The US has an intractable puzzle, and it looks as if US President Donald Trump is trying to solve it at the expense of the rest of the world. There are a few exceptions, but their positions as countries that are friends or foes of the US could change overnight.
President Trump’s disruptions continue to broadcast live from the White House. He is “Coming to You Almost Daily from the Oval Office,” writes The Straits Times in Singapore. Since taking office, Trump has held 34 sessions with reporters, 16 of which were live in the Oval Office. This is “nearly three times as many as the beginning of Mr Trump’s first term, when he held just five press meetings in the Oval Office,” the newspaper said.
The subjects of these sessions have varied. One might be about the protectionist tariffs that Washington is imposing on imports from friends and foe alike; the next might be about his conflicting approach to the catastrophe and suffering in Gaza and his reprehensible and illegal “bids” to solve it.
Recently Trump stunned the Europeans with his overture for direct talks with Russia, leaving them scrambling for a seat at a negotiating table they were not invited to. The next moment Trump might be explaining an executive order to switch from paper to plastic straws, because the paper ones “don’t work. They break. They explode if something’s hot. They don’t last very long.”
Trump has a remarkable ability to communicate with his audience. He draws on his experience as a reality TV host and his sense of the current American mood, which favours his style and approach. This was one of the main reasons for the success of his electoral campaign, which brought him back to the helm of the world’s largest economy, largest military, and most advanced technology.
What is the American dilemma? “Power Abroad Comes with Dysfunction at Home,” says Micheal Beckley in the title of an article in the latest issue of the US magazine Foreign Affairs.
The US accounts for a quarter of the global economy. Its economy has grown to twice the size of the Eurozone since the global financial crisis in 2008. As Beckley reminds us, in the mid-1990s, the Japanese were on average 50 per cent wealthier than Americans, whereas today the Americans are about 140 per cent richer than the Japanese.
The US benefits from its growing population and its immigrants. It has vast and resource-rich land, along with vast amounts of energy, water, and food resources. It has resilient markets that can bounce back quickly from crises and shocks, even if the US caused them, as was the case with the 2008 crisis. While the US economy recovered and resumed growth after this event, Europe continued to reel for some time, and it is still trying to cope with some of its economic, social, and political fallout.
This is not to suggest that the US economy is problem-free, what with its record high debt levels, below standard productivity, and the highest inflation rates in 40 years. Let’s not forget the havoc that was wreaked in its markets by the swings in monetary policies necessary to address the impacts of the Covid-19 pandemic and the delays in monetary tightening to contain the inflationary impacts of the subsequent stimulus packages.
However, the biggest problem in the US economy and in US society is inequality in income and wealth. Stark disparities are to be found between struggling rural communities and urban prosperity and between the generations, genders, and ethnic groups. There are disparities in opportunities for social mobility due to disparities in skill sets and qualifications.
The US media outlet Bloomberg warns that the current approach to the inflation crisis in the US overlooks its varying impacts on different parts of society. The middle class is in a dire state, with its real income growth expected not to exceed 0.3 per cent annually until mid-century, according to available data. At the same time, one per cent of the US population will account for a quarter of national income, while the richest 0.01 per cent will capture a quarter of that wealth.
This helps to explain the current resentment and anger in the US, which Beckley sums up numerically in his article. Citing a recent survey, he writes that “two-thirds of Americans believe the country is on the wrong track, and nearly 70 per cent rate the economy as ‘not good’ or ‘poor.’ Public trust in government has fallen by half, from 40 per cent in 2000 to just 20 per cent today. Love of country is fading, too, with only 38 per cent of Americans now saying patriotism is ‘very important’ to them, down from 70 per cent in 2000.”
As was mentioned in the first article in this series, when national economic indicators plummet, populist politicians set their crosshairs on international trade and immigrant workers. Trump’s chaos and confusion has targeted both. However, the adverse effects of these policies, such as rising labour costs, will most likely aggravate the rising inflation in the US and its declining competitiveness.
If domestic straits propelled the author of executive order disruptions back into the White House in last year’s elections, Washington’s fear of international decline is driving other disruptions. These are also backfiring, harming US pre-eminence by eroding trust among the country’s political allies and economic partners.
One cannot not be struck by the proliferation of commentaries coming out of countries that have historically been in the same geopolitical camp as the US about raging trade warfare and possible ways to harm US goods, services, and intellectual property with minimal adverse effects on their own economies as a result.
As for the developing countries, they will suffer the most from the negative repercussions of shrinking growth, disruptions in international trade, decreased investment, higher financing costs, rising dollar exchange rates, and reductions in development aid.
No wonder we are hearing the famous aphorism attributed to the ancient Greek historian Thucydides so much today – “the strong do what they can, and the weak suffer what they must.”
This article also appears in Arabic in Wednesday’s edition of Asharq Al-Awsat.
* A version of this article appears in print in the 20 February, 2025 edition of Al-Ahram Weekly
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