Trumpism will clash with economic reality

 
Christian May
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Republican Presidential Candidate Donald Trump Holds Rally In Mesa, Arizona
Donald Trump became the 45th US President yesterday (Source: Getty)

Yesterday marked the 27th anniversary of the fall of the Berlin Wall. It also heralded the ascendancy to the world’s most powerful office of a man whose most famous campaign pledge is to construct a massive wall along the length of America’s southern border. “We’re going to build it,” declared Trump, “and Mexico’s going to pay for it.”

This promise of harder borders, combined with a commitment to protectionism and nativism tapped into a yearning in America for a radical change in direction and serves as an emphatic repudiation of the status quo. The comparison with the UK’s Brexit vote only goes so far.

Yes, the vote can be seen as an act of rebellion, even of protest. But despite the popular interpretation, many of Brexit’s keenest advocates were arguing for more engagement with the world, more free trade.

Read more: These are Donald Trump's policies on tax, trade deals, China and M&A

President-elect Trump is not only against these ideas but he also represents a more brutal and simplistic view of the world. He says he’ll make Apple manufacture their iPads in the US. How? He says he’ll bring back the jobs that have been shipped overseas. How?

He cosies up to Russia and sows suspicion about entire races and religions. And yet there he is: the keys to the White House are in his hand and he will sit in the Oval Office with the full weight of a Republican House and Senate behind him.

This full sweep of the arms of government may in fact provide some reassurance to Trump’s critics: at least he won’t face gridlock and who knows, speaker Paul Ryan may moderate Trump’s wilder tendencies. If so, it would prove to be a thin silver-lining to a pretty depressing cloud. Trump is an interventionist, and has already singled out M&A deals to block.

Read more: Who are the winners and losers of a Trump triumph?

He’s vowed to turn his back on trade liberalisation and global cooperation. The markets may have regained their nerve in the immediate aftermath of the result, but future stability cannot be taken for granted. In his victory speech, Trump pledged to “double our growth and have the strongest economy anywhere in the world.” These are stump-speech, Tweet-friendly soundbites and are unlikely to be realised by his high-spending, tax-slashing and protectionist economic policies. Trumpism is set for a violent clash with reality and it’s hard to know which will come off worse.

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