Trump's alternative vision

The US has to be ready for serial disruptions

Most politicians can be relied on to jettison the controversial elements of their campaign agendas in their initial days in office, and Donald Trump’s emollient acceptance speech suggested he would conform to pattern. The President of the United States disabused everyone of this notion 73 days later with an inaugural speech that explicitly spelt out the protectionism and anti-immigrant elements of his “America First” worldview. In doing so, he revealed an iron fidelity to his minority voter base by energetically getting down to business with an avalanche of executive orders that have provoked uproar in America and unease elsewhere. Mr Trump declines to play by the established rules in his attempt to fashion America into his notions of greatness. This would not have mattered if the direction of policy-making, as indicated by his first fortnight in office, had offered a sustainable alternative vision of American greatness. But that is an open question.

Not all orders issued by Mr Trump before he embarked on his reluctant vacation to Florida are questionable. His “two-out, one-in” approach to cut red tape for small businesses — stipulating that for every new regulation, two must be scrapped — is helpful in principle though the devil may lie in the details. A freeze on hiring in the Federal workforce, except the military, is a useful way to affirm his vow to reduce government, and withdrawal from the Trans-Pacific Partnership, a non-starter anyway, a nod to his job-stealing suspicions of multilateral trade treaties. But others raise cause for concern. Two orders are likely to hurt ordinary people: The scrapping of a fee cut on small mortgages and a reversal of a fiduciary rule, unpopular with Wall Street, that protected retirees from conflicts with stockbrokers. Likewise, with the repeal of Affordable Care without a replacement law. 

Order number 13769, “Protecting the Nation from Foreign Terrorist Entry into the United States”, certainly affirms Mr Trump’s notion of fighting Islamic terrorism yet it is scarcely in America's long-term interests. The high-profile legal challenge by Silicon Valley majors must be seen, in part, as driven by self-interest, but the truism that immigration is the cornerstone of America’s global innovative edge holds. Like the American people, US business is polarised.

Mr Trump’s economic nationalism and desire to override environmental and financial sector regulation make him popular with the mega-infrastructure and oil and gas conglomerates and Wall Street titans. The Keystone and Dakota oil pipelines, revived by executive orders on Mr Trump’s second full working day, may well create the kind of jobs that resonate with his support base, but the simultaneous order that they be built with American-made steel raises doubts about their viability. An Obama-era anti-dumping duty is already provoking grumbles from American steel consumers, and the huge price differential — 40 per cent in hot rolled coils alone — between Chinese and American steel means the order makes a poor business case for “America First”. Tariff protection and the infrastructure splurge that Mr Trump has promised may well create a bounce in jobs, but those gains may be offset by a significantly higher-cost economy and the increasing inclination for US producers to automate plant and machinery. These inconvenient truths may not manifest themselves till well into Mr Trump’s term. Going by his first fortnight, however, America needs to brace itself for serial disruptions.