Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

How To Read Trump

Politics / US Politics Jan 18, 2017 - 03:40 PM GMT

By: Dan_Steinbock

Politics

As President, Trump has pledged to reset the White House policies on “America First” basis. But will he deliver?

Around the world, there is great apprehension and much speculation about potential Trump scenarios. Nevertheless, not everything that is possible will happen, even with Trump in the White House.


For all practical purposes, the Trump administration’s ability and willingness to achieve its stated objectives can be illustrated with three probable scenarios.

‘Walking the talk’ scenario

The first scenario is that Trump will “walk the talk.” This is what his constituencies expect. Consequently, any moderation risks being seen as a betrayal.

In this scenario, Trump is more likely to walk the talk than not, as evidenced by his new trade policy appointments. He chose Peter Navarro – the author of The Coming China Wars (2005) and “Death by China” (2011) and “What China’s Militarism Means for the World (2015) - to head the new National Trade Council (NTC), which will oversee industrial policy in the White House. In turn, Navarro's friend, former CEO of America’s largest steel company Nucor, Dan DiMicco, is now Trump’s trade advisor, while former Reagan administration official and vocal China critic Robert Lighthizer will be the new US Trade Representative.

In this view, Trump administration is set to reverse 70 years of US-led free trade regimes.

‘Sober realism’ scenario

The second scenario is that, as candidates, American presidents say one thing, but, as president, they do something else. President George W. Bush promised “passionate conservatism,” but achieved war and deficits. President Obama pledged massive changes but ended up fostering the military-industrial complex, which led to Eisenhower’s warnings already in his Farewell Address in 1961.

In this view, Trump will adjust to realities. In China, some observers expected Trump to be a pragmatic businessman who will talk tough but only to deal from a better position. Yet, Trump is not a typical conservative, cautious, bland-speaking CEO.

While Trump will have to adjust his stated objectives in an unpredictable global landscape, he will enjoy extraordinary execution power. Today, Republicans control the White House, the Senate and the House of Representatives. Consequently, whatever the administration will decide to do is likely to be bigger and bolder, move ahead faster and have greater consequences.

In this status quo, “sober realism” may not be as likely as with Obama or Bush who faced a hostile opposition in the Capitol Hill. Political power favors unrestrained governance.

‘White black swans’ scenario

The most unpredictable, yet potentially most devastating scenario is the “white black swans” scenario. In this view, Trump administration may make policy mistakes, which can result in low probability but highly consequential adverse consequences.

That’s what happened in the 1930s with the Smoot-Hawley Tariff Act, which initially seemed to work quite well but soon caused other nations to retaliate with even higher tariffs and barriers, which ultimately paved the way to a world war.

Today, the Trump administration’s protectionist initiatives may at first strengthen the US dollar and even markets. But over time, a stronger dollar will make US exports less competitive and defuse exuberance in markets. More importantly, unilateral tariffs tend to result in tit-for-tat unilateral retaliation, which will mitigate the benefits of the original tariff and compound costs over time.

In the coming months, all Trump initiatives – including the administration’s proposed tax cuts, trade policy, manufacturing plans, infrastructure investment, stricter immigration, climate change reversals, balancing power games, military spending and so on – should be seen in light of these three scenarios.

Nevertheless, the early signs suggest that the Trump administration will, at least initially, shun sober realism and walk the talk. And that, unfortunately, translates to greater potential of ‘white black swans’ over time.

Dr. Dan Steinbock is an internationally recognised expert of the nascent multipolar world. He is the CEO of Difference Group and has served as Research Director at the India, China and America Institute (USA) and visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Centre (Singapore). For more, see www.differencegroup.net   

© 2016 Copyright Dan Steinbock - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in