The Top Down Revolution
Executive power, unleashed.
Commercial Implications: Trump is planning a truly revolutionary presidency. This will impact every single aspect of life in the West, and the conflict with China.
On his first day in office, Trump issued the following executive orders:
America First trade policy. Trump ordered a study into how to implement an External Revenue Service, intended to collect tariffs and address the US’ trade deficit. The administration will also investigate, and likely retaliate against, any trade practices it deems unfair. The USMCA trade agreement will also fall under review, with the aim of amending it in the US’ favour. This will likely tie into Trump’s ambition to annex Canada - or at least force it to fully align with the US - and control the border with Mexico. Critically, the executive order includes a clause requiring a review of unfair exchange rates - clearly aimed at China but also possibly Japan and Europe. These are the opening shots in a renewed trade war that will accelerate the de-coupling of Chinese and American supply chains. On the other hand, Trump decided to delay shutting down TikTok, likely in the hope of negotiating this separation.
Designating the cartels as terrorist organisations and shutting down the border. Trump set out plans to deploy the military to the border, and to deal with the cartels using military force. This will trigger a wave of assassinations and terrorist attacks from the cartels. Note that the cartels should be thought of as insurgent groups, not merely as criminals. Mexicans in American border states who have strong family links to northern Mexico, and, especially, poorer Mexicans in northern Mexico, are broadly supportive of the cartels, as the cartels provide various services in lieu of the corrupt Mexican government. Trump also ended birth right citizenship for illegal aliens and temporary visitors.
Allowing the president to dismiss senior federal personnel at will. The Trump team believes this is required to get rid of the institutionalised group-think and liberal interventionist bias, as we explained here and here. This places Trump in open conflict with civil servants who had refused to implement his policies in his first term. Trump also revoked the security clearances of officials who had falsely claimed that the highly incriminating Hunter Biden laptop was Russian disinformation, and authorised issuing clearances for his allies. This is intended to speed up his team’s consolidation over the levers of power, and, critically, to permit policy turnarounds that would be unimaginable under another administration.
Side-lining the environmental movement. Trump withdrew from the Paris Climate Accords, again. He also ended the electric vehicle mandate, suspended offshore windfarm leases, and removed restrictions on drilling for hydrocarbons.
Pardoning January 6, 2021 protesters and rioters and strengthening the right. Trump pardoning the rioters is an attack on the Democratic Party and the legitimacy of the media. It is also part of a normalisation of political violence in America from the right, following the normalisation of political violence from the left during the BLM and George Floyd riots. Trump ordered an investigation into actions by the Biden administration that infringed the right to free speech, and that the federal government end all censorship. (Censorship in the US is outsourced to private entities that work closely with media and social media, rather than being done directly). Our view is that ending censorship will significantly strengthen the conservative movement, as the left relies on fundamentally false assumptions about reality.
Various measures to affirm the reality of sex. The hallmark of tyranny is that speaking the truth is a crime.
Ending sanctions on Israeli settlers and halting funding to UNRWA.
Requiring buildings to be beautiful.
Implications
These executive actions show that Trump in his second term will be the shibboleth that the liberal consensus imagined in his first term. Trump has learned that he cannot reach common ground with the mostly liberal civil service and media. He believes he must therefore impose his will.
Each of the above executive actions will be challenged in the courts. However, Trump stands a good chance of winning these challenges: the Supreme Court of the United States (SCOTUS) leans towards him. There is a strong chance that older conservative judges will retire during Trump’s term, allowing him to appoint younger and even more conservative replacements.
Trump will continue with full scale support for Israel. His aim is to dissolve the Palestinian question, it seems. Meaning that, perhaps, his imposition of a ceasefire is intended to review, reassess and relaunch the war later.
Congress will strongly resist Trump’s attempts to break the establishment consensus, especially on foreign policy. Although the Republicans control both houses of Congress, a large part of the Republican establishment still wants Trump to fail, as discussed below.
President Irrelevant
We had said, in the piece above, that a president’s foreign policy options are truly restricted. That said, since Congress is the least popular part of government, and since Trump holds the threat of “primarying” his rivals (supporting alternative candidates before the mid-terms), he may be able to impose his will.