A new era of ‘Trump card’ diplomacy

By Dr Marlene Attzs, Economist.

Email: marlene.attzs@gmail.com

Many a Trinbagonian keenly followed the 2024 US Elections shenanigans. From star-studded conventions across America, from Kamala Harris’ Democratic camp to the “America First, World second” mantra espoused by the Republican candidate, now President-elect, Donald Trump.

The dust has now settled on the US Presidential elections and the American voting public has spoken–Donald Trump would get a second chance to ‘Make America Great Again’–the campaign slogan that catapulted him to win the US elections in 2016.

A new stint for Donald Trump as President of the United States would have profound implications across social, political, and economic spheres globally. Trump’s leadership style, policies, and stance on various international issues have historically generated polarised reactions.

His ‘second time around’ would likely reinforce some of his previous approaches, affecting global dynamics across multifaceted areas, with implications for us in the Caribbean.

Politically, a new Trump presidency would certainly reinforce his ‘America First’ doctrine, focused on reducing US involvement in international alliances and commitments, promoting nationalism over globalism.

His re-election could strain international organisations such as the United Nations, NATO, and the World Health Organization, as Trump has unapologetically expressed scepticism about these institutions in the past.

President-elect Trump’s approach to international agreements, such as withdrawing from the Paris Agreement on Climate Change during his first term in office, demonstrated his willingness to prioritise US interests at the expense of international consensus.

If he continues this approach in his second term, it may lead to a fractured geopolitical landscape, where alliances are more fragile, and cooperation on global issues, such as climate change and human rights, becomes more challenging.

Economically, Trump’s return will bring back protectionist policies that prioritise US interests. His initial presidency saw the imposition of tariffs on imports, particularly from China, as part of a larger global trade war intended to boost US manufacturing and reduce the trade deficit.

While campaigning, he committed to reinstating these policies which surely could affect global trade flows, particularly between the US and key trading partners like China and the European Union.

While this move may seem good for US manufacturers, such protectionist policies could impact the global economy by disrupting supply chains, increasing costs for businesses reliant on imports, and creating economic uncertainties in global markets.

From a financial market’s perspective, Trump’s approach to deregulation and tax cuts could create a favourable environment for US businesses, particularly large corporations. His first administration’s tax reforms provided significant benefits to businesses, and a similar strategy could lead to a stock market boost. However, this focus on corporate interests, could come at a price of income inequality, as benefits primarily accrue to high-income earners and large corporations rather than the broader population, where support is still needed after Covid-19 led to widespread economic fallout.

We in the Caribbean are not immune to the impacts of ‘Trump Card’ diplomacy. Given the Caribbean’s close economic, political, and social ties to the US, a Trump administration could impact areas such as trade, tourism, immigration, and energy.

For example, Trump’s ‘America First’ policy may mean that the US becomes more inward-focused, potentially revisiting trade deals and imposing new tariffs on imports. This shift could impact Trinidad and Tobago and other Caribbean nations, especially if the US imposes tariffs on goods exported from the region. Trinidad and Tobago’s exports, such as petroleum products, could be affected if there is a shift in trade priorities, potentially creating challenges in maintaining US market access.

During his first term in office, President Trump reduced foreign aid, and this may also feature in his second term, leading to less financial assistance for the Caribbean.

Several Caribbean nations rely on aid from the US for development projects, disaster recovery, and health programmes. Reduced aid could impact regional development and increase dependency on other international partners like China, with whom the Caribbean has been strengthening ties.

Given his unenthusiastic attitude toward China, President Trump is likely to frown on the growing relationship between China and several Caribbean countries, including Trinidad and Tobago.

Global energy dynamics also will be impacted. President Trump’s support for US fossil fuel production and reduced regulations on energy could affect global oil prices and the competitiveness of T&T’s energy exports.

If the US increases its own production, it could contribute to lower global oil prices, which would impact Trinidad and Tobago’s revenues. Additionally, our region is extremely vulnerable to climate change, facing rising sea levels, hurricanes, and other extreme weather events.

Trump’s disinterest in the Paris Climate Accord and potential disengagement from international climate agreements could slow global climate action, increasing the climate risks faced by Caribbean nations.

It’s no secret that Trump has had an anti-immigrant perspective which, if continued or intensified in his second term, could impact Caribbean communities in the US and potentially increase deportations to the region. Stricter immigration policies also could impact Caribbean nationals’ employment opportunities in the US, potentially reducing remittance flows which some Caribbean families rely on heavily.

Finally, President Trump previously imposed stringent sanctions on Venezuela, affecting not only Venezuela’s economy but also that of neighbouring countries. Many of Trinidad and Tobago’s energy hopes are linked to the Dragon Gas deal with Venezuela, so we should be very concerned about what, if any sanctions, the US may wish to impose on Venezuela during a Trump-led administration.

The deal is now done and dusted, and Donald Trump will be US President for the next four years. For us in the Caribbean, we may need to refocus on strengthening alliances within the region and adapt to the ‘US first’ new world order that comes with the ‘Trump Card.’

This is a time to recalibrate our own social and economic policies to ensure our long-term stability and development.

That’s just my point of view!

Photo by History in HD on Unsplash