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Trump’s populist triumph will sharpen global political and economic divides

By Patrick Smith
Posted on Wednesday, 9 November 2016 14:12

For the rest of the world it, signals the biggest reversal in US backing for multilateral institutions and trade liberalisation for 50 years. Within minutes of the announcement of Trump’s victory, Gérard Araud, France’s ambassador to Washington, tweeted: “The world is coming apart before our eyes.”

Trump’s campaign promises to cut US contributions to the North Atlantic Treaty Organisation and encourage Japan and South Korea to build up nuclear arsenals now look like serious reality. It could mean a US withdrawal and ceding a zone of control to China, its strategic rival. It will doubtless shake regional alliances in the Pacific.

China’s President Xi Jinping and his central committee will have to review their military and commercial strategies. Already hit by slowing global trade levels, China faces the prospect of Trump’s nationalist trade policies sharply cutting back US imports of Chinese manufactures.

As in the 2008 financial crisis, falling US imports will sharply cut Chinese demand for natural resources from Africa, Asia and Latin America. That means global commodity prices could fall even further in the current bull market.

Equally, Trump’s criticisms of US military cooperation with the Iraqi government’s offensive against the Islamic State rebels’ occupation of Mosul looks set to roil the Middle East. Likewise, Trump’s demands that the US pulls out of the internationally agreed anti-nuclear deal with Iran would unpick more than a decade of tortuous negotiations and raise tensions again.

Trump’s threats to pull the US out of the World Trade Organisation could deal a final blow to multilateral trade deals.

Having rubbished the science behind global warming, Trump is committed to pulling the US out of the global climate treaty, sealed in Paris last year, as well as a bilateral deal with China on reducing carbon emissions.

He is also determined to renegotiate the North American Free Trade Area with his shell-shocked neighbours: Mexico’s President Enrique Peña Neto and Canada’s Prime Minister Justin Trudeau.

Congratulatory telegrams and social media messages to Trump from the likes of Russia’s President Vladimir Putin and Hungary’s Viktor Orban – together with right-wing demagogues such as France’s Marine le Pen, the Netherlands’ Geert Wilders and Britain’s Nigel Farage – tell their own story. The Trump victory will be a tremendous help to right-wing forces across Europe, especially those fighting national elections next year in France, German, Italy and the Netherlands.

Authoritarian leaders and populist politicians have got the biggest boost imaginable from Trump’s elections, and the liberal democratic view of the world has been given the harshest reality check.

First out of the blocks from Africa was Egypt’s President Abdel Fattah Al-Sisi, who congratulated president-elect Trump and said he looks forward to a new era of closer cooperation and coordination between their two countries.

That is a remarkable reaction in the wake of Trump’s initial pledges to impose a temporary ban on all Muslims entering the US, which he has now been modified to a process of “extreme vetting”. Alongside that pledge is a promise to set up enforcement teams to deport what Trump says are more than 10 million illegal immigrants in the US.

Early reactions to the Trump victory on the streets of Johannesburg, South Africa, were almost nonchalant. “It won’t affect us much […] We have our own problems to deal with,” said a newspaper vendor in the Rosebank suburb.

Mzi, a Gauteng-based businessman and a director of a state-owned company, reinforced the point: “A lot of us here are beginning to see what’s going in Western democracies as a charade.”

Although South Africa’s rand fell by 4%, as part of the wider turmoil in global markets following the Trump victory, Mzi said the effects on African economies would be limited: “African countries, especially South Africa, have to restructure our economies, get serious about production […] whatever happens in the west and the rest of the world.”

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