the US made. Now it is unmaking it. We cannot ignore that grim reality.

Mr Trump’s domestic programme is in accord with the agenda of the Republican party. Its aim is to cut taxes on the rich by lowering spending on the poor.

The Congressional Budget Office’s analysis of the American Health Care Act, recently passed by the House of Representatives and the replacement of Barack Obama’s Affordable Care Act, is startling. Over the 2017-2026 period, the act would reduce tax revenue by $992 billion, paid for by a $1.1 trillion reduction in expenditures on Medicaid and other subsidies. According to the CBO, the number of uninsured might have increased by 23 million by 2026.

Proposals for tax reform and spending go in the same direction. Discretionary spending proposals for next year include a $52 billion increase in defence spending, paid for by big cuts in other areas. These include a $13 billion (16 per cent) cut to health and human services; $12 billion (29 per cent) to the budgets of the state department and the international development agency; and $9 billion (14 per cent) to education. The diplomatic capacity of the US would be devastated.

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Economic war

Hard power and lower taxes: these are the US priorities under Mr Trump. They are also traditionally Republican. Waging what amounts to an economic war on one’s supporters might seem perverse. But there is method in the madness. As the programmes poor whites depend upon are slashed, those who voted for Mr Trump will become more desperate. This will make politics even more polarised. That has been the all-too successful ploy of pluto-populism.

So what is new at home? The answer is Mr Trump’s personality. He is in a permanent war with reality and so with the media and his intelligence services. The press and the bureaucracy have both held up well. So has the legal system. But these are early days. The president is undisciplined and his administration chaotic. Under Mr Trump, a terrorist outrage might produce a lurch into authoritarianism.

Mr Trump's impact on the very idea of the West is already significant. The western alliance is still the world's biggest economic bloc and largest repository of scientific and business knowledge. But it is disintegrating. As Angela Merkel, chancellor of Germany, admitted, Europe can no longer rely on the US. It might have been unwise to say so, but she was surely right.

Mr Trump seems to prefer autocrats to today's western Europeans. He is warm towards Turkey's Recep Tayyip Erdogan and Rodrigo Duterte of the Philippines, not to mention Russia's Vladimir Putin. He appears to care not at all about democracy or human rights. Neither does he seem committed to the mutual defence principles of Nato.

Mr Trump’s “alt-right” supporters see not a divide between the democracies and the despotisms; but rather between social progressives and globalists, whom they despise, and social traditionalists and nationalists, whom they support. For them, western Europeans are on the wrong side: they are enemies, not friends.

Deep down, Mr Trump might agree. He is surrounded by orthodox advisers, such as James Mattis, defence secretary. Yet the president's heart seems not to be in it. The West may not be dead. But as a set of countries with shared interests and values, it is moribund.

Now consider the West and, above all, the US in the world. The rise of China has reduced its economic and political weight. A recent history of failed wars and financial crises has savaged its leaders’ credibility.

The choice of Mr Trump, a man so signally lacking in the virtues, abilities, knowledge and experience to be expected of a president, has further damaged the attractions of the democratic system.

Now the West seems deeply divided internally too. Across the world, people question the future role of the US. Would it not be wiser, they wonder, to move closer to China?

Mr Trump would not appear to mind if this did happen. He voluntarily withdrew the US from the Trans-Pacific Partnership, aimed at being an alternative to Chinese leadership. Under him, the US seems to be abandoning the notion of soft power. Indeed, the proposed budget tells us that the administration sees the idea as largely empty: guns matter, diplomacy does not.

The soft power of democracy is not what it was. It has produced Mr Trump as leader of the world’s most important country. It is not an advertisement.

Three big challenges

Yet much is at stake in the world. Three big challenges exist: prosperity, peace and protection of the commons.

On the first, Mr Trump’s administration is still tempted by the idea of restricting imports – or at least by bilateralism. So far its protectionist bark seems worse than its bite. Nevertheless, globalisation is stalled. Without US support it could well remain so.

On peace, the question remains whether Mr Trump’s instinct for conflict can be contained. The biggest challenge is the relationship with China. Mr Trump seems to thinks he can do business with Xi Jinping, China’s president. Maybe he likes the autocracy.

Perhaps the most depressing consequence of Mr Trump’s ascent to power emerged at the G7 meeting in Taormina, Sicily, at the weekend. The Paris climate change agreement of December 2015 was not an answer to the challenge, but it was at least a recognition that climate change is a real and pressing danger. Now may well be the last chance to head off the worst of it.

In agreement with many Republicans, Mr Trump refuses to recognise the threat. He finds it impossible to admit that strong and concerted government action might be required. So he rejects the very notion of environmental limits. An optimistic and self-confident US would embrace the challenge of overcoming such limits. Alas, Mr Trump does not speak for that US. If the US withdrew from the Paris accord, the rest of the world must consider sanctions.

It is possible to look at the first four months of this presidency as a story of successful containment. It is also possible to view Mr Trump as a normal Republican. Unfortunately, regular Republicans have damaging ideas and Mr Trump may not be contained. This still looks like the end of the US-led world order. – (Copyright The Financial Times Limited 2017)

Martin Wolf

Martin Wolf

Martin Wolf is chief economics commentator with the Financial Times