Donald Trump is now president of the United States for more than two weeks. And both nationally and internationally, people try to relate to what he continuously in decisions, intentions and wild plans every day about his country and the world. Ratio, traditionally a good adviser, takes on the chaos theory that Trump puts into practice every day to keep the eye of the nation and the world on its own.
The Trump method is starting to quickly sign up: threatening with major measures, enforcing negotiations, dragging in something and presenting it as a big victory. Using and traditions, rules and agreements, laws and treaties are annoying obstacles devised by US opponents and therefore extremely suitable for being broken down or violated. The only thing that counts is is America First And the right of the strongest.
Domests let Trump go his new best friend Elon Musk with a heel ax through the American institutions. He owned the American Development Aid Agency (USAID) and gained improper access to the government agency responsible for the federal officials and the payment systems of the Ministry of Finance. Dismissal threatens for tens of thousands of officials if they do not comply with the new power. In the meantime, among other things, against that dismissal, the first lawsuits have been filed. But the scary thing is: it remained still silent in the US.
Trumps method became visible internationally in de facto exclamations of a trade war with America’s best friends, Canada and Mexico. At the end of last week, Trump announced rates of 25 percent on all imports from his neighboring countries. China also received extra import tariffs. Governments and investors held their hearts worldwide: did this mean the beginning of the end of free trade that the world had brought so much prosperity?
Monday, a few hours before the rates would actually go in, the Angel was partly out of it: Mexico had promised to send some extra troops to the border to stop migrants and Canada named a Fentanyl-Tsaar who drugs from Canada to the US must stop and the trade war was averted. At least for the time being, because Trump claims the victory, which is actually minimal, but continues to threaten with rates.
Markets knew and know no advice with this way of doing doing. It is chaos and uncertainty, and markets don’t like that. The basic attitude that Wall Street kept calm so far seems to work for the time being: the soup is not eaten as hot as the White House that always serves.
That is, also for America’s outside world, a risky starting point. Because although the international community is dizzy of everything that has been deposited over it so far, there are also numerous topics that have not or hardly been addressed. A solution for the war in Ukraine for example. Or a rating struggle between the US and the European Union, to which the president after Canada, Mexico and China did not yet come.
Remember that income from higher input rates is an integral part of the budget plans of (the government) Trump. At the end of this year, the large -scale tax cuts will expire that the president made in his first term. Just to maintain it – and therefore to prevent the taxes from going up just as fast – are needed thousands of billions of dollars for which there is no coverage. And that while the American budget deficit without measures is already structurally twice higher than the 3 percent of GDP that is the limit in Europe.
This also underlines that the large -scale plans to decimate the US government apparatus are not only ideological. There is also a financial necessity for it. The ‘starving the state of the State’ by first implementing tax cuts and then financing them with cutbacks is certainly not a new conservative intention in the US: that desire has certainly applied a quarter of a century.
That too has consequences for America’s outside world: see Trumps advanced attempt to wipe the development organization USAID off the map. Allies may be confronted with a crippled American diplomatic service, even higher demands for their own defense expenditure and, indeed, steadily rising import duties.
This underlines that America’s partners must also keep an eye on domestic American political dynamics. Or, brighter and completely in line with the character of the president: Follow the Money.