After the Democrats' landslide victory in the midterm elections, President Trump will have less room to manoeuvre than before. He can certainly enforce some of his policies with executive orders, and he can veto laws passed by the Democratic majority in Congress. But this majority still significantly shifts the balance of power in domestic politics.
In the foreign policy field, however, Trump still has a lot of power. I believe that in the future he will therefore spend more time and energy here. He can negotiate with heads of state and governments on his own initiative, and for example impose sanctions based on existing laws. He has already hinted at an escalation of the war against Iran once the midterm elections are over. He also plans a separate meeting with President Putin and Chinese President Xi Jinping during the Asia-Pacific Economic Cooperation summit, which will be held in Shenzhen later this month. The war in Ukraine is not on the agenda, but the topic may well be raised anyway. Putin is probably interested in it, especially since neither Ukraine nor Europe are present at the APEC meeting.
Trump's foreign and trade policies will be characterized by the slogan "America First" for the last two years of his presidency. President Woodrow Wilson used the phrase to defend America's neutrality during World War I and Warren Harding used it to argue against the League of Nations.
Trump's use of the slogan represents a break with American policy since 1945. As early as the summer of 1944, 44 countries gathered in the town of Bretton Woods, New Hampshire, to plan ahead. Under the leadership of Franklin D. Roosevelt, the conference established the World Bank and the International Monetary Fund. Out of Bretton Woods came a world order characterized by economic stability and predictable exchange rates, with the US dollar as the guarantor.
But American postwar politics was more than that. James Holland tells in his book THE VISIONARIES, The Making of the Post-World War II Order in the West, of a speech President Harry S. Truman gave to Congress in 1947 in response to a possible economic collapse in Europe. Truman argued for a policy that supported free nations under external pressure. "I believe that our assistance must come primarily through economic and financial assistance which is essential to economic stability and orderly political processes," Truman said. Congress responded with standing ovations and voted overwhelmingly for the president's proposal to support Greece and Turkey, which posed the urgent problem.
In the wake of this decision came the Marshall Plan, which financed much of the reconstruction of Europe after the war. For the first time in history, the victorious side in a war undertook to finance the reconstruction of the loser. From 1948 to 1951, the United States transferred $13 billion ($150 billion in today's money) to 16 European countries. The Americans demanded that the recipients lower their customs walls, stabilize their currencies, and adopt balanced budgets. This led to economic growth, which the Americans themselves greatly enjoyed, since Europe could now buy goods and services from the United States.
Henry Ford used the same thinking in 1914 when he doubled the minimum wage for assembly line workers so they could afford to buy the cars being produced.
Donald Trump's economic policies seem to be the exact opposite. He punishes his trading partners with sky-high tariffs, which in turn lead to higher prices for goods in the United States. They also lead to reduced world trade. The World Trade Organization (WTO) adjusted its forecasts for 2025 from a growth of 2.9 percent to a decline of 0.2 percent. China's exports to the United States fell by 20 percent last year, while American exports to China fell by 26 percent, according to the US Bureau of Economic Analysis.
The Marshall Plan not only contributed to economic growth in Europe after the war. It also slowed the rise of communism. In France and Italy, the communists were strong. But the flow of money from the United States alleviated much social and economic distress, which made communism less attractive. Trump's policies in Europe have led to Russia increasing pressure on Europe. NATO has been weakened after Trump cast doubt on American military support in the event of a possible Russian attack on a NATO country. Citizens are particularly nervous in the Baltic countries. Trump's refusal to rule out a military takeover of Greenland has not strengthened NATO either. He has later backed down on the Greenland threat, but experience shows that Trump can suddenly contradict himself.
The politics that have dominated the Western world for the past 80 years are disappearing. The United States stood as its guarantor, to the delight of both Americans and the rest of us who live in this part of the world. Donald Trump has ensured that what Roosevelt, Truman and others built is now being torn down. This demolition work will probably continue even though the Democrats won the midterm elections.
