Donald Trump’s historic victory represents a huge opportunity for middle America. It is a rejection of liberal internationalism, political correctness and the progressive politics of urban elites in favour of traditional American values – love of country, family and, for many, faith. Like Brexit, it heralds a return to the pre-eminence of the nation state, of national sovereignty and democracy.
Many working-class Americans, who had traditionally put their faith in the Democratic Party to deliver for them, voted Republican for the first time. In contrast, the Democrats, filled with the false confidence of urban progressives, condescended to call the working-class voter base uneducated and deplorable.
As is customary in presidential elections, Prime Minister Malcolm Turnbull called to congratulate US President-elect Donald Trump, remarking that he’s a deal maker and pragmatist.
So, what did Americans vote for? How will Donald Trump “Make America Great Again”?
Trump’s first priority will be to boost the US economy and create jobs. He aims to reshape US tax policy, dramatically cutting income and company taxes, deregulating the economy and cutting government spending. Trump’s aim is to boost US GDP growth to 4 per cent and create 25 million new jobs. In a nod to his daughter Ivanka’s efforts to support working women, Trump also wants to see greater female labour force participation and will offer tax deductions for child-care expenses for working parents. Obamacare will go, and with it an unaffordable and inflexible system. Trump will replace it with something more workable.
If you have visited the US in recent times, you will appreciate the urgent need for investment in its ageing infrastructure. Many highways, railroads and bridges are in a state of disrepair. Trump has promised big infrastructure investment. How he pays for infrastructure projects will be a considerable challenge as tax revenues are likely to fall in the short term with his tax reform package. Trump’s solution will be to attract private sector investment in infrastructure through a system of tax credits.
Trump’s election is a big rejection of the international environmental movement and its fatwa against carbon. In the US where the basic wage is $7.25 an hour, the closure of coal mines and regulatory hurdles to shale gas are blamed for blowing out the cost of electricity for ordinary Americans. Trump has tapped into this angst and has vowed to dramatically change US energy and climate policies, including overhauling the Environmental Protection Agency and scrapping Obama’s Clean Power Plan. Trump wants America to be energy self-sufficient and will encourage the development of US shale gas reserves as a source of low-emission, cheap energy. South Australia should take heed.
Like Australia, America’s success story is the story of migration. Trump recognises this and is supportive of legal, regulated migration. But, like Australia, average Americans want strong and safe borders and want people to play by the rules. Trump has tapped into this by promising to build a wall along the US-Mexico border. Expect him to ensure the letter of US immigration law is enforced, with the deportation of illegal migrants and a crackdown on employment of illegal migrants.
Finally, on foreign policy, a Trump administration will mark the end of internationalism and US adventurism. Trump has little interest in intervening in the affairs of foreign countries. However, he will take a hardline approach to defeating radical Islam which he views as a threat to American values and way of life as Communism was during the Cold War.
US allies have expressed concern that the Trump administration may not take existing relationships such as NATO and ANZUS as seriously as his predecessors. He may reset some relationships and is likely to favour countries like Australia and Britain, who share American values of democracy, the rule of law, individual liberties and personal responsibility. But he’s not going to accept free riding off US military power, so expect him to demand European and Asian alliance partners start taking more responsibility for their own security and paying their way.
From Australia’s perspective, we must monitor steps by Trump to implement a protectionist agenda. This was a feature of both his and Clinton’s campaign. Starting a trade war with China and putting up tariffs on Chinese imports will just result in economic harm to everyday Americans who would have to pay more for everyday consumables. The reason US manufacturing jobs have disappeared is more down to technology and automation than offshoring. Reducing the tax and regulatory burden on businesses as well as decreasing energy prices will help USA Inc much more than erecting trade barriers.
Further, it is imperative that Foreign Affairs Minister Julie Bishop and her team remind the putative Trump administration in the next few weeks that abandoning the Trans Pacific Partnership would boost Chinese prestige in the Asian region at the expense of the US. It would also be an enormous missed opportunity to expand US growth and jobs. And that’s not in anyone’s interest.
This article appeared in the Sydney Morning Herald on the 10th of November, 2016.