Trump’s second term: Let’s hope his campaign was mostly rhetoric

This was days after suggesting that Liz Cheney, a Republican who broke ranks to vote for his impeachment after the Capitol Hill riots of 6 January 2021, should be shot. 

This strategy of polarization has succeeded beyond expectations. High inflation has certainly played an equal part. As the conservative think-tank Heritage Foundation estimated, “the highest inflation in decades “means that the average weekly paycheck is $160 larger than when President Joe Biden and Harris took office, but it buys $35 less." 

The irony is that US GDP growth and job growth have been unusually good; the Biden administration’s gamble was that this would push up wages at the bottom of the pyramid. 

Although it did happen, voters with better-paying jobs usually credit themselves for getting a raise or a new job—and blame the incumbent for higher prices.

Also read: US Swing State election 2024: Trump defeats Harris in North Carolina, Georgia; Who is leading from where?

As the US reconciles itself to a second Trump presidency, the key question will be how much of his tactics were theatre to energize his mostly male support base and how much defines what his second term in office will look like. 

In between the name-calling by both sides, there was enough—well, just about—discussion of policy to give us an outline of Trump’s action plan. The clearest, from a man who recently called tariffs the “most beautiful word in the dictionary," is a likely 60% import duty on Chinese imports and 10% on shipments from the rest of the world. 

The implications of this would extend well beyond China and mean higher prices in the US because America imports about $3 trillion of goods a year. 

Chinese factories, awash in even more overcapacity, would find ways to sell their goods via Asean countries or Mexico, for instance, and by expanding production bases offshore. 

This week, a UK think-tank went as far as to say that Britain’s GDP growth rate of 1.2% might halve (or worse) if an incoming Trump administration raised tariffs by 10% across the board on the rest of the world. If global growth slows, as is likely, governments like the UK’s and many others will struggle to restructure their economy and finances.

On taxes, the Trump administration is likely to extend the income tax cuts of its first term (passed in 2017). Corporate tax, which Trump cut from 35% to 21%, might be slashed to 15%. 

That would take corporate taxation to levels below those prevalent even in Hong Kong and Singapore, for years dubbed the “freest economies in the world" by conservative think-tanks. 

This could push up investment, but merely extending the tax cuts of the first Trump term would cost the US government $4.6 trillion in forgone revenue over the next decade. 

Also read: Trump or Harris? Economic volatility is another election result we can expect.

US tax cuts are both a local and global issue because rising US debt and rising Treasury yields matter to the rest of the world. The Economist noted, “His plans could add $7.5 trillion to America’s debts over a decade, according to the Committee for a Responsible Federal Budget."

In the immediate future as well as longer-term, the Trump administration’s handling of China and Israel is likely to be more fraught. 

On China, a bipartisan American consensus has been mobilized by President Xi Jinping’s aggressiveness on Taiwan and Chinese overcapacity in several industries, especially the new commanding heights of green industries, including rare earth minerals. 

Listen to Raja Krishnamoorthi, the top-ranking Democrat on the US House panel on China, and he sounds much like Republicans do. On Beijing, there has not been, as The Economist argued last month, the “Trumpification of American Policy," but arguably realpolitik in dealing with a very different China since Xi became its leader more than a decade ago, with China’s stranglehold on green technologies in focus. 

As the World Politics Review observed, “Many observers are predicting a supply crunch as demand for these critical minerals—including copper, cobalt, lithium, graphite and others—outpaces production. And in the U.S. and Europe, policymakers are growing increasingly concerned about the implications of a looming shortage of these minerals on the West’s competition with China."

What a second Trump presidency would add to this worrying mix of global tensions in West and East Asia is what many voters who support him appear to enjoy: his unpredictability and practice of politics as a performative art. To state a banal truism, what works at a campaign rally may not on a global stage.

The most worrying aspect of a second Trump presidency is that he has been abandoned by many senior members of his first administration, including retired general John Kelly, his former chief of staff who described him to The New York Times recently as a “fascist" who admired Adolf Hitler. 

Also read: US election 2024: A Republican sweep could trigger major policy changes, says Jefferies

Former defense secretary Mike Esper said he was not sure “we can survive another four years of Donald Trump." Deep-rooted concerns voiced by members of the first Trump administration perhaps form the most chilling barometer of this unsettling and unsavoury election.

Former New York governor Mario Cuomo’s elegant quote from a couple of decades ago, that “you campaign in poetry (but) you govern in prose," must now be reworded to hope that a campaign marked by insults might just translate into an administration that governs in normal prose rather than the kind that generates alarming headlines.