After reading through a review of Dilbert cartoon creator Scott Adams’ new book on the Trump influence, Win bigly, I thought about one of the many most recent issues the US president has raised.
If you think back even a short time, you’ll realise he raises new issues, or new ways of addressing older issues, one on top of the next.
Much of the media lampoons him, picks on him for airing outrageous lies, and there are those that are constantly updating their fact check pages.
What was your reaction to arming teachers instead of introducing gun control measures? Impractical? An expensive & overly complicated way of dealing with a problem? Avoiding the sensible solution that’s staring Mr Trump in the face?
Move to another recent issue: North Korea. This time it was Mr Trump doing the lampooning, calling North Korean leader Kim Jong-un Little Rocket Man. In one response, North & South Korea changed their relationship for the Winter Olympics, parading their teams as one, and the women’s hockey team was a united entry with a one-nation flag, uniform & song.
Move to a third issue: the wall along the Mexican border, which Mr Trump has said all along that Mexico will pay for. And, assuming it is built, you can bet Mexico will pay, one way or another.
As the book reviewer, Urbanophile publisher Aaron Renn, an urban analyst & Manhattan Institute senior fellow, put his finger on what both Trump & Adams were about, he quoted Scott Adams responding to celebrity statistician Nate Silver in August 2015 on the presidential election outcome (15 months before the event): “If I had to put a number on my prediction, I would say a 98% chance of Trump winning the whole thing. That is the direct opposite of Silver’s prediction.”
Scott Adams wrote in his 2015 blog article: “As I said in my How to fail book, if you are not familiar with the dozens of methods of persuasion that are science-tested, there’s a good chance someone is using those techniques against you.
“For example, when Trump says he is worth $US10 billion, which causes his critics to say he is worth far less (but still billions) he is making all of us ‘think past the sale’. The sale he wants to make is ‘Remember that Donald Trump is a successful business person managing a vast empire mostly of his own making.’ The exact amount of his wealth is irrelevant.”
Think back to the many Trump assertions, which Scott Adams said might be “technically wrong yet directionally correct”, and you get to another of his techniques, anchoring – “invariably drawing a flurry of media attention to ‘fact check’ and correct him – all the while drawing attention to the issues that he wanted to highlight.”
Tariffs, and real objectives
And so to last week’s tweet topic, trade tariffs. The world’s politicians have spent decades getting tariffs down, freeing the international movement of goods. Along the way there has been resistance – why could New Zealand not export more than a small quota of meat to the US? In the late 1960s, NZ Deputy Prime Minister & Overseas Trade Minister Jack Marshall (prime minister briefly in 1972, later knighted) spent more time in Europe fighting for NZ trade access as Britain prepared to join the EEC (European Economic Community), which eventuated in 1971.
In contrast to the silky negotiation of the urbane “Gentleman Jack”, the Trump message is that “trade wars are good & easy to win”. He’s saying the US has been too soft in past negotiations. The international opposing voices now are talking retaliation. Mr Trump has won the first round.
As with not accepting a human contribution to climate change, and the many other issues where he’s forced debate, Mr Trump will move the message on tariffs in the direction he wants. Opponents won’t be debating the fundamental issue for world trade of tariffs versus no or reduced tariffs, but the size of them and how to retaliate.
China, the other big trader, can’t walk away from the debate, but can trump Trump. Mr Trump has accused China of being a currency manipulator and has claimed the US has lost billions of dollars in trade with China.
The bets on reserve currency
The US will be betting that China & partners won’t assert their new-found influence at the IMF (the International Monetary Fund), where the BRICS nations (Brazil, Russia, India, China & South Africa) have jointly acquired the veto power previously held only by the US. At stake is the US greenback’s role as international reserve currency, and the tariff confrontation might be the event that ends that status (which has, in any event, been reducing).
I sense that China’s administration lost control of the country’s big corporates, which mostly have state or party links, and has struggled to regain its composure. On the way back to control, the Chinese government has clamped down on families who have been exporting money to buy foreign assets (with no apparent appreciation of how their efforts might affect values in those foreign markets).
But holding assets in western economies is really a nod to the past; the strength of a Chinese future is more likely to lie in the trade relations it wants to build along its new Silk Road routes, the overland track through central Asia to Europe and the sea route to Africa, and in growing less belligerent relations with other Asian nations.
The international currency issue has a way to run. According to the IMF’s latest quarterly assessment, for the December 2017 quarter, 54% of world foreign currency reserves were held in $US, up from 49% a year earlier. However, China & Russia have agreed a trade deal using their 2 currencies, and the BRICS position at the IMF could result in the fund’s special drawing rights being elevated ahead of the greenback.
The ramifications of these changes are hard to envisage, but 2 things are clear: Barriers will be erected, and currency contests will become more hard-nosed.
Friday Trump tweet: “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”
Scott Adams’ blog, 13 August 2015: Clown genius
Aaron Renn review in City Journal, 27 February 2018: Trump the clown genius
Reuters, 3 March 2018: ‘Trade wars are good,’ Trump says, defying global concern over tariffs
11 February 2018: Spitting the dummy, and changing the international order
31 January 2017: Whose waggling finger should NZ follow?
16 January 2017: Trump rolls the dice and tells all the players what to do
Attribution: Links above.