Home Politics U.S. Foreign Policy: World Order No More?

U.S. Foreign Policy: World Order No More?

For many of America’s allies, among the most unsettling aspects of President Trump’s 2016 campaign was his insistence on upending the current world order, tearing apart longstanding international commitments and desecrating hallowed principles subtending the post-Cold War liberal world order. But in a complex world, Mr. Trump’s proposals both found support domestically and provided opportunity for long-term rivals, from Russia to China through the Middle East. The stakes for all major geopolitical players are high.

“Geopolitical Recession”

“The triumph of ‘America First’ as the primary driver of foreign policy in the world’s only superpower marks a break with decades of U.S. exceptionalism and [the] belief in the indispensability of U.S. leadership.” So write political risk analysts Ian Bremmer and Cliff Kupchan, President and Chairman respectively of the Eurasia Group, in their 2017 forecast “Welcome to the Geopolitical Recession.” “With it ends a 70-year geopolitical era of Pax Americana, one in which globalization and Americanization were tightly linked, and American hegemony in security, trade, and promotion of values provided guardrails for the global economy. In 2017, we enter a period of geopolitical recession.”

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On this reading, ‘America First’ will mean the U.S. will become an ‘absent superpower’ henceforth acting on near-term national interests, instead of aiming for longer-term global order and common values. This is likely to create short-term chaos and pockets of political risk: a resurgent China, an aggressive Russia, increasing potential for direct conflicts and the weakening of global institutional architecture. The new U.S. position is not isolationism but a unilateralism that prioritizes its own economic interests above its traditional promotion of democracy, civil rights or the rule of law, and risks the use of force with less regard for the consequences. “The global environment is really much more volatile… [with] America itself [as] the biggest risk,” Mr. Bremmer commented. “If there’s going to be a big hiccup in the global markets in coming years, it’s much more likely to come from the geopolitical environment than it is likely to come from an economic or financial crisis.”

Other analysts have long seen the need for changes to the U.S.-led global framework, emphasizing a more discriminate pursuit of trade policies: “The U.S. was the world’s largest manufacturing economy from the 1870’s to 1900’s,” says George Friedman, Chairman of Stratfor Geopolitical Futures. “There’s a [strange] thinking that protectionism is going to cause economic dysfunction. What is novel is the idea of free trade, which since 2008 hasn’t distributed wealth broadly.” By this account, he says, Mr. Trump’s positions are not radical. In Mr. Bremmer’s opinion, however, an administration that “does not want to be the world’s policeman [or] the architect of global trade… in a world where the Europeans arealready much weaker [and] the transatlantic relationship is a casualty,” makes “a world with no global leader” the greatest geopolitical risk for 2017.

Markets Moored

One key aspect of this risk is that whatever Mr. Trump says will be a principal driver of risk in today’s global markets. From Mr. Trump’s perspective, Mr. Bremmer explains, unilateralism is not bad for American markets, where geopolitical concerns in the Western hemisphere take a back seat and the U.S. does not have the same security issues as, say, Europe (immigration, or the limited ability of terrorists to hit the American homeland by comparison). As a consequence, he says, “we could see a geopolitical environment [which is] by far the worst we have experienced in decades, yet investments into U.S. markets and the strength of the U.S. dollar are going to grow” in the short term.

However, in the course of 2017, Mr. Trump’s ‘independent America’ will become not only a threat to international relationships, but also to the U.S. and global
economy. The Eurasia Group forecasts both the U.S. Federal Reserve and the European Central Bank (ECB) will be called into question and ironically become more political, if Mr. Trump’s campaign accusation of the Fed creating a “false economy” through quantitative easing continues. In the meanwhile, Mr. Trump’s proposed dismantling of existing free trade relationships could put him on a collision course with Silicon Valley, with its responsibility for the ever-increasing automation reducing manufacturing jobs in the workforce. Mr. Trump’s populist America will likely be one of his personal whims as to which corporate forces are in favour, and which are not – which is likely to lead to domestic and international strife.

European Exertions

With the European Central Bank (ECB) also having announced a sight tapering of its future asset purchases, it will feel less of a mandate to support the weaker economies of the Eurozone as populism spreads across that continent. “The ECB’s policies are 50% to blame for the surge of the populist, anti-immigration alternative for Germany, which grabbed a historic share of the vote at German state elections last month,” was the startling comment from Wolgang Schäuble, the German Finance Minister last April. Mr. Trump’s emphasis on fiscal stimulus in the U.S. and the ECB’s political predicament could lead to a “taper tantrum” later in the year, suggests Larry Hatheway, Group Chief Economist and Head of GAM Investment Solutions.

But America’s unilateralism will impact Europe in ways beyond the economic. Mr. Trump’s threat to ignore NATO treaty requirements unless European members pay their share and take greater responsibility for their own defense, for instance, might be a reasonable suggestion – if European politics were currently tranquil. It is not, however, with a year ahead that includes Brexit negotiations and populist challenges to fragile European unity from the far right in elections throughout 2017 – a far right, moreover, that Mr. Trump and his associates appear to be encouraging. Considering European history, this is imprudent. The smart way to encourage Europe to take greater responsibility for its security would, similarly, be a gradual ‘tapering’ of U.S. support to give Europeans time to build up their own defenses; abnegation of America’s responsibilities in NATO, on the other hand, could potentially hasten the potential unraveling of the European Union.

Alongside immigration and terrorism, nowhere is the need for such guarantees more apparent than in Europe’s dealings with Russia, along with the threat of Russian cyber-warfare and meddling in European elections similarly to its success in influencing the U.S. elections. The EU faces a series of ongoing challenges from the East, not least considering its common security policy, dependence on Russian gas, sanctions on Russia over Ukraine and the eventuality of further Russian aggressive expansionism e.g. in the Baltics. Mr. Trump, for his part, is famously conciliatory towards Vladimir Putin, refusing even to entertain the possibility of Russian misconduct, and naming Rex Tillerson, the former Exxon executive who has previously argued for the lifting of sanctions on Russia, as his Secretary of State. This, says Stephen M. Walt, professor of International Relations at Harvard University, invites Mr. Putin to think of Mr. Trump as a pawn, overly eager to give Moscow what it wants without getting anything significant in return.

Conversely, as Henry Kissinger has suggested, rapprochement between the U.S. and Russia invites the possibility of a greater balance of global power, which could in turn promote global stability, assuming it could drive a wedge between Russia and China, and Russia restrains influence to its near-abroad. However, Russia will see a “massive opportunity to expand its power” in Mr. Trump, “while traditional U.S. allies now see their connection with the U.S. as deeply problematic,” says Mr. Walt. In addition, if U.S. officials ignore Russia’s interference in domestic U.S. politics itself, it will continue threatening the integrity of America’s electoral process in years to come (and thus the symbolic stature of democracy itself).

Asian Antagonism

China, by contrast to Russia, has felt Mr. Trump’s wrath throughout the previous year’s campaign. Provocative actions from Mr. Trump have included taking a phone call from Taiwan’s Tsai Ing-wen (casting doubt on longstanding U.S. “One China” policy), appointing China hawks such as Peter Navarro (National Trade Council) and Wilbur Ross (Dpt. of Commerce), repeatedly threatening to slap a 45% tariff on Chinese-made goods, and continually claiming China is manipulating its currency and “stealing” U.S. jobs. Realigning the U.S. trade relationship with China was a central pillar of Mr. Trump’s campaign, from the premise of the U.S. having hemorrhaged millions of manufacturing jobs since China’s accession to the WTO in 2001.

Is it, however, in U.S. interests to antagonize China to this degree? China is the only country that can compete with American influence atop the global geopolitical pyramid, is a major U.S. economic partner and is an aspiring regional hegemon in South-East Asia. It also happens to be on the verge of a leadership change, making President Xi Jinping particularly sensitive to provocation and “more likely than ever to respond forcefully to foreign policy challenges,” says Mr. Bremmer. Simultaneously, China faces a nationwide debt crisis caused by expansionary monetary and fiscal policies. China faces business defaults and bankruptcies, low industrial profits, winnowing returns on investment and the very real prospect of yet another slowdown in the real estate sector,” says Strafor analyst John Minnich. “How well Beijing manages these problems in the months ahead will, to a great extent, determine China’s economic, social and political stability for years to come.”

Mr. Trump clearly has the opportunity to rattle Mr. Xi, with any misstep from the latter likely provoking “global economic volatility,” says Mr. Bremmer, adding that Mr. Xi may unwittingly increase the chances of significant policy failures by prioritizing stability over difficult policy choices in the run up to the party congress in August. However, Mr. Trump does not hold all the cards: Mr. Xi may no longer feel bound to either China’s economic partnership with the U.S. or military restraint in South East Asia, particularly after Mr. Trump’s shunting of the Trans-Pacific Partnership, which was a major component of President Obama’s ‘pivot’ to Asia and was intended to strengthen ties with key U.S. allies at China’s expense. Undercutting U.S. allies such as Japan in the process, then, has provided China with an opening to tailor both economic and military relations in the region to its own benefit. “There is no question that China is going to seean independent America as an opportunity to spendand invest in alternative architecture that fragments the world into a less unified system,” says Mr. Bremmer, citing China’s “major opportunity” to take on greater global leadership. The fight Mr. Trump has picked with Beijing has “weakened the U.S. position at the same time,” Mr. Walt concurs.

Meddling Middle East

Meanwhile, in the Middle East, Mr. Trump appears poised to continue the mistakes of
his predecessors and possibly make new ones of his own. Having thrown his unequivocal
support behind Israel’s Prime Minister Benjamin Netanyahu, but more significantly the settler movement that continually pulls the latter’s governing coalition rightwards, Mr. Trump appears to have abandoned efforts to achieve a two-state solution, which will do little to improve prospects of peace and stability. Mr. Trump has laudably promised to crush the terrorist organization Islamic State, though ceding the ground to Russia in Syria, as he has hitherto suggested he will, creates yet more complications. As Russia and Bashar Assad’s regime are allies of Iran, Mr. Trump can’t effectuate his rapprochement with Moscow and Damascus without also strengthening Iran’s position.

Mr. Trump has repeatedly denounced the U.S. nuclear deal with Iran. However, if he abandons it, Iran is likely to resume enriching uranium and “leave [him] with the choice of either a nuclear-armed Iran or starting another war in the Middle East,” says Mr. Walt. With Mr. Trump’s national security apparatus likely to push him to adopt a more confrontational approach to both Iran and Islamic extremism, this could “strengthen Iran’s hard-liners, keep the U.S. pinned down chasing terrorists in various places, and encourage Tehran to deepen ties with China,” he adds. With Iran having sharply grown its oil production after sanctions were lifted in January 2016, and a majority of the Republican congress pushing for sanctions to be re-imposed or at least a re-negotiation of the nuclear deal, “[s]uch a development could significantly impact Iranian oil output in an already tightening market and lead to higher oil prices,” says Roberto Cominotto, Investment Director for Energy Equities with GAM.

A Realist approach to the Middle East, counters Mr. Walt, would focus on the regional balance of power and seek to ensure no single state is able to dominate its energy resources. “The U.S. should cultivate business-like relations with all states in the region and play contending forces off each other,” Mr. Walt maintains, as it has sought to do historically. But the contradictions inherent to Mr. Trump’s hardline policies may forestall any playing of smart balance-of-power politics.

As Mr. Trump’s predecessors have almost uniformly found, clear-cut positions taken on the campaign trail tend to be enveloped and ultimately drowned by the reality of the complexity of governance. Mr. Trump, however, does not remotely resemble his predecessors. Whether this will be a good or a bad thing, only time will tell – but it’s certain to be an uncertain and bumpy ride.

Glenn W. Leaper, PhD
Glenn W. Leaper, Politics Editor, is a political theorist, analyst, editor and writer. He completed his Ph.D. in Political Philosophy and Critical Theory from Royal Holloway, University of London in 2015. His research focuses on ideology, unaccountable structures of power and surveillance capitalism. He is also a communications consultant, speechwriter, interpreter and journalist. Glenn has an international background spanning the UK, France, Austria, Spain, Belgium and his native Denmark. He holds an MA in Literature and a BA in International Relations.

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