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Trumpworld? The Consequences of the 2016 U.S. Election for Economic Globalization and International Order
Qian Yingyi, Dean of the Tsinghua School of Economics and Management, and Niall Ferguson, Senior Fellow at the Stanford-based Hoover Institution, held a dialogue which focused on the economic, cultural, and political implications of the 2016 U.S. election of Donald Trump as President.
The two economic thought-leaders addressed a number of topics relevant to the evolving world order, including political shifts in Great Britain and the United States, an assessment of President Trump’s true reach in terms of power and influence, potential results of Trump’s first term in office, and implications of his presidency for China and the rest of the world.
The discussion began with an overview of what Ferguson referred to as a “mood of disillusionment” within Great Britain and the United States which reverberates throughout the world. Ferguson first notedBrexit, Britain’s separation from the European Union (EU), occurring as a result of the EU’s inability to cope with its recent financial crisis and the mass migration of refugees from surrounding war-torn countries, notably Syria, Afghanistan, and Iraq, into Europe. In addition, Ferguson highlighted the growing divide between global elites and non-elites in both Great Britain and the U.S., noting the misjudgement of political experts who wrongly predicted theBrexitoutcome and the election of President Trump due to a disconnect from the everyday experiences of common people.
With bothBrexitand the election of Donald Trump occurring at such narrow margins, the perception was that of populations willing to take a chance on alternatives which may not reflect the established rule of order. Ferguson echoed this sentiment of public awareness held by Dean Qian and many in attendance, noting that “narrow decisions have big consequences.” This diversification of public voice spoke to not only the impact of economic globalization, but also a cultural globalization that promotes a multiculturalism in thought and practice that many world powers have yet to fully accept.
With President Trump’s rhetoric causing an uproar in the media, Dean Qiao and Ferguson took a moment to focus on the President’s true political power and where he stands to make the largest political and economic impact. Both scholars highlighted the areas of tax reform, healthcare reform, and deregulation as being within Trump’s immediate control, with Speaker of the House Paul Ryan and other members of Congress dictating the overall economic plan which requires the checks and balances of U.S. government. Dean Qiao noted U.S. tax reform as being the most critical area for the health of the global economy, with the creation of the right formula for corporate tax and income tax producing results that support producers and consumers across the world. Both Dean Qiao and Ferguson leaned heavily into the Border Adjustment Tax, noting that it must create an upward adjustment in the U.S. dollar to boost consumerism. Dean Qiao cautioned that the difficulties of tax reform could result in an increased U.S. budget deficit, albeit temporarily.
The controversy surrounding Trump’s election and his First 100 Days decision-making leads many to consider how long he will serve as President. Dean Qiao and Ferguson shared various scenarios which could result in prolonged success for Trump and a potential second term. Ferguson noted that the combination of tax reform, deregulation, and investment into U.S. infrastructure could boost the U.S. economy. He reinforces this by noting President Trump’s commitment to advocates of Keynesian economics who believe in more private sector intervention and corresponding public sector support to boost jobs and spending. This hands-on approach, according to Ferguson, could lead to growth and increased support for Trump around mid-term elections.
The discussion noted many Trump-led factors which may result in his re-election, but there were also outside considerations. One notable area was the Democratic Party’s ability to deal with its own inefficiencies and field a viable presidential candidate. Ferguson noted that the party’s avoidance of self-destruction could have huge implications on the longevity of President Trump’s administration and its decisions which implicate the global community.