When Empire becomes Liability!

For President Trump, U.S. empire, is not more then a liability. Empire just goes on making the country indebted and de-industrialised. While Trump does not want a system where U.S. spends public exchequer to protect others and get cheap credit in return. The credit, either must be changed to rent or military support is uneconomic from U.S. perspective. In response to his firm actions Trump will definitely face stiff resistance from pro-empire elites who still has huge logistics to dethrone or weaken Trump. External allies from EU, Saudi, Japan and India who feel threatened by rise of Russia, Iran and China will passively support anti-Trump lobby.

Introduction

Since, U.S. President Donald Trump assume his office, he surprise the world through his actions, when he turns his electoral rhetoric assertions into the reality. He practically dismantle the  TPP trade deal and ordered attack on Syria while meeting with Chinese President Xi Jing Ping. He backtracked on calling China currency manipulator. He ousted FBI Director Comey from office and landed himself into controversy. He contradicted his own National Security Adviser McMaster on payment for THAAD deployment in South Korea. Though, he endorsed NATO he clearly mentioned his NATO allies must pay their part. He has reduced aid for global women empowerment and even pulled U.S. out of the Paris Climate Deal calling it making U.S. economy less competitive. All these events created huge hue and cry both within U.S. and outside the world. This article may endeavor to find out the rationality working behind such actions of U.S. President. This article, eventually what he campaigned in election and how he and his associates look into present social-economic-political scenario.

What is Trump up against?

Trump like all common American felt that there is something rotten deep inside socio-economic-political structure of U.S. and people want alternative. Different historical records clearly show that Trump was against gradual de-industrialisation of U.S. that was taking place since late 1980s. Trump clearly opposed the global system where U.S. specialises in finance or asset trading based on debt while export its entire manufacturing base to cheap labour based Third World countries. This system was gradually making U.S. current account deficit country and indebted to foreign countries especially China, Japan, Saudi, etc. Trump’s constant opposition to different open trade deals even in 1990s make it clear he anticipated U.S.’s bait on finance and destruction of manufacture can be detrimental. Nobody paid heed to him since finance was giving profit. And the American elite class to whom this profit is pocketed by is the pro-empire elite class with whom Trump came into contradiction.

Reference Link: One can consult the author’s https://regionalrapport.com/2017/01/25/silk-road-system/.

Analysis of Trump’s Election Promises

After 2007 financial crisis, common Americans started to speak out against US’s finance led economy through movement like Occupy Wall Street. Trump got the chance. He very successfully attacked U.S. military involvement throughout the world. This is not because he hates military campaigns but because he understands that U.S. military involvement in different part of the world is a guaranty for securing constant credit to its economy from different beneficiaries across the world. The U.S. military protection to Gulf States secures their oil income as credit to U.S. economy, U.S. military protection to Japan is exchanged with credit. China uses its cheap labour to become global manufacturing hub and making U.S. its top export priority by providing the later cheap credits. U.S.’s role as global police in Iraq made China largest buyer of Iraqi oil since 2004 and also benefitted India.

This is how U.S. military sheds blood and U.S. economy provides demand for the entire world production while itself becoming indebted. For Trump things need to change. In campaign, Trump asked Japan, Gulf Arabs and NATO allies to pay for military services. This simply means Trump will no longer accept cheap credit for military services. In other words, Trump does not want a system where U.S. gives blood and get cheap credit in return. Either credit must be changed to rent or military support is uneconomic from USA’s perspective. Hence, for Trump, empire is a liability for U.S. Empire just goes on making U.S. indebted and de-industrialised.

Trump’s Move to keep Election Promises

Trump firstly talked to Chinese President Xi Jing Ping and made China his trusted partner. Trump agreed on free trade with China and even sent his loyal men to Belt-Road Initiative. By winning over China, he threatened Japan and South Korea by asking direct payment against U.S.’s military protection and fix their current account surplus with U.S. This is already paying dividends since South Korea got anti THAAD president Moon Jae-in. Japan is also thinking about more infrastructural investments and to compete with China’s Belt-Road Initiative with export earned money rather than just doling them out to US economy as cheap credit. Thus Trump is trying to deprive pro-empire elites from three of their chief creditors i.e. China, South Korea and Japan.

Trump aided Kurds in Syria against Islamic State forcing Turkey to remain with Assad since fall of Assad may entail breakdown of Syria which will only embolden Kurds to demand Kurdistan that includes parts of Turkey, Iraq, Syria and Iran. The U.S. help to Kurds actually forced Ankara to stay together with Damascus-Baghdad-Tehran. Hence, Sunni Arab rivals of Iran lost an important ally Turkey. Hence, pro-empire elites’ design to dispose Assad almost shattered.

Trump’s first foreign trip was Saudi Arab another chief creditor of U.S. financial order. Trump encouraged Gulf Arabs to form their own military alliance against their geo-political rival Iran. Saudi’s Yemen war and huge arms deal with Trump also indicate that Saudi and Gulf states may have to look after their own defence in the coming days. Saudi in return allowed oil price hike and help US shale oil companies to stay in business. The U.S. shale oil if survives will undoubtedly reduce US dependence on Gulf oil. Saudi’s power to set oil price will be reduced as well. Hence, Gulf becoming less important to U.S. China has already asked Saudi to sell oil in Chinese currency RMB and if this happens in the coming days then surely that will mark the end of petro-dollar arrangement that is the basis of cheap credit for US finance.

Securing alliance with China and Saudi, Trump is now emboldened enough to ask for more troops and payment from European NATO allies. Trump even pulled out of Paris Climate deal to make it clear he would no longer allow U.S to become less competitive in production for any global glory or maintaining empire. This forced German President Angela Morkel to claim openly that Europe has to look after them-selves and can no longer rely on U.S. Even Australian Prime Minister Malcolm Turnbull told the IISS Shangri-La Dialogue, an annual meeting of Asia-Pacific defence ministers and military chiefs, that countries in the region can no longer rely on great powers for their defence. In very few days Trump has made pro-empire elites devoid of many creditors including China and Saudi. Trump has also forced Turkey and South Korea to move against U.S. financial elites’ geopolitical ambitions. May be Japan will be added soon.

Reactions of Different Countries

China already reduced export/GDP ratio from 39% in 2006 to 20% in 2016 and gradually investing more in Belt-Road infrastructures rather than on U.S. treasury. China will be happy to see Trump selling geopolitical priorities and buying economic concessions. China will try to fill the gap to suit its purpose. Russia is happy to see Trump and Morkel speaking against each other and Ankara Tehran together. Saudi and Trump tacit understanding on oil price hike also good for Russian economy.

Saudi though not happy but seems to understand the new global reality that it has to look after its own protection. Already Saudi is waging war against Ansarallah Movement of Yemen. Saudi government is feeling threatened by not only Shite power of Iran but also by rise of radical Sunni uprising. Saudi-Qatar dilemma may be direct result of this anti-Saudi Sunni perspective that is threatening Saud. Saudi society being not much advanced in science and technology needs modernisation. Its modernisation drive can help radical Sunni organization to raise head against it. Allowing U.S. shale oil to stay afloat also reduces Saudi’s market share in the long run which will reduce its oil price making capacity. It can be said that Saudi government is moving into very tense time in future.

European powerhouses like Germany and France now have to spend more in defence and for that they need to grow economically. Since they are turning aged society, they need more migrants to grow economically. Thus more contradiction between natives and migrants are likely in the coming days in Europe. Chinese money and Afro-Asian labour may become future of Europe soon.

Japan and India may come closer and try to build infrastructures to compete China’s Belt-Road. But at the same time Japan being threatened by North Korea, need to be with China as U.S. will gradually disengage. Japanese PM Abe has already supported and praised Belt Road Initiative which shows Japan is preparing to tone down its anti China stand. India may become even more isolated with U.S.’s disengagement if it continues its anti CPEC position. India has huge potential of social chaos arising from weak global economy with huge young population, linguistic tensions between inland Hindi-speakers and coastal non-Hindi speakers, caste tensions especially in cow-belt, religious tensions, separatism, tribal area’s Maoist insurgency. So India can face tough situations ahead if internal and external problems are not tackled successfully.

Conclusion

Trump will definitely face stiff resistance from pro-empire elites who still has huge logistics to dethrone or weaken Trump. External allies from EU, Saudi, Japan and India who feel threatened by rise of Russia, Iran and China will passively support anti-Trump lobby. Trump definitely needs to help China’s Belt Road Initiative since that would not only cut the huge credit line for his anti-lobby but also because that would force India, Japan, Saudi, EU look for different alternatives too. In late 15^th century AD, Ming China disengaged from naval empire it created with help of legendary admiral Zheng Romans started pulling out of distant parts of empire almost a century before it fell.

Arabs just disengaged from huge caliphate as Turks took over. There is a need to understand that empire created by a certain society may be direct result of its demography and resource conditions. Once these material conditions change the rationality behind maintaining empire may be lost as well. Trump’s U.S. may be facing similar dilemma. In the coming days more frictions between trump and pro-empire elites of U.S. is likely and this may even lead to social chaos.

DISCLAIMER: The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the official policy and position of Regional Rapport.