Editorial. Triumphant Trump – The Hindu BusinessLine

Donald Trump of the Republican Party has been elected the 47th president of the USA. He had earlier been the 45th. In between there was the octogenarian Joe Biden of the Democratic Party whose Vice President, Kamala Harris, ran against Trump. Everyone had predicted a very close election, so much so that many felt that the final result would not be known immediately. In the event those fears have proven unfounded and the race was not a close one. Trump has won a good mandate and that is a cause for great relief because uncertainty of the kind that America and the world witnessed in 2001 would not have boded well for the kind of world we live in today. Whatever the opponents of America may say, it remains a great power economically, militarily and in terms of its soft power. So all things considered it’s welcome that it has avoided the pitfalls of an uncertain electoral outcome.

That said it’s also true that Trump can himself be a cause of heightened uncertainty. He is given to taking unusual, unilateral and unpredictable decisions, sometimes even via X or Twitter. So the world can look out now for a well-settled political scene in America and an increasingly unsettled and unsettling one outside. There are enough and more opportunities for Trump to keep everyone on their toes.

He inherits two major conflicts that started under the Biden regime and which have had hugely deleterious consequences. The first is the Russian invasion of Ukraine brought on by the Biden administration’s attempts to take NATO to Russia’s western border. The other is the support given to Israel in the one sided war against Palestinians in Gaza. Neither of the two Biden policies is popular in America because Americans don’t see any justification for it. They want a reversal of these policies and it is highly probable that Trump will give them what they want very soon after he is sworn in. This will benefit the world in a number of ways, as peace can and does yield expected and unexpected dividends. So that’s something to look forward to next year. There is, of course, Iran which is Trump’s least favoured nation and against which he may well take some unnecessary steps.

Of equal importance is Trump’s approach to China. Last time around he had made no bones of the fact that he regarded China as enemy number one. He had acted accordingly by increasing tariffs on Chinese imports. The Biden administration, to its credit, agreed with Trump on this score and didn’t reverse these trade policies. On the contrary, it brought in the technology denial laws that effectively cut China off from access to advanced American technologies. It will, therefore, be interesting to see how Trump handles China now: as aggressively as before or in a more conciliatory manner. This is the other thing to watch out for as he can do the unexpected and very suddenly too. Whatever he does, it will have huge implications for the world generally and India, particularly.

There is then the most important domestic question: immigration and what to do about it if, as many Americans fear, it will permanently alter the demographics of America. To be fair though, Trump has never opposed immigration per se but only the illegal immigration of unskilled people. This almost wholly concerns the Spanish speaking countries that surround America. Last time Trump had wanted to build a wall on the Mexican border but couldn’t because of paucity of funds. It will be interesting to see how he handles the problem now — gently or with his customary heavy hand. It should be recalled here that he had banned the grant of visas to people from many Muslim countries in his earlier reign.

As to his approach to the US economy, he has repeatedly made his position clear: America must cut back on welfare spending and, together with higher tariffs, increase subsidies to American manufacturing so that the job market bounces back. In other words, classical protectionism. It’s hard to predict the outcome of such policies, at least in the coming four years of Trump’s second term. But one thing is certain: it will legitimise protectionism and thus reverse the received wisdom of the last 70 years. American economists will have to rethink their exhortations now.

Trump’s energy policies will also have a huge bearing on the shape of things to come, from the microeconomic aspects of energy prices and exploration to the larger ones of climate change, of which he is scornful. India, in particular, will have to be very watchful because it’s on these issues that, as always, it is very vulnerable. However, India can probably be more hopeful where American policy towards South Asia is concerned. The Biden administration oversaw a number of regime changes that did not suit India at all. Trump is likely to be more supportive of Indian interests in this regard, not least because he needs a far greater degree of cooperation from India in the Quad. The first six months of Trump’s second presidency will bring clarity to these matters.