TheMarketForIdeas

After a decisive showdown that defied our expectations regarding the use of legal battles and allegations of fraud, Donald Trump emerged victorious in the US presidential race, becoming the second President of the United States (POTUS) to take a break between terms. The outcome was an anti-climax, as the vote went the way many polls and betting markets had predicted, with Trump winning by a clear popular and electoral college majority that could not easily be challenged. The financial disparities between the two candidates in favour of the Democrats could not compensate for Trump’s ability to communicate freely and charismatically with the crowd, and the Democrats failed to fully utilize the new campaign weapon, the political podcast, which surpasses traditional media in terms of audience. I don’t know if we can hope that this experience will make the Democratic Party rethink its flirtation with identitarian and economic extremism, or the way it let party cabals play games in removing Biden (who would have been a better presidential candidate) and selecting Harris, but Donald Trump managed to win record support from minorities and improve his score in absolutely all American counties. Kamala Harris has not managed to surpass Biden’s performance anywhere. But what will happen from 2025 on the external front? Will we witness a new Pax Americana or will the pessimism of the elites in the Euro-American mainstream come true?

Europe under the new America

The excessive influence of the prestige media of the US, ideologically and emotionally aligned with the American liberal current, has induced a black-and-white perspective on the candidates’ attitude towards Ukraine and Europe in the minds of European elites. In this vision, Trump is eager to betray Ukraine and leave NATO, abandoning Europe to Russia. In reality, the current relationship between the US and Europe is, by and large, a project of the first Trump term, made possible by the invasion of Ukraine by Russia, the sanctions regime applied to Russia and the continuous decline of Europe relative to the US compared to the first Trump term. America has never been stronger in Europe in the post-Cold War period because now even the Western Europeans perceive the American security umbrella. Dependence on Russian gas has been replaced after 2022 by dependence on American gas. Trump had come to Europe several times to sell “freedom gas” (in the memorable phrase of then-Energy Secretary Rick Perry). The Germans laughed at Trump at the time (we can still find the video on YouTube) but eventually came to the more expensive American option once the sanctions on Russia kicked off. Democrats risk this new American influence, as well as American energy independence, through opposition to nuclear energy, to the exploitation of unconventional resources (shale) and opposition to new infrastructure to transport energy from new exploitation areas to new markets. Alaska, which could be a Saudi Arabia of the North, has no way to supply European markets with gas in the context of Biden’s cancellation of new exploration licenses and new infrastructure projects from the Trump era. After the first phase of the energy panic in Europe, which convinced Biden to ignore the environmental extremists in the party and quickly move forward with energy exports, the White House ended up not issuing additional natural gas export licenses, which discourages the construction of new port facilities that would load the gas onto new ships that could take it to Europe or elsewhere, as the market would indicate. America was betting that Europe would not need more energy from it than it already imports. The irony is that, shortly after this decision, the Houthi rebels began attacking shipping (including energy) in the Red Sea going through the Suez Canal, which triggered new European anxieties about energy. Biden’s decision remained the same.

The war in Ukraine, the logistical challenges of supporting Ukraine, and America’s indispensability as a security partner in Europe and especially for the Eastern Flank countries, have had a chilling effect on European ambitions – we no longer hear about the European Army (except for the French defense minister’s lament that European defense is decided by Wisconsin voters every four years), we no longer hear about strategic autonomy, not much about technological autonomy, and the Geopolitical Commission was more of a marketing term than a reality.

What Americans gain from this situation is that the EU becomes a member of the American bloc in the emerging bipolar world, instead of being a power in its own right. Europe will become an incubator economy for the US (just as Eastern Europe has incubator economies for Western Europe). European tech start-ups will be transplanted to the US, European data will be used to develop American AI models, European digital infrastructures will be built with American 5G, American cloud and other American platforms, products and services, and Europeans will prefer to buy American weapons, with few exceptions. And European commercial autonomy will be constrained by the logic of confrontation between democracies (plus friendly autocracies) and autocracies (plus unfriendly democracies), in the formula pioneered by Biden.

The cost of this major American gain is support for Ukraine until a resolution to the conflict can be found, negotiated, or forced that Ukrainians, and especially Europeans, can accept without alarm bells ringing. It would be a disaster for Trump to abandon Europe just when his plan for it has satisfactorily materialized. Only a disastrous overextension of America into conflicts in several regions or the “exploding of the fiscal landmine” could lead to a “triage” of commitments, although Eastern Europe is high on the list of critical American partnerships, perhaps only below Taiwan and Israel. The anxiety of European elites towards Trump, the undiplomatic and self-defeating expressions of hostility that alienated Trump in 2016 (compared to the generous ambivalence of Ukrainians about the elections), may result from an awareness of Europe’s difficult position in its relationship with the US. Perhaps the accusations of abandonment reflect a desire for abandonment on the part of the elites so that Europe can once again be forced to evolve towards being an autonomous power and escape American condescension.

Continuity in Asia

In Asia, things will continue on the same path as before. America’s current posture in the region is the result of the first Trump Administration, taken over by Biden. In the Obama era, China was seen as a privileged emerging partner. The book by former National Security Advisor Susan Rice (who would have been a much better vice president for Biden than Kamala Harris), published in a period of optimism, mentions the China-US relationship as “the most important bilateral relationship in the world” that requires special cross-sectoral cooperation from the White House. Tokyo had been placed, despite being the economic, military and diplomatic hub of American foreign policy in the Asia-Pacific, in a humiliating position of a second class partner, with much less access to Barack Obama than Beijing had. Donald Trump implemented a new policy, launching the first Indo-Pacific strategy, the trade war with China and emphasizing multilateral formulas for cooperation in the new space. The number of meetings between the Japanese Prime Minister (then Shinzo Abe) and Trump was twice as high during Trump’s term as during both Obama terms together. Donald Trump will claim a willingness to negotiate for a good deal for America, but the path to this new economic boon includes continued support for allies in the region and the denial of Chinese hegemony. It remains to be seen whether Republican support for an even better formal relationship with Taiwan was just a bid to stress out the Democrats in power or a real medium-term plan. A new version of the Taiwan Policy Act of 2022, which was, in turn, a first evolution of the Taiwan Relations Act of 1979, would be seen by Beijing as a policy of small steps towards Taiwanese independence and would be a strong motivation to launch a conflict. The Trump White House must exercise much stronger self-control and finer control over Congress on foreign policy issues than the Biden Administration, whose statements and unauthorized congressional visits to Taiwan have caused consternation in Beijing as a deliberate erosion of the one-China policy. Good luck with that!

America after Trump

Democrats are taking solace in the fact that, with this term, Trump will be out of the picture. But the US has a tradition of politicians who exit politics feet first. The fact that Trump cannot run for another term does not mean that he will not try to become a shadow political leader. The tradition of presidents who withdraw from politics and Washington and go paint like George W. Bush was eliminated by Barack Obama, who stayed in the capital and continued to manoeuvre the Democratic Party alongside the Chicago political machine that supported him throughout his career. In many ways, the Biden Administration was Obama’s third term, a view that frequently arises among American political commentators when they wonder who pulls the strings in the White House in the state Biden is in. Trump will certainly want to be at least a Republican president emeritus, who makes and breaks political careers by appearing at election events. And we may be witnessing a new political dynasty (similar to that of Bush, Kennedy or Clinton), with his two eldest sons assuming an increasingly visible role in their father’s staff and on social media during the years of Republican opposition, which may indicate political ambitions of their own.

Photo source: Lisa Reichenstein (pexels.com).