Donald Trump is certainly soft on Vladimir Putin: several months ago, CNN compiled a list that included almost 40 instances when Trump either praised the Russian “national leader” or did things that benefited Russia.
Evidence that Trump is heavily dependent on Russian money continues to accumulate. As to the number of Trump’s contacts with sleazy Russian thugs — who are often synonymous with Russian security services — and his 2016 election campaign’s “perfectly innocent” encounters and communications with Russian individuals — who are almost always synonymous with Russian security services as well — why, Trump supporters despite being highly susceptible to a variety of wacky conspiracy theories, see no possibility of a conspiracy there.
A number of sources, including US intelligence agencies, have been warning that Russians are once again at it, as they were in 2016, meddling in the US presidential election on Trump’s behalf.
As they should, of course. For Putin, Trump has been a gift that keeps on giving. Even if Trump is right and the entire Russia investigation was “a hoax” and “the greatest political crime in American history”, and Trump, as he claims, never had anything to do with Russia, the Kremlin should be very pleased with his misrule.
First of all, America is divided and Trump keeps stoking and deepening those divisions. Moreover, the poorly educated Deplorables are ascendant in Trump’s America, while people with brains and education — professors, scientists, intellectuals, even tech people, i.e., all those who are responsible for America’s global leadership — are being denounced as traitors and (Stalin’s favorite term) enemies of the people. Science, in general, is being dismissed by the Trump Administration in favor of the Dear Leader’s hunches — also a page out of Stalin’s book.
Second, America’s international reputation is in the toilet, as any number of international opinion polls confirm. Its moral leadership and reliability as an ally have been severely hampered. Trump seems to be working toward weakening NATO and junking the security arrangement in Europe which has contained Russia since the end of World War II.
Third, Trump’s immigration policies and its nasty reputation are starting to keep away foreigners with brains and marketable skills — which has been another reason why America is a global leader.
Finally, Trump’s pathetic response to the COVID19 pandemic will inflict lasting damage on the US economy. America’s ability to suck in global savings allows it to borrow trillions to keep its economy going. But since its infections and deaths, already by far the highest of any rich developed country, are accelerating, the economic recovery will remain stunted. The more America borrows, and the more money the Federal Reserve prints, the more certain it is that the dollar’s reserve status will be diminished. Eventually, borrowing from foreigners and living beyond its means will have to come to an end.
But with all the talk of how Trump is good for Russia, we forget that the real beneficiary of his presidency is China.
Russia is actually a spent force. Its economy is extremely weak, industry in shambles, science, and technology establishment backward, and social problems mind-boggling. It is a massively corrupt kleptocracy in which even the kleptocrats at the top don’t believe in the country’s long-term prospects for survival. They are sending both their assets and family members abroad.
China, meanwhile, is a rich and hungry power eager to rule the world. Unlike Russia, it has the resources to dominate the world. Accordingly, a recent article in Foreign Policy was titled “Beijing Believes Trump is Accelerating American Decline”.
This has been a pattern all along. When Trump abruptly quit the Trans-Pacific Partnership as one of his first acts in office he played right into China’s hands. The Obama Administration negotiated the TPP as a way to contain China’s economic and strategic dominance of the region, bringing together 11 nations on the shores of the Pacific who could counteract it under US leadership.
The shambolic American response to the COVID19 pandemic, which is entirely Trump’s fault, is clearly seen in Beijing as a manifestation of American weakness. Moreover, it contrasts sharply with China’s successful effort. Its economy became the first major one to post growth and is booming once more.
But by far the most beneficial thing for China the Trump Administration has done is to unleash a trade war against Chinese manufacturing.
Trump and his advisors believe that China takes unfair advantage of America, flooding US markets with cheap goods while keeping its own markets closed. Trump is convinced that if he levels the playing field with tariffs, US companies will bring all those high-paying blue-collar jobs back to America.
At the same time, a more open Chinese market that Trump keeps pushing for will result in higher exports to China and an additional boost for US workers.
That policy appeared to be working. At least in the first three years of Trump’s presidency, America stopped losing manufacturing jobs and even gained a few.
Except this is exactly what China itself wants. At this stage, manufacturing has become a never-ending race for the bottom. Gone are the days when the producer was king and everything that was manufactured was snapped up by eager buyers.
Now, however, manufacturing has become a liability. Poor countries with large populations — such as India, Vietnam and Nigeria — eagerly compete for low-paying manufacturing jobs even as automation technology makes production cheaper and more efficient. Robots are replacing entire layers of human jobs. Having set itself up as a global manufacturing hub, China faces constant downward pressure on jobs and wages.
Besides, Beijing is grappling with an environmental catastrophe and a barrage of criticism for the environmental pollution wrought by its manufacturers—who are all too often foreign corporations using China as their production base.
The most pressing task in business today is not to produce but to find markets. There China has a massive advantage. China’s market is immense and underserved. The size of its middle class is assessed at a whopping 400 million — larger than the entire population of the United States.
In the post-COVID world, many people may find themselves plunged into poverty. This is especially true in the United States, where the economic response to the pandemic has been mismanaged every bit as badly as the medical one and where millions of businesses are going to cut jobs permanently.
After the 2008-09 financial crisis consumer demand from China was a major factor that helped prevent an all-out economic depression. After the pandemic, it will be even more crucial, and the Chinese government is likely to provide fiscal stimulus as it has always done in times of trouble. While Washington under Trump has been extremely profligate, running up trillion-dollar annual deficits at the peak of the longest business expansion in history, China has been frugal.
Even before the pandemic, many American multinationals relied heavily on the Chinese market. General Motors sells over 3 million cars in China annually — more than in the United States. Apple gets around 15 percent of its global sales from China, accounting for over $50 billion annually.
After the pandemic, China’s importance for US companies will only grow. And China’s state capitalism model always relied on requiring foreign companies to transfer technology to their Chinese partners. This has been a condition for doing business in the country, and pressure on foreign companies will only become heavier. After the pandemic, US companies will find harder to resist. Similarly, Silicon Valley will be forced to cooperate more closely with Chinese tech companies, whether the US government wants it or not.
In the end, China will be able to close the gap in innovation — a key economic area where America still leads the world and which provides a crucial advantage for Washington over Beijing.
