On November 8th, 2016 the world was shocked as Donald Trump, a businessman, tv host and American elite became the 45th President of the United States. Trump became one of the most talked about and polarising figures on the world stage with American military might, diplomatic power and country relations in his hands. Almost three years into his Presidential term, the race has begun for candidates gunning for the presidency.
The 2020 Presidential election has been labelled by some commentators as a referendum on Trump himself with Americans having to decide whether or not to keep the 73-year-old business-mogul in power. This is because early polls show that Trump has over 80% of support for the Republican presidential nomination, almost making him a sure bet to face the Democratic presidential nominee.
The second round of Democratic Debates have shun some light on the Democratic front runners who are breaking away from the crowd. Early polls show former Vice-President Joe Biden, Senator Kamala Harris, Senator Elizabeth Warren and Senator Bernie Sanders are leading the pack in the close race for the nomination. Although the domestic policies of the various candidates differ, placing a greater emphasis on areas such as healthcare, it is the international impact of America changing its President that will matter.
So why do the 2020 Presidential elections matter for the world? Why should the average person on the other side of the world pay attention to what happens? Here are three reasons why you should keep an eye out in 2020 to see what unfolds:
- AN UNPREDICTABLE AMERICA
From Twitter tirades, a general lack of traditional diplomacy and a tendency to mispronounce country names, Trump’s Presidency has been anything but traditional. This has been a seemingly deliberate attempt by Trump to utilise his skillset as a “master dealmaker” and apply it to the international trade by facilitating chaos to destabilise his opponent get them out of their comfort zone and try to dictate the terms. According to Trump, this is the art of the deal, getting the upper hand through technique not substance. His impulsive, dramatic showmanship has begun to redefine America’s international role from leader and friend to unpredictable nation to be kept on bay. Trump himself said that “We as a nation must be more unpredictable” and he has delivered. From pulling the United States out of the Paris Climate Accords, pulling out of the Iran Deal, shifting the US embassy in Israel from Tel Aviv to Jerusalem, he has taken the US away from it’s traditional liberal cooperative stance to one that is inflexible and dogmatic.
Despite the controversy, this hard-ball style has kept the world relatively stable for the past few years. However, since the beginning of 2019 it is looking like Trump’s blatant hard-ball approach has caught up with him as tensions rise for the series of foreign policy conflicts that Trump has entangled the United States in.
Therefore with the upcoming Presidential elections, a change of government would spell a restoration to some predictability for states and institutions when dealing with the United States. If not predictability, a change of government would restore some cordiality and diplomacy to what has now become a personality-centred America.
2. TRUMP’S FIGHT WITH THE WTO
The World Trade Organisation is an organisation traditionally known for maintaining peaceful commercial relations for the past 70 years by regulating and keeping countries in check. Trump has famously showed a lot of animosity towards the WTO because he believes the organisation is broken and biased. This is not necessarily a new sentiment as the United States have been and continue to be concerned that certain countries such as China are reaping the benefits of maintaining a ‘developing/ emerging country’ label despite having the second-largest economy in the world. Although the concern is shared by various countries, the Trump administration has taken the less diplomatic route and publicly berated the organisation. This is highly unusual for a nation that was instrumental in creating the organisation 70 years ago.
The Trump administration has also taken to refusing to appoint new members to the WTO appeals court because they believe the court is overreaching its mandate (by opposing the levies the US uses to combat unfair foreign trade competition.) By doing this, the Trump administration has crippled the body as only three out of the seven judges remain and come December, two out of the three remaining judges must leave the court when their four-year term expires. This will leave only one out of the seven judges required to rule over the WTO appellate court. The European Union and Canada are attempting to prevent what is seemingly the slow destruction of the WTO appellate court by creating an alternative multinational investment court utilising the same rules as the WTO and retired appellate judges. The effect of this is that the Trump administration has nearly completely cut off the WTO’s ability to settle trade disputes amongst states.
What is somewhat hypocritical is that for an organisation that he claims is a “disaster” and “very unfair” to the United States, the US is still participating in filing complaints about the trade practices of the EU, Mexico, China and others with the WTO. Many have questioned Trump’s claims that the US is being treated unfairly as the US has brought the most amount of disputes to the WTO than another other country in the last 22 years and according to a report by the Trump administration itself, the US won a higher proportion of cases than the global average.
America, one of the founding fathers of the WTO has now become one of the greatest threats the organisation has faced. Trump has taken a less diplomatic more protectionist stance against international institutions that America itself helped create and facilitate. Therefore, for international bodies such as the WTO, a change in Presidency may lead to a change in the suffocating stance the United States have currently taken.
3. THE START OF THE END OF TRADE
Early last year trade tensions began to escalate when Trump imposed tariffs on Chinese solar panels, washing machines, steel and aluminium making select Chinese goods more expensive in the United States. The world watched as a swift, yet tentative peace was brokered with Chinese President Xi Jinping. However, this did not last long with the US slapping China with tariffs as well as heavy restrictions to Chinese- tech giant Huawei. This month has seen yet another escalation in tensions with Trump slapping China with a 10% tariff on almost all of the $300 billion worth of imports from China in his bid to make America more protectionist. China reacted by breaking the seven Chinese Renminbi to the Dollar barrier (a line that China had kept above since 2008’s Global Financial Crisis) allegedly to offset the effect of Trump’s tariff’s that were designed to hurt China. The possibility of a full-blown currency war has emerged where major central banks and countries including the United States could deliberately weakens their currencies as a flow on effect of this Trade War.
As worldwide protectionism begins to spread, Australia’s economy and diplomatic connections are at risk. Australian exports make approximately 20% of the GDP as Australian farmers and businesses depend on selling their produce to the rest of the world, specifically China. The cost of the US tariffs is spreading to Australia, a trading partner of China, as the Australian dollar has fallen to 68 cents to the US Dollar, a rate as low as it was during the Global Financial Crisis.
The tariffs are also likely to hurt other Asian economies such as South Korean, Vietnam, Thailand and Indonesia as their currencies are also likely to devalue. Both the Bank of Japan and the European Central Banks have stated that rate cuts and other measures will need to be implemented to bring down their exchange rates. The Bank of America itself has said that the odds of recession in the next coming year are greater than 30% as a direct result on the flow on effects of this Trade War.
However, what is clear is that these tariffs are intertwined with Trump’s personality and his personal style of business. This makes the importance of the impending elections vital as it could either lead to a de-escalation of the tension that has emerged or continue the trade war.
The impending 2020 elections will be monumental in determining the trajectory of the United States. Trump is not the first, nor will he be the last, protectionist President America has seen. However, we are living in the most interconnected world, Earth has ever seen. What happens during the 2020 elections will likely determine how the world navigates either post-Trump or in a Trump-kind-of-world.
