The True Dangers of Trump’s Economic Plans
His Radical Agenda Would Wreak Havoc on American Businesses, Workers, and Consumers
The structure of unipolarity that began with the collapse of the Soviet Union bestowed the United States with enormous, unchecked power. The United States became the first country in history with no peer or near-peer competitors. It became the only one with influence in every region of the world and the only one to unquestionably dominate its own neighborhood. By 1992, the United States may have been the most powerful country in every major global theater.
For American officials, the natural temptation was to use this moment to expand the United States’ global influence. Drunk with power, Washington doggedly enlarged NATO into eastern Europe, paying little heed to Russian concerns about Western encroachment. It broadened its embrace of economic openness, supporting the creation of the World Trade Organization in 1995, despite the potential threat its compulsory dispute settlement posed to national sovereignty. It also backed China’s membership in the organization in 2001. In the eyes of U.S. policymakers, this expansionist campaign was not just good for their country but also good for the world. Washington, like all hegemons, convinced itself that the world order it was creating was universally preferred to all others. It began to pursue what the international relations scholar Arnold Wolfers called “milieu goals,” or goals designed to make the world better conform to one country’s values.
In the 1990s and the first decade of the twenty-first century, it was possible to defend this line of thought. When power is highly concentrated in the hands of one hegemonic state, the dominant entity’s fortunes and misfortunes are, in fact, often shared by everyone else. The hegemon’s well-being necessarily carries some measure of well-being for other members of the international system, since its collapse would entail the collapse of the system as a whole. That is why, in its 2002 National Security Strategy, the George W. Bush administration could honestly argue that the world’s major powers were converging on “a single sustainable model for national success: freedom, democracy, and free enterprise.” These states were, the document continued, “on the same side—united by common dangers of terrorist violence and chaos.”
But as the hegemon’s dominance begins to fade, so, too, does this natural harmony of interests. Rising powers become increasingly unhappy with their global standing, with the international order’s rules and norms, and with the interests and values the order promotes. Community interests cease to overshadow individual ones. And as revisionist states grow in power, they develop the capacity to realize their aims. In the 2002 report, for example, the Bush administration depicted China as a team player, one that was “discovering that economic freedom is the only source of national wealth.” But by 2017, the U.S. National Security Strategy declared that China’s “integration into the post-war international order” was a failure, labeling China a “revisionist” power that wants to “shape a world antithetical to U.S. values and interests.”
Rising challengers are not the only revisionists: as the hegemon declines, it also becomes frustrated with the existing order. Many of the deals it made at the peak of its power no longer make sense. For example, U.S. policymakers from across the ideological and partisan spectrum have become frustrated with the transatlantic partnership. In the original bargain struck after World War II, Washington provided security to its European allies and vital economic assistance to their struggling postwar economies. In exchange, they mostly supported Washington during the Cold War with Moscow and enabled the United States to project power over the European continent. But once the Soviet Union dissolved and Europe became rich, it no longer made any sense for the United States to shoulder more than 70 percent of NATO’s defense expenditure. The alliance ceased to have a clear raison d’être.
It is, therefore, not surprising that many Americans are turning away from presidential candidates who embrace a muscular, expansive foreign policy. They see the compelling structural reasons to demand a shift. And so many of them have embraced a candidate who has called for global restraint, retrenchment, and narrow self-interest: Donald Trump.
During his first term as president, Trump proved that he was truly unique among modern U.S. leaders. Unlike any president before him in the post-1945 era, he was skeptical of treaties and alliances, preferring competition to cooperation. He defined the national interest to exclude things such as the spread of liberal values and military or humanitarian interventions. He did not view the United States as a divine intervener for the mistreated abroad. Instead, he shifted Washington’s focus to great-power competition and to regaining the United States’ global power advantages. He was, in other words, a true realist: someone who avoids idealistic and ideological views of global affairs in favor of power politics.
In Trump’s first term, these realist impulses were muted and sometimes stopped by hawkish national security staffers who did not share his vision. But having learned that personnel is policy, Trump will not make this mistake again. His next administration will, instead, result in perhaps the most restrained U.S. foreign policy in modern history.
The Republican Party is having an intense debate about international relations. The party’s traditional establishment is made up of neoconservatives and primacists who want the United States to exercise its power around the world and use its military capabilities to achieve many ends. For example, they support massive, continued U.S. aid to Ukraine as a means of sticking it to Russia and have wholeheartedly embraced the Biden administration’s framing of military support for Ukraine as a contest between democracy and autocracy. Trump and his allies, on the other hand, do not support more aid to Ukraine. They do not see geopolitics as a grand ideological contest. And unlike neoconservatives, they have a pronounced preference for U.S. allies paying for their own security. In February, for example, Trump declared that he would let Russia have its way with any European country that does not spend at least two percent of its GDP on its own defense. “If we don’t pay and we’re attacked by Russia, will you protect us?” Trump recounted a NATO country’s leader asking him. “No, I would not protect you. In fact, I would encourage them to do whatever the hell they want. You gotta pay. You gotta pay your bills.”
The traditional Republican establishment still retains substantial power. The party’s Senate leadership, for instance, is dominated by neoconservatives. Slowly but surely, however, the Trumpist camp is winning. It is doing so, most obviously, in primaries, where Trump and Trump-endorsed candidates continue to prevail. But polling suggests that Trumpist realism is also winning the hearts and minds of conservative voters. In a recent poll by the Chicago Council on World Affairs, 53 percent of Republicans answered “stay out” to the question “Do you think it will be best for the future of the country if we take an active part in world affairs or if we stay out of world affairs?” A similar number—55 percent—said the costs outweigh the benefits of maintaining the United States’ role in the world.
To most foreign policy elites, who view U.S. power as a normative good, this trend appears dreadful. But the former president’s “America first” agenda is an intellectually defensible, fundamentally realist program that seeks to ascertain and act on the United States’ national interests rather than the interests of others. It is born of an inescapable premise: the United States no longer has the power it once did and is spreading itself too thin. It needs to sort its essential national interests from desirable ones. It must devolve more responsibility to its wealthy allies. It must stop trying to be everywhere and do everything.
In his first term, Trump’s realist instincts were frequently thwarted by his senior national security advisers. But the former president’s inclination for restraint nonetheless shaped his policies. Trump avoided new military entanglements, began extricating the United States from its 20-year occupation of Afghanistan, and engaged adversarial states such as China, North Korea, and Russia in ways that lessened the possibility of conflict. He shifted the burden of paying for mutual defense to allies and away from American taxpayers. He talked tough as a means of pressuring other leaders and appeasing his domestic base. But he never acted like a neoconservative primacist. Even when it came to Iran, the country toward which he was most belligerent, Trump always pulled back from the brink of using significant military force.
In his second term, Trump’s realist instincts would find fuller expression. Trump will not completely turn Washington’s back to the world (contrary to the claims of his opponents). But he will likely withdraw from at least some current U.S. commitments in the greater Middle East. He will surely demand that wealthy allies in Asia and Europe pay for more of their security. And he will likely focus most of his attention on Beijing, concentrating on ways to outcompete China while avoiding military conflict and a new cold war.
Trump and his allies have also talked about the need to become less dependent on foreign sources of energy; they predict greater self-sufficiency would lead to U.S. job growth and decreased energy costs for American consumers. As president, Trump would likely follow through on this rhetoric by eliminating many current regulations in the energy sector, thereby making it easier for domestic oil and gas producers to drill. Critically, such a policy would make the Persian Gulf much less important to Washington. Over the last 50 years, every U.S. presidential administration has been forced by circumstances to spend a disproportionate amount of time, attention, and resources on the Middle East—in no small part to ensure the flow of oil. A United States that no longer needs to do so would be freed from having to care very much about Iranian-Saudi squabbles and would no longer need to maintain a significant number of U.S. troops in the Persian Gulf region. As the Biden administration’s experiences have shown, U.S. troops spread out across dozens of bases in Iraq and Syria are at risk of being attacked by Iran and its proxies.
The former president, of course, would maintain his belligerent rhetoric toward Washington’s adversaries, criticizing their depredations and acts of aggression. Such talk can be useful in reminding the rest of the world that the United States does not share many values with countries such as China, Iran, Russia, or even some U.S. allies, including Saudi Arabia—and that even a more transactional, realist United States would not stoop to the level of those countries. But Trump should not talk the United States into a new cold war with China or a hot war with regional competitors such as Iran. The Trump administration must hold other states accountable and extract the very best deals it can for the United States. But military conflict or prolonged periods of hostility are in no one’s best interest.
Trump, thankfully, has an impressive track record at avoiding the use of U.S. military force. This is not because he is more of a humanitarian than his predecessors but because he views world politics more in geoeconomic terms than geostrategic ones, and so he tries to conduct conflict via economic rather than military means. “I want to invade, if I have to, economically,” Trump said in 2019, when talking about Iran and its nuclear program. “We have tremendous power economically. If I can solve things economically, that’s the way I want it.”
This sentiment is deeply held by the former president. As far back as 2015, when all of Washington was under the influence of unfettered free-trade shibboleths, Trump warned about the dangers of economic dependencies, built up over decades of liberalization, that could be exploited for geopolitical leverage. (The United States relies, for example, on foreign countries for energy, medical equipment, semiconductors, and critical minerals.) He also emphasized the enormous power wielded by the United States in the forms of tariffs, sanctions, access to the dollar, and control over global economic networks. Once in office, he wielded American economic power, typically seen as a way to entice others to join the multilateral free-trading system, as a stick to punish those who suckered Washington during the 1990s and the first decade of the twenty-first century. “We are righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers, and families,” Trump declared at the signing of the interim trade deal with China. “It should have happened 25 years ago.”
As a conservative realist, Trump should be clearheaded about what really matters to Washington and avoid steps that might provoke military confrontation. Whenever possible, he should delegate responsibility for global problems to U.S. allies, leaving the United States to focus only on what is truly necessary for the American national interest.
Trump can start by focusing on China. Securing a relationship with Beijing that ensures American prosperity and does not increase the likelihood of war may be the supreme challenge facing the United States. Beijing and Washington are contesting global economic and political leadership, and there are multiple flash points between them. But none of these should lead to conflict. The primary point of military contention—the fate of Taiwan—does not require U.S. military intervention. The United States ought to arm the island so it can deter and hopefully defeat a Chinese invasion. But Taiwan is not a U.S. ally, and so Washington should not risk war with China to outright defend it.
In other areas, Trump can constrain China by relying, as he usually does, on trade restrictions. The Trump administration’s innovative use of export controls on cutting-edge technology has become the new tool of choice for twenty-first-century power politics. Unlike traditional balancing, which amasses power through arms and allies to offset a target’s military power, Trump’s strategy seeks to prevent, not counter, the further rise of a peer competitor. In the coming years, both the United States and Europe will want to ensure their firms avoid sharing certain technologies with Beijing and rely on non-Chinese suppliers for critical sectors, such as telecommunications and infrastructure.
Trump has an impressive track record at avoiding the use of U.S. military force.
But Washington can constrain China without launching a full-blown trade war, and so it should avoid issuing new tariffs, except in direct response to Chinese trade restrictions against American goods. U.S. officials should also avoid belligerent military initiatives that would risk an actual war between the two states. And in the event the countries do find themselves at risk of a hot conflict, the United States should push a coalition of Indo-Pacific countries, including Australia, India, Japan, South Korea, and Vietnam—whose aggregate power roughly matches that of China—to take the lead in containing Beijing.
With other U.S. adversaries, Washington should be even less involved. Russia may be militarily dangerous, but it is not an existential threat to the United States—a fact that its middling performance in Ukraine has made clear. It therefore makes no sense for Washington to continue writing blank checks to Kyiv, especially when Ukraine’s European neighbors are so rich. The United States should apply significant pressure to these countries to start paying for Ukraine’s defense, especially given that they are the states actually threatened by Moscow. Washington should, similarly, pressure South Korea to assume leadership in containing its poor, northern neighbor. The United States should even push its Arab partners and Israel to work together to hold Iran in check, so that Washington can withdraw most of its own forces from the Middle East.
The reality is that, after almost 80 years of U.S. leadership, the world has entered a transition phase from hegemonic order to a restored balance of power. Like all prior balance-of-power systems, this one will feature global dissent, disharmony, and great-power competition. Today, such dissent most obviously comes from China, Iran, North Korea, and Russia. Yet disruption of global stability during this transition phase comes not only from rising challengers but also from the hegemon itself. To forestall decline, the dominant power undermines its own system, which it begins to see as a drain. It grows increasingly unwilling to accept subsidizing the security of allies and the well-being of the world in general. It increasingly views trade policy not in terms of price optimization, efficiency, and corporate profits but in terms of whether it makes the country weaker or stronger, whether it helps the working class find and maintain good-paying jobs, whether it builds or destroys communities, and whether it causes trade surpluses or deficits. A hegemon in decline no longer believes that trade is free.
The United States has become exactly this type of weary titan, less able to honor external commitments and less interested in doing so, too. This explains the rise of Trump and his appeal to his followers, who disdain what they see as a corrupt governing class that puts the world’s well-being above their own country’s interests. It explains why his rise coincides with the rise of Chinese President Xi Jinping. Both men, though they have entirely different personalities, pledged to make their countries great again by upending the liberal world order. This should alert analysts to the fact that neither is responsible for the system’s demise. Instead, there are greater structural factors at work. Trump may still shock many in Washington, and he no doubt has a divisive personality. But his foreign policies are the predictable product of deeply impersonal forces.