Real conflict, minimal change: why Trump’s radical moves are more bark than bite

RU

Champion of the wronged and the aggrieved

While Donald Trump's return to the White House signals a right turn in American society, the magnitude of this shift should not be exaggerated. The scale of Kamala Harris' election loss was not all that significant. Trump may have won in each of the swing states, but Harris trailed him by only 1.5% in the absolute number of votes. In the 2020 election, fewer Americans voted for Trump, but significantly more voted for Biden. In other words, Trump's result is not backed by any sort of incredible mandate. The schism in American society remains.

As a natural-born populist, Trump has managed to build a coalition of the wronged and the aggrieved. To conservatives, he made promises to fight diversity, equity, and inclusion (DEI) programs. To those dissatisfied with the economic status quo, he promised to create jobs and lower prices. Paradoxically, his program appealed to white conservative men, but also women, African Americans, and Hispanics alike.

The unifying factor was what Trump called at his inauguration “exceptionalism” — American exceptionalism — and the MAGA ideology should now be taken literally, as a quest to restore America's status as a great power. What Trump is effectively saying is, ‘Let's make sure we can dictate our rules to the world in our own interests. We will not lock ourselves within our borders. We will overhaul the international order to suit ourselves while telling our present allies what to do, how to do it, and how much they should pay for it — out of their own pockets.’ This part of his electoral agenda appealed to a fairly large segment of Americans, even if they still lacked a clear idea of what awaited them as a result. At the outset of the campaign, no one was promising them Greenland or the Panama Canal.

The threat of a potential civil conflict had Trump lost the election has given way to new challenges. The measures to “restore America's greatness” announced by the president are rife with new controversies, primarily between the federal center and the states.

Migrants: Conflicts with states and courts

Trump seeks to decimate immigration, but Democratic states and administrations of major cities are likely to resist this policy. If Trump presses this issue in the face of opposition from local authorities, the American political system may develop centrifugal tendencies. According to some prognosticators, the states will take more initiative, while the center will hinder their efforts in every possible way.

In the U.S., migration policy is determined by the federal center, but state governments are responsible for its execution. Here, local administrations have room for resistance. For example, the city governments of Chicago, Las Vegas, and New York have officially refused to assist the U.S. Immigration and Customs Enforcement (ICE) in deporting illegal immigrants.

The independence of local and federal courts must also be reckoned with. Trump's executive order on not recognizing citizenship for the U.S.-born children of illegal immigrants was immediately challenged in a New Hampshire court, and 22 Democratic states have already joined the lawsuit. Another line of tension may arise over subsidies for migrant integration programs. The clash with migrant communities and human rights defenders will also be loud.

Trump's drastic steps to regulate migration could also hit the labor market, primarily the tertiary and agricultural sectors, which are always hungry for low-cost and low-skilled workers. Labor shortages in agriculture will push up food prices and cause dissatisfaction among American consumers and producers.

Environment: Tesla wins, Alaska loses

On the environmental front, Trump is repealing President Biden's Green New Deal. He is pulling the U.S. out of the Paris Climate Agreement again and plans to increase oil production and eliminate subsidies for electric car purchases.

Elon Musk and Tesla won't be hurt by the removal of subsidies for electric cars, as the company has already claimed a sizable market share. However, many new players have entered the field more recently, and if they were disproportionately dependent on federal support, canceling subsidies would only play into Musk's hands.

As for oil, the start of extraction in Alaska's wildlife refuges, authorized by Trump, could shake up the market. If prices plummet, shale production will suffer due to higher production costs. In addition, OPEC+ countries may also drive up production and further depress prices in response to Trump's measures. In any event, Russia will probably be among the first to feel the impact of these developments.

Additionally, the president will eliminate some of the green subsidies and investments put in place by Biden, thereby slowing down the green transition. However, the shift to more sustainable production and consumption will not come to a complete halt thanks to the fact that many individual states have already adopted this agenda and set emission reduction targets. California, which is experiencing the effects of climate change more substantially than others, will lead the way in banning the sale of vehicles with internal combustion engines — starting in 2035. Washington, D.C., and New York City have set similar goals.

Gender: No one will notice the change

Immediately after taking office, Trump signed an executive order enshrining a binary definition of gender — that is, only male or female. However, this decision is unlikely to have any meaningful effect. Indeed, Trump has rescinded certain gender equality measures in government agencies. However, the regulatory framework for gender equality is already well developed, including at the state level. This is reflected in legislation on safe school environments, protection against discrimination in different areas, and laws against hate speech.

Public schools, which are predominantly funded and partly regulated by local authorities and municipalities, have a long-standing policy of tolerance and equality. Trump's reach is limited by the very system of American federalism. Major cities and Democratic states are already living in the new reality. Admittedly, more conservative Republican states may feel differently, but even there, progress toward gender equality is unlikely to be halted, especially in large urban areas.

Prices and tariffs: Delayed effects

Trump is adept not only at picking fights but also at avoiding them. This is his political mindset in a nutshell: he tends to make proactive statements and unexpected decisions but can show flexibility in reacting to developments in the market, country, or his entourage.

However, many of his decisions may have consequences that may outlive his presidential mandate. Such was the case with the economic relief measures enacted during the COVID-19 pandemic. Admittedly, Biden backed and strengthened all of these measures, and macroeconomic history shows that they were generally appropriate, even if they stoked inflation in 2022-2023. America came out of the pandemic slump fairly quickly, yet Biden was the one to be stuck with the blame for the inflation hike — despite today's inflation rate coming in at only slightly above pre-pandemic levels.

We can assume that if Trump fulfills his threats of imposing restrictive tariffs on a particular category of goods, this will soon affect domestic prices. Trump will have to react — and he will have enough room for maneuver. He suspended duties on Canadian and Mexican goods as promptly as he had imposed them.

However, Republican circles are now more cautious about raising tariffs, realizing that this could hurt the domestic market. Eventually, they will find a new “scapegoat” — if only to look more serious in any possible negotiations.

Tech-oligarchs: A conflict with voters

Another characteristic of Trump as a leader is his fascination with state-of-the-art technologies, such as cryptocurrency. He is used to high-risk strategies. The latest example is the launch of Trumpcoin, which brought Trump billions of dollars in profits — at least on paper — and inflicted massive losses on crypto investors when the token's exchange rate plummeted.

Joe Biden was a consistent president who never made a move unless he could foresee its consequences. Trump, on the other hand, does not care whatsoever about the long-term consequences of his actions for the country or its people. How cryptocurrencies will affect taxation, income redistribution, and shadow economy growth is not at the forefront of the American leader's mind.

In his farewell speech, Biden warned that the rapprochement of tech billionaires with the Trump administration were among the signs that “an oligarchy is taking shape in America.” Indeed, these businessmen control significant market sectors, set the rules in these markets, and control influential media, from social platforms like Mark Zuckerberg's Facebook and Elon Musk's X to the traditional press — Amazon founder Jeff Bezos also owns The Washington Post. It was under Bezos's pressure that the newspaper decided to break tradition and forgo issuing an editorial column endorsing one of the candidates in the presidential election. All of these players had sworn loyalty to Trump before the results were in this past November. Elon Musk has even joined the president's team.

American society is threatened by the narrowing freedom of debate in the media space and the spread of misinformation, and it is in this environment that the tech oligarchs mentioned above will have the power to change the principles and approaches to obtaining and interpreting information. Zuckerberg's rejection of fact-checking on Facebook is the first immediate consequence of media space oligarchization. Interestingly, after losing the 2020 presidential election, Trump himself accused the Facebook CEO of censorship carried out in Biden’s favor.

The inclusion of ostensibly non-partisan Musk into Trump's government is also a curious turn of events. In the past, the system of checks and balances in American politics was enshrined in its bipartisan structure. Today, a new driving force in the form of tech billionaires independent of the political establishment has emerged.

Musk's Department of Government Efficiency (DOGE) is essentially an element of government unaccountable to the voters. At the same time, DOGE has a great deal of influence over the voters through politics, business, and media. This causes understandable concern, not only among Democrats but also in the right wing of the Republican Party. Most likely, both realize that the initiatives of ultra-rich visionaries are not always aligned with the interests of the ordinary Americans on whose behalf the right-populist movement pretends to speak and whose votes it has been able to attract.

When speaking of oligarchization, Biden harkened back to the period when the first big monopolies emerged. He was referring to Standard Oil, which illegally monopolized the oil market in the late 19th century. The federal government fought the company’s growing influence, breaking it up into several parts. Back then, it was the conflict between business and government that provided the impetus. Now, however, Trump is favorably inclined toward large corporations due to his own background, and businessmen respond with loyalty. This is the definition of oligarchization.

Further developments will depend not only on Trump's actions but also on the lessons Democrats learn from what happened. How will the Democratic Party change its approach to voter outreach? What values will it revise and who will it target in its next election campaign?

If oligarchization does become a problem for the country, Democrats can exploit the inevitable voter discontent. In this case, we should expect a change in policy toward the tech oligarchs in the next election cycle. However, businessmen evolve as well, adapting their corporations to the market and consumers' interests. Their companies are pragmatic market machines that will not lose their share of profits through ill-conceived actions motivated by greed. Greed won't go away, but today's corporations are much more advanced than the Standard Oil of the 19th century.

Foreign policy: At odds with the world

A year ago, it was unclear what the MAGA 2.0 edition of foreign policy would look like. Some expected Trump to drift into a new version of isolationism, jeopardizing all earlier achievements of American diplomacy. However, he did the opposite, reinventing expansionism based on America's image of great power.

The big question is how Trump's vision of greatness will fit into the existing international order. Trump's foreign policy is unlikely to find many fans in Latin America, Europe, or, frankly, anywhere at all — except maybe in Russia.

The U.S. demands that NATO member states increase defense spending to 5-6% of GDP. With the largest economies of the alliance struggling to reach the desired 2%, how are they supposed to arrive at 5-6%?

Trump has already embarked on a policy of bilateralism instead of multilateralism. The first such case involves the Panama Canal. Trump is pressuring Denmark as well, though this appears to be more of a laughing matter that will eventually blow over. Meanwhile, the developments surrounding Panama are curious to watch.

Overall, Trump's policy resembles an attempt to bring back the era when the world was governed by great powers, but such a herculean endeavor would require massive efforts in various fields. Biden threw everything he had at averting a nuclear conflict with Russia and preventing Israel from engaging in a full-scale war in the Middle East on multiple fronts, including against Iran. These efforts required all the resources of the State Department, and Trump's program suggests an even higher diplomatic tension. His stated aims appear to be impossible to achieve in a single presidential term.

The system of global governance can only be reshaped through major crises. One such crisis was World War II, on the ashes of which the UN was formed. Trump has the opportunity to provoke a similar crisis — at least in terms of tension, if not of armed confrontation. We cannot rule out that Trump's foreign policy, his trade wars, and his uncompromising personality will bring about new global coalitions and a reform of the collective order. This could even provide the perfect chance for the Global South to assert itself, and the American president may well inadvertently push Europe into more active negotiations with the leaders of India, Brazil, and several key African countries. In doing so, Trump could be transformed from a destroyer of the global order into the creator of foundations for building something new — an agent of creative destruction, in Joseph Schumpeter's terms, or creative disruption, along the lines of tech visionaries like Musk and Bezos.