Friday, 11 November 2016

Against all odds Donald Trump becomes US President

Donald Trump won the race to the White House, becoming the 45th President of the United States. © Flickr Michael Vadon

On November 9, the world woke up to see Republican tycoon Donald Trump becoming President-elect in the United States after beating rival Democrat Hilary Clinton.

“It is time for us to come together,” said the 70-years old businessman in his victory speech. “Now it is time for America to bind the wounds of division, have to get together. To all Republicans and Democrats and independents across this nation, I say it is time for us to come together as one united people,” Trump continued in a rather modest and inclusive speech compared to his hatred narrative during the presidential campaign. Following the ceremony tradition, the Inauguration Day will be on January 20 2017, when Donald Trump will start official functions.

After 15 months of debauchery and a decadent presidential campaign coined by personal accusations and very little policy talking, the American people seem to be ready for something disruptive after voting against the establishment. “His victory is a humbling blow to the news media, the pollsters and the Clinton-dominated Democratic leadership,” wrote the New York Times.

What seemed to be a neck and neck race, turned out to be an ugly defeat for Clinton, beaten in the Electoral College. Noteworthy however is that Hilary won the popular vote against Trump. Still, the fight for the White House couldn’t be worse for the Democrats who also failed to retake the Senate and to grant a majority in the House of Representatives. With the Congress – the US legislative branch - dominated by the Republicans, Donald Trump will seize more power than his predecessor Barack Obama. “It gives them control of the Supreme Court for years to come, a huge issue for the conservative base. When combined with a favourable map in 2018, Republicans could be on the verge of building a majority that could last well into the next decade,” wrote Politico.

Nevertheless, during the campaign Trump managed to alienate several Republicans due to his insensitive behavior. Former Secretary of State Colin Powell, Mitt Romney, Jeb Bush and Mike Murphy are just but a few of the conservatives that turned against Trump. With GOPs opposing the President-elect, chances are that Trump might see his legislative power more limited.

Talking on Trump’s possible policy agenda on Bloomberg Surveillance, Dan Glickman, former US agriculture secretary under Clinton administration (1985-2001), said that even with a Congress dominated by the Republicans, he has faith on the United States’ checks and balances, which are in place to avoid absolute power therefore limiting the influence of the three branches of government.

How did this happen?

To say that US citizens are blatantly weary with the enrooted system is an understatement. Trump was elected under the promises of combating inequalities by dropping taxes for families and companies and creating jobs for millions of Americans. The classic populist appeal strategically made to attract dissatisfied segments of the population. “The gap between the fortunes of elites and those of the rest of the public has been growing for two generations, but only now is it coming to dominate national politics,” wrote the American political scientist Francis Fukuyama.

On the other hand, Trump sparkled countless controversy after his racist comments blaming the Mexicans of being  “criminals” and “rapists” (even though he “assumed” that some of them are “good people”) and pledging to build a wall in the Mexican border. The Democrats thought they had nailed it after Trump’s bohemian and misogynist behavior was flagrantly exposed in the media, but still, it wasn’t the last straw for Donald Trump.

In addition, war fatigue of the Bush years and Hilary Clinton’s lack of credibility were also likely to have contributed for the general anti-establishment feeling. During the campaign, Hilary’s wrongdoings as Secretary of State and her close ties to Wall Street were repeatedly exploited by Trump, who conveyed the image of a “crooked” and “corrupt” woman. Indeed, during the campaign, Trump threatened to take judicial action against Clinton and according to the Financial Times, the future US President does not rule out that possibility. It seems hard to believe though, after his “sincere” words of recognition for the service Hillary has done to the US. “She fought very hard. Hillary has worked very long and very hard over a long period of time, and we owe her a major debt of gratitude for her service to our country,” Trump noted during his speech.

Finally, social media and Wikileaks played a major role in this odd presidential campaign. Wikileaks editor-in-chief Julian Assange damaged Hilary’s crusade after releasing a series of harsh evidence of her political conduct - such as the content of the emails scandal or her role during the Benghazi assault. Assange, who is exiled in the Ecuadorian embassy in London since August 2012, perhaps strategically or not, seized the presidential campaign to publicly slash Hilary’s reputation. When Assange’s allegiance to Donald Trump was questioned by the media, the Australian journalist denied being fond of Trump: “You’re asking me do I prefer cholera or gonorrhea?” he questioned referring to both disliked candidates Trump and Clinton.

What can we expect from this outcome?

While most US citizens are worried with Trump’s future domestic agenda, EU citizens and beyond are apprehensive as to his future foreign policy. Described as entirely unfit for the President’s role, the unpredictability of Trump’s election is the cause for the generally installed anxiety. Trump is pictured as an irascible man with a very bad temperament, a fickle businessman who constantly changes his mind, who casted very depreciative comments towards women and shows very little compassion for the immigrants’ crisis. “After Brexit and this election, everything is now possible,” Gérard Araud, the French ambassador to the United States, wrote on Twitter. “A world is collapsing before our eyes.”

Overall, Trump poses considerable threats to the world order. During his rambling speeches, the mogul put the US’s relations with NATO at stake, demanding its members to pay for the defense services given by the US. He vowed to scrap the Paris climate change deal and pledged to renegotiate the nuclear deal with Iran. Moreover, Trump has been against Obama’s stance in Iraq and Syria. But will he accept Russian intervention in the region? Crispin Blunt, chairman of the foreign affairs committee in Britain’s House of Commons, said, “We are plunged into uncertainty and the unknown.”  The dark side of the story continues to be immigration and Trump’s harsh ideas of curbing it with the construction of a wall in the Mexican border. Will this be a physical wall or will Trump convert his idea into a metaphoric wall meaning more border patrols and increased surveillance?

Nevertheless, the year 2017 will see elections in France, Germany and the Netherlands. Fears loom as whether Trump’s recent election will strengthen the populist voices beyond seas. The right-wing parties embodied by French Marine Le Pen leading the Front National, the Alternative for Germany (AfD) and the Dutch Party for Freedom have shown particular joy for Trump’s triumph.

So far, markets seem to be responsive

For investors, Trump’s victory means driving through unknown roads. Fears of market disruptions were subject of speculation throughout the media before the closing electoral result. Yet, according to the Financial Times, “Investors display calm rather panic on Trump win.” Donald Trump’s anti-trade stance was one of the reasons of unsteadiness amongst investors. Nevertheless, Trump’s victory speech as President-elect was more comprehensive and in a way, it seemed to calm down the financial markets. At least for now.

Speaking on Bloomberg Surveillance, Erik Nielsen from Unicredit Group Chief Economist joined the “wondering club”: “It is unpredictable to know what to expect from a Trump presidency,” said Nielsen. “Volatility and growth might be part of the next 6 months because people are nervous about what is going to happen,” he added. However, Nielsen confessed that the market reacted less severely than he thought it would.

On the aftermath of the election, Bloomberg reported, “US stocks surge as banks, drug makers rally amid Trump victory”. Lowell Yura, head of multi-asset solutions for BMO Global Asset Management in Chicago said “our base case is we’re more likely to see a more moderate president than we saw as a candidate and the market’s agreeing with that.”

Alex Dryden, Global Market Strategist, JP Morgan Asset Management, discussed on CNBC what might happen when Trump enters office: “I think we need a bit of clarity from president-elect Trump about what he’s actually going to do when he steps into office. There’s been an awful lot of rhetoric in the campaign leading up to this with very little detail on actually policies that he will implement.” Dryden raised the question of the Republican-dominated Congress and whether that means Trump will manage to pass legislation as he pleases. “The other question to ask is whether or not his policies will actually be able to make their way through Congress,” Dryden added.

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