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Trump and Brexit

Trump’s victory and Brexit could unravel the western economic and political order which has been the framework of world politics for the last seventy years

Andrew Gamble, Professorial Fellow at SPERI

Andrew GambleTrump’s victory in the US presidential election has been compared to the vote for Brexit. Both were driven by the anger and despair of the white working class, and their rejection of the liberal, cosmopolitan establishment, both neo-liberal and social liberal.  Both are seen as part of a wider populist rebellion against globalisation and the western international economic and political order.  This international order has been extraordinarily resilient since the financial crash in 2008.  Huge efforts were made to stabilise the international economy, and a new world depression was avoided, but the recovery has been patchy and weak, the slowest recovery since 1945, and living standards for the majority have stagnated.  Many incumbent governments in the western democracies have lost elections since 2008, but they have always been replaced by governments who adhered to the broad terms of the neo-liberal consensus.  Until now.

The financial crisis started in the heartlands of Anglo-America, so it is perhaps appropriate that it is in the UK and the US that the first serious breaches in the neo-liberal political order have been made. These breaches have still to be consummated.  We do not know how radical either Brexit or the Trump presidency will prove to be.  But they have the potential to unravel the western economic and political order which has been the framework of world politics for the last seventy years.

From this perspective Trump’s victory is much more significant than Brexit, and it also helps us understand the limits of Brexit more clearly. Many Brexiteers have been delighted by Trump’s victory.  While expressing the obligatory distaste for some of his rhetoric they enthuse about another victory over the liberal cosmopolitan political elite, the rising up of the forgotten, despised working class to take back control of their country, and regain self-government.  But some Brexiters like Daniel Hannan want to deny too close a relation between Trump and Brexit.  Trump is protectionist and wants not just to curb immigration, and deport illegal immigrants, but also wants to protect American jobs by slapping tariffs on foreign imports and ripping up trade deals.  Hannan insists that the vote for Brexit was about increasing free trade not limiting it.  Britain is to be a global power again with greater openness than ever before.  This is also the declared position of the UK Government.  It wants border controls and free trade.  The Trump position is much more consistent.  He is against free trade, against trade deals, and against immigration.  He presumably thinks the US is a large enough economy to make the costs of going protectionist bearable.  That is not an option for the UK, which relies too heavily on international trade for its prosperity, and lacks a large enough internal market to sustain it.

The problem for Brexiters is that while many of them are strong free traders, most of the people who voted for Brexit are not. They want controls on immigration, regardless of whether this means a contraction of trade.  The May Government agrees.  It has indicated both in relation to the EU and to India that controlling immigration is the priority.  Trade deals come second.  If that is followed through there will be serious consequences for many sectors of the British economy, including lower growth, and a reduction in fiscal revenues.  People in Britain will be poorer, but immigration will be lower.

Trump does not face this Brexit dilemma. If he follows through on his campaign rhetoric he will build a wall to keep Mexicans out, block entry of Muslims to the United States, impose tariffs of up to 50 per cent on Chinese goods, withdraw from NAFTA, and will not pursue trade deals like TTIP or TPP.  He has also suggested he will pursue an isolationist foreign policy, abandoning the US commitment to NATO, encouraging Japan and South Korea to get their own nuclear weapons, and withdrawing from major international agreements, including on climate change and refugees.

Not all of this is likely to materialise, but some of it will. This points to another major difference between Trump’s victory and Brexit.  As Michael Kazin has argued, Trump’s protectionist, nativist, isolationist position, America First, is most closely in line with Nigel Farage and UKIP, Marine Le Pen, Geert Wilders, and others.  But although Farage was crucial to winning Brexit he is not even a Westminster MP, and is not part of the UK Government, which is still run by mainstream Conservatives who do not at all want to overturn the western political and economic order, apart from withdrawing the UK from the EU.  Trump’s victory means that for the first time a representative of the racial-nationalist populist right has broken through to major government office.  All eyes now are on the French presidential elections.  Victory for Marine Le Pen next year would start the unravelling of the eurozone and possibly even the EU itself.

Trump has to decide whether to work closely with the Republican majority in Congress, which risks him being ‘captured’ by their agenda and becoming just another Washington insider, or whether he really seeks to ‘drain the swamp’ and follow through on his campaign agenda, soberly analysed by Evan Osnos.  Trump has up to now shown contempt for many aspects of constitutional and representative democracy, and many think he will find the constraints of governing in the US intolerable.  Does he have the patience to create the coalitions he needs to get parts of his agenda through, or will he seek ways to bypass constitutional constraints, and continue his war on Washington and the liberal elite?  If he is serious about following through on what he has promised his supporters, then he will have to overcome significant opposition in Congress, in the courts, and in the bureaucracy.  If what we get is Trump unchained, then a Trump presidency will not only transform US domestic politics, but could signal the end of the post-war American order, the onset of trade wars and the risk of a new world depression.

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