In most elections — like life, really — things are never as bad or as good as they seem, no matter the result. But Donald Trump’s victory is a rare case of an event that is every bit as bad, and possibly worse, than it seems for a country like Australia.
Australia is an open economy heavily reliant on exports, mainly of commodities, but well-positioned next to the fastest-growing region in the world. We depend on international stability and open borders to drive our economic growth. Trump is bad news for all of that.
The short-term result is already evident — stock markets tanking across the globe; the ASX 200 is down over 2%, after recovering from a precipitous fall from around 1pm. Bad news for your superannuation returns, of course. But like Brexit, the initial shock falls will give way to much heralded “relief rallies”, even though the long-term effect is likely be lower returns for shareholders.
The longer-term implications are much worse.
First, Trump immediately brings dangerous insecurity to the world. He has committed to, literally, abandoning US allies in our region, such as South Korea and Japan. Suddenly, they will be left to face the problem of nuclear-armed North Korea, and an expansionist China, virtually alone. The Putin regime — strongly suspected of using espionage to assist Trump’s cause during the election — will be emboldened, particularly given Trump’s declaration he would abandon America’s NATO commitments in Europe. There’s now a very real risk that Russia will be tempted to test NATO’s resolve to defend the Baltic states.
However, Trump has promised to be far more economically aggressive toward China, likely bringing those two powers closer to open conflict in our own region. That region is likely to respond by redirecting more spending into their militaries — and their equipment will, unfortunately, not be made from Aussie steel like the Turnbull government’s promised submarines.
Trump is also aggressively protectionist. He is not merely opposed to preferential trade agreements like the Trans Pacific Partnership — now a dead letter — but has promised to tear up existing trade agreements America is party to. While this will have minimal economic consequences in itself — the kind of bilateral or trilateral preferential trade agreements that have been in vogue since global trade negotiations became gridlocked have few economic benefits and merely tend to redirect trade — it is likely to lead to a significantly higher risk of the return of overt protectionism and tariff barriers around the world. With a President Trump committing to virtually force manufacturers to locate in the United States, other countries will be emboldened to do so as well, even if Trump finds a GOP-controlled Senate and House more free trade-minded than he is. An actual 1930s-style trade war is now a much greater possibility.
For a country that relies on international stability and trade flows, it’s bad news. But it gets worse.
Trump is an overt climate denialist — indeed, an active climate conspiracy theorist. Despite constant opposition from Republican denialists, Barack Obama was able to move the US forward on carbon emissions abatement, despite the lack of a carbon price. Under Trump and especially backed by a Republican-dominated congress, the US will return to being a climate laggard rather than a leader, and with far greater consequences than when a comparatively small country like Australia plays laggard. The consequences are likely to be a significant diminution in the chances of effective emissions abatement, and an increased likelihood of climate change reaching dangerous levels more quickly.
For a country like Australia, which is more vulnerable to the economic impacts of climate change than virtually any other developed country, it’s bad news indeed.
Read the local business press this morning and you’ll see some attempts to find positives for Australia. Tony Boyd, for example, clutched at the straw that Australia could act as an “intermediary” between Trump and China. Don’t be fooled. The only hope is that Trump fails to keep the majority of his commitments and oft-expressed pledges — that Trump as president becomes the mellower, more moderate and mainstream figure he was supposed to become after the primaries were over. Given Trump’s now won the election by refusing to mellow, how likely is that?
The only possible upside for Australia is that a relatively large pool of educated, skilled progressive workers from the United States might now be looking for a wealthy, Anglophone democracy to move to. For an agile, innovative economy like Australia, it’s a no-brainer that we should be trying to encourage them to move here, starting now.
Best case scenario: overall US economy so obviously suffering that House GOP members obey their sponsors and impeach Trump within his first Term.
In some ways the social impact may be greater than the economic impact. Trump’s win continues the emerging message around the developed world that a majority of the population rejects the current model of government. That model could be characterised as by the elites for the elites. One thing this election has shown is that the US elites (not just the 1% who can survive anything) just don’t get it – and did not offer anything coherent and understandable to the alienated majority that has supported Trump. Trump probably won’t fix anything – but the message has been sent. In Australian terms I think it could be characterised as sent with a specially sharpened rough end of the pineapple!
I suspect the next round of popular judgement on national governments may involve a Front National government in France and the potential breakup of the EU.
“One thing this election has shown is that the US elites (not just the 1% who can survive anything) just don’t get it – and did not offer anything coherent and understandable to the alienated majority that has supported Trump.”
That’s it. What bold commitments to the disenchanted did Hillary promise? Rundle pointed out this lack of coherence several times. Business as usual wasn’t going to cut it. If only the Democrats had dumped the dynasty and installed Sanders as candidate.
Don’t worry the obsession with Nationalist popularism will fade. Problem is Trump will do to the US what Berlesconi did to Italy so there will be some damage first. Big question is what will replace it?
Victory for Trump,the Brexiteers, FN in France or the the return of Hanson here may be described as a rejection of the elites but is really about a return to racism and resentment. Trump, BoJo, Farargo, Le Pen ,Hanson …elitists all.
Pauline Hanson elitist??¡¡ How on earth do you arrive at that conclusion? The woman is a scrubber.
She’s become very wealthy, has her voice heard whenever she wants, is in the media constantly, has even the government of Australia sucking up to her, yeah, I’d say she is totally elite.
She’s neither classy nor intelligent, but just like Trump, that is no barrier to joining the elite.
Thank you Saugoof, could not have put it better myself.
Hope that helped Venise.
I’m sick of hearing about so-called “elites”. Have a look at the voting stats for <30 year olds. 55% support for Clinton (down from 60% for Obama). Trumps best returns were from rural older whites and it was just enough to get him over the line. The future of America doesn't lie in older non-urban whites and everyone else is definitely not one of the "elites".
China needs to reduce emissions or people will continue to die: their air quality is as bad as that! What better choice of a tool to use to escalate a trade war than for China to ratchet up climate change barriers against the US to isolate it?
“The only possible upside is that a relatively large pool of educated, skilled progressive workers from the United States might now be looking for a wealthy, Anglophone democracy to move to. ”
How arrogant, how pompous you sound Bernard.
Why is that pompous or arrogant, Joe Fitzpatrick?
Virtually all the news here in Europe reflects the view that this election outcome will be disastrous for the whole world – Europe, Asia, Oceania, Africa and the USA.
Bernard’s concluding paragraph offered the first potential positive outcome – for anyone – in all the analysis published so far which I have managed to access, anyway.
Bit harsh, Joe.
I agree. If ever there was a moment for Australia to accept the need to be master of its own destiny this is it.
Oh, Bernard, what touching provincial insecurity thy doth betray.
Iraq started it. Trump will finish it. All his Presidency will do is confirm the shrinking limits of American power and hegemony. It will also – way past time – end the bizarre Cult of The White House. (JFK, Reagan and Jed Bartlett have much to answer for.)
The world will politely sidestep whatever transpires in US internal politics and economics. And move on. Four years from now Americans will decide whether or not to rejoin the grown-up world of nations, and if they are suitably gracious, and have elected a reasonably adult leader, that’ll be fine. But they can speak strictly politely and they can speak strictly in turn, henceforth.
The world is much, much bigger than the US, and has been all along. Pretty soon Americans will finally start to notice. Allies like Oz ought to have noticed it within a few months of the invasion of Iraq (or preferably before). We’d better do so now. The American century is over.
One satisfying byproduct of this will be the lancing of the festering putrid boil on the skin of democratic conversations that for four decades has been Keith Rupert Murdoch. Let all the poisons that lurk in the mud hatch out. Well, they’re out.
Over to you, Fox News, RWDB’s, tin foil hatters, et al. Should be grim fun, watching them, watching their own delusions, come to grotesque life. Ultimately the only way to shut up the obnoxiously irrational is give ’em what they’ve been braying for. Rope, enough, Department of, etc.
The sane media will, like the majority of us, survive, BK.
Hopefully Jack, the “sane” media will completely dump the entire concept of opinion polling which has held it in thrall for far too long. I’m waiting for a single principled pollster (or pollster booster, BK) to sack themselves. All of them, the whole concept and delivery, has lost all credibility and no media will have my support until they front up and admit it. Come on BK, admit you got it completely wrong, you had no idea, you just ran off at the mouth before and after.
Agreed Charlie. When the voters are actively gaming the pollsters and knowingly subverting the political media paradigm…you know the gig is up.
Well summarised!