Commentary: The exorbitant cost of America going it alone

Commentary: The exorbitant cost of America going it alone

America's allies and adversaries are learning to sustain deals without the US, says one observer at the Financial Times.

LONDON: Here is Donald Trump’s art of the self-harming deal.

First, demand China eliminate its surplus with America, otherwise you will start a trade war. Second, ensure your negotiating team is divided and confused. Third, capitulate after China offers a few meaningless pledges — as the Trump administration did last weekend.

Next, discover in a rage that you have been hoodwinked. Finally, resume incendiary threats of a trade war.

READ: A commentary of the US's conundrum of twin contradictory goals concerning trade talks with China.

Mr Trump has yet to take those last steps. But as night follows day, he will. It is Mr Trump’s basic dialectic — threats followed by conciliation followed by rage followed by threats. 

Wash, rinse and repeat.

SAME PATTERN

He is following the same pattern with North Korea’s Kim Jong Un. Last year Mr Trump threatened to wipe the country off the map. 

Then he discovered that “little rocket man” was honourable. The White House even struck commemorative coins for next month’s planned summit in Singapore.

Now Mr Trump is starting to suspect he may have been taken for a fool. Mr Kim may not want to denuclearise after all. Mr Trump is evenly poised between conciliation and rage. There is rarely any in-between.

READ: Little sleep lost if Trump-Kim summit in Singapore is delayed, a commentary,

READ: Calculated move or cold feet? A commentary on what's behind North Korea's threat to cancel the Trump-Kim summit.

PAPER TIGER

What is the price of these wild mood swings? The instant cost is to weaken America’s leverage. With each fresh cycle, the administration’s threats are taken less seriously.

It is all very well saying ZTE, one of China’s telecoms champions, is a serial violator of US law and will be banned. But if you follow up by tweeting that you now want to put ZTE back in business, your previous stance is devalued.

US President Donald Trump says he is working with Chinese leader Xi Jinping to help telecom giant
US President Donald Trump says he is working with Chinese leader Xi Jinping to help telecom giant ZTE to stay in business. (Photo: AFP/Johannes EISELE)

By the time you revert to your brimstone rhetoric, as Mr Trump surely will, China will no longer be quite so worried. They know a paper tiger when they see one.

The same applies to North Korea. Add in Iran’s response to America’s withdrawal from the nuclear deal. And Europe’s reaction to trade threats.

WALK AWAY?

But there is a steeper cost to America, and to the world, that far outweighs Mr Trump’s immediate self-harm. It comes in two forms. The first is cumulative.

The more the US thumbs its nose at the global system that it built, the harder it will be to repair.

America’s allies still cling to the hope that Mr Trump is a one-off. Not only will he be replaced by a more conventional president but we need only wait for two and a half years before that happens.

Should Mr Trump win again in 2020, the global shock will far exceed his first victory. It would confirm what everyone fears — that America has made a lasting decision to walk away from the global order it created. We can already measure the difference after 18 months.

trump victory speech
US President Donald Trump speaks to supporters during election night at the New York Hilton Midtown in New York on November 9, 2016 after his win. (AFP Photo/Timothy A Clary)

ALLIES, ADVERSARIES LEARNING TO MOVE ON

There was a time when a US president could pull the plug on the initiatives of others and they would wither. Think of the 1999 Kyoto protocol on global warming. Or the 1956 Anglo-French-Israeli invasion of Suez.

The world had already evolved before Mr Trump came to office. His presidency is proof of concept.

When Mr Trump withdrew America from the Trans-Pacific Partnership, as he did in his first week, the trade deal did not die. It is alive and well.

The same applies to the Paris accord on climate change.

My bet is that Europe and China will keep the Iran nuclear deal alive too. It is becoming a habit. Allies and adversaries alike are learning how to sustain deals without the US.

MOOD SWINGS

But the world must still reckon with Mr Trump’s wild mood swings. His tactics with China are a case in point.

Next week Wilbur Ross, US commerce secretary, will try to hammer out a 21st century version of the barter deal. He will ask China to agree long-term contracts to buy American soyabeans, gas, steel and other commodities.

Were Mr Ross working for a different president, he would approach China alongside Europe and Japan, America’s main trading partners. They would collectively pressure China to carry out structural reforms.

Instead, Mr Trump is threatening punitive sanctions against America’s allies.

Meanwhile, China must commit to buying low value-added US goods at the expense of America’s trading partners. Economists call this “managed trade”. Non-economists call it a cry for help. It makes a mockery of the rules America created.

DANGER OF CONFLICT

The second cost to Mr Trump’s dealmaking is the danger of conflict. There is always the fear he will become a hostage to his own words.

In recent weeks he has been basking in coverage of his impending Nobel Prize for disarming North Korea. Now he is learning it was a terrible misunderstanding.

Mr Trump only has two modes. Will he pretend not to hear and meet Mr Kim anyway at some point? Or will he revert to a game of nuclear chicken? 

The difference is not trivial.

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Source: Financial Times/sl

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