Donald Trump’s talk is of false cures

Donald Trump’s inaugural address represents a departure from Republican orthodoxy and a retreat from the central tenets of US policy since WWII. Alarmingly, it did nothing to allay fears that his administration signals a threat to the security and prosperity of the Asia-Pacific region, and indeed the world.

Inaugural addresses are usually an occasion for lofty and unifying oratory rather than the combative and shrill rhetoric that Trump delivered from the steps of the US Capitol. His embrace of nativism and protectionism — the platform upon which he was elected — is anathema to the policies championed by the two Bushes, Reagan, Ford, Nixon and Eisenhower.

Trump’s promise to “Make America Great Again” is a falsity given the US is the world’s leading economy and has the largest military. Its cultural influence — soft power — is pervasive. Trump advocates a systematic dismantling of what has made the US the global economic, strategic and cultural leader: trade, immigration and leadership of the post-Cold War world.

He claimed the US has “made other countries rich while the wealth, strength and confidence of our country has dissipated over the horizon”. But no country is wealthier than the US even though wage growth has stagnated in recent years. The economy is growing, incomes are rising, consumer confidence is up, the stock exchange is at a near-record high and unemployment is below 5 per cent.

The most worrying aspect of Trump’s speech, even though it reflected his core campaign messages, is that “protection will lead to great prosperity and strength”. Nothing could be further from the truth. This “America first” approach, redolent of 1930s populism, could have catastrophic consequences for US growth, jobs and standards of living.

Trump is, of course, responding to anxieties over industry decline, job losses and the influx of immigrants. But promising a return to protectionism is selling false cures to the “forgotten” people. The evidence is irrefutable: trade creates jobs, drives economic growth and facilitates investment. Restricting imports would increase the price of consumer goods.

He clings to discredited economic policies as a panacea to the concerns of white working and middle-class Americans in rust-belt states. Yet technology, not trade, has been the biggest factor in the decline of old industries.

Much of the analysis of the impact of Trump’s election victory for the Asia-Pacific, especially Australia, has been shallow because he has said little about the region and some of his comments have been contradictory. He has talked about withdrawing US troops from the region while also pledging to bolster the US Navy.

Trump’s inaugural address should dispel any notion of business as usual in our neighbourhood. “For many decades, we’ve enriched foreign industry at the expense of American industry, subsidised the armies of other countries while allowing for the very sad depletion of our military,” he thundered. The post-war global order ushered in by US leadership may be coming to a close.

The most tangible change in US policy, and not a surprising one, is the withdrawal from the Trans-Pacific Partnership trade deal. Trump has also flagged a renegotiation of the North American Free Trade Agreement with Canada and Mexico. Previously, Trump promised to renegotiate bilateral free trade agreements — which could include the US-Australia trade deal. And he has China clearly in his sights, accusing it of being a currency manipulator and threatening to impose a 45 per cent tariff on imports.

Australia risks being collateral damage in a US-China trade war. But this might provide an opportunity to forge a new way for trade in the region. China’s Regional Comprehensive Economic Partnership should be Australia’s focus, not the doomed TPP.

A more significant risk for Australia is being embroiled in a military confrontation between the US and China. Trump may officially recognise Taiwan, challenging the One China policy. Another flashpoint could be North Korea. Incoming secretary of state Rex Tillerson seemed to suggest a blockade of disputed islands in the South China Sea — and made clear he expected allies to “show back-up”. That means Australia.

A key challenge for Australia is the future of the ANZUS alliance — a cornerstone of our foreign policy since 1951. Trump has promised to “reinforce old alliances and form new ones”. His one specific foreign policy priority, however, was to defeat Islamic terrorism. Will this mean US boots on the ground in the Middle East with a request for Australians join them?

The Australian foreign policy establishment expects more to be asked of us. We could see more US troops stationed in Australia and greater integration between forces. Joint exercises, training and surveillance in the region could be stepped up. There could be more intelligence sharing, with the US having a bigger say in the management of joint defence facilities in Australia.

The Turnbull government has not articulated in a coherent way how we will deal with these many challenges. It looks to have adopted a wait-and-see approach. We should not kid ourselves that we enjoy a “special relationship” with the US greater than a host of other nations. We are, in truth, well down the list. In coming weeks, Trump plans to meet leaders from the UK, Canada and Mexico.

Trump’s inaugural address was dark and dangerous. It was bereft of humility or any attempt to heal the divisions across the US. While he has given voice to the concerns of many voters, his policies will do more harm than good. The greatest damage could be in the Asia-Pacific region, where Trump threatens to overturn an era of Pax Americana and herald a new age of disruption.