Trump takes aim at globalization on day 1

The inaugural address of the 45th President of the United States had all the nuance of a boxing match, with the outsider Trump on one side, and the Western financial and political élite on the other. Anyone who hoped to see a calmer, more docile Donald Trump on January 20th, was certainly disappointed, and must now prepare to face the reality ushered in by the unprecedented 2016 election campaign: the process of globalization as we have known it for the past 25 years is facing a stunning challenge, and may well give way to a new paradigm in the coming period.

Donald Trump ran his campaign against the Republican Party, and against the US political establishment as a whole. The overriding thrust was an attack on the trade policies that have encouraged the transfer of industrial jobs to countries with lower labor and regulatory costs. No effective response was provided to his argument that it’s time to put American interests first, through both pressure and incentives encouraging companies to remain in the United States.

Hillary Clinton famously failed to engage Trump on this issue, especially in the crucial battleground states of the Rust Belt – that ended up sealing the new President’s victory – hoping that stressing her opponent’s obvious character faults would be enough to get her over the top. The rebuke issued by the traditional Democratic base of unionized workers, among whom Clinton won 10 percentage points less than Barack Obama had just four years earlier, was stunning. It is now clear that the time-honored practice of viewing those left behind by globalization as a residual segment of the population, with no other political alternatives, has failed.

Trump’s inaugural address took on this question directly. “You will never be ignored again,” the President said, as he trained his fire on an establishment “that protected itself, but not the citizens of our country.” It’s certainly not the first time we have heard populist rhetoric from a politician in the United States, but the worried voices heard around Washington and New York reflect the fact that Trump doesn’t feel the need to give paeans to globalization and free markets.

“Protection will lead to great prosperity and strength,” he affirmed, indicating the rejection of the thesis that has dominated Western institutional thinking for decades, that of the magical powers of the free market and the need for the state to stay out of the economy.

The subtle tactic of linking the word “free” to the market deregulation policies that over a period of 35 years have greatly enriched those at the top while causing stagnation and insecurity for those in the middle and at the bottom, may have run its course. It is indeed amazing to see how current economic orthodoxy attempts to ignore the very history of the United States and Europe, which have benefitted greatly from public investment and dirigistic measures over the course of centuries. Freedom and government intervention have proven not to be incompatible at all, in the context of a rules-based system that guarantees fundamental rights.

A similar distortion has been seen in foreign policy, regarding the concept of democracy. The attempt to export “our values” through military intervention based on the doctrine of regime change, or more recently of the right to protect (“R2P”), has obfuscated the West’s own ideals, considerably hurting its standing in the eyes of the world.

Donald Trump has been remarkably consistent on this point: he aims to put an end to ineffective foreign wars and return to pragmatic diplomacy which prioritizes US interests, thus avoiding the misrepresentation of democratic values as an instrument of an interventionist foreign policy.

On the whole, the shift underway throughout the West – whether we like it or not –  represents the end of the notion of a set of shared rights and values in an increasingly borderless world. Globalization will not be reversed in terms of the movement of persons and goods around the world. What is likely to change though, is the dubious equivalence between global interaction and the disappearance of the nation-state, the vehicle for so many achievements in recent centuries.

There is no guarantee that Donald Trump will move decisively in this direction. The issues at hand are complex, and there are varying views and degrees of understanding of these problems in his administration. A unified concept of a “new nationalism” and the policy instruments needed for its implementation has yet to be set forth.

In addition, there is widespread institutional opposition to the type of changes in economic and foreign policy that Trump and his closest advisors have advocated. In some cases, there is good reason to express caution about seeking simplistic answers to complex questions; in others, there is clearly a desire to maintain the influence of an élite that seeks to govern international processes without the unwelcome nuisance of a populist outsider and the tens of millions of voters who have supported him.

Contradictions abound at the beginning of Donald Trump’s presidency. On the day after his inauguration hundreds of thousands marched for women’s rights and in opposition to the new President. There was even the delicious image of liberal protestors holding signs defending the veracity of reports circulated by the CIA, that has intervened heavily in the fight over the direction of US foreign policy, in particular as regards Trump’s goal of better relations with Russia.

The irony of these images indicates the daunting odds facing those who seek to establish a coherent link between the revolt of the electorate against failed policies and a rational shift in approach which prioritizes the productive economy and effective diplomacy. A period of uncertainty awaits, as the Trump Administration finds itself forced to translate into reality the desire to change the orientation followed by the western establishment over the past 25 years. What is clear, however, is that business as usual is no longer possible; the fundamental problems that emerged from below the surface in 2016, are now before both the United States and Europe, and must be addressed, lest the revolt of the “forgotten men and women” – a term Trump surprisingly borrowed from Franklin Delano Roosevelt – becomes even stronger, and more unpredictable.