The major European and American media, above all “Financial Times” and “The Economist”, They take it for granted that Donald Trump is America’s next president; and the same is overwhelmingly supported by the international elite of the Davos Forum.
In the increasingly probable case in which the question of Donald Trump’s return to power in the world’s leading superpower seems to meet a strict criterion of reality, this becomes in the most significant event in the history of the world at this time.
What are the economic priorities of Donald Trump if he took over the White House on January 20, 2025?
• First of all consolidate the tax cut made in 2017and which Congress has decided to conclude in 2025. This implies giving it a definitive, endless and drastically irreversible character, which transforms it into a fundamental stage in the US accumulation process.
• Donald Trump’s tax cut in 2017 was 30% across all tax rates and occurred horizontally. In those conditions It was the largest and deepest tax cut since Ronald Reagan’s administration in the 1980s.; and it was what made the United States the lowest taxed advanced economy. To this we must add the vigorous process of deregulation of the economy that Trump carried out in his first government; and whose size in economic terms can be estimated in an injection of 2.2 billion dollars granted to the private sector, in particular small and medium-sized enterprises.
• Trump’s fundamental success in the first term was an exceptional increase in the investment rate, which grew by 4 points in less than 3 years, and this was a direct consequence of tax cuts and widespread deregulation.
• This was what triggered a supply shock especially in terms of investments in high technology. At that time, the United States already had all the structural conditions to trigger the phenomenal process of the fourth industrial revolution. All that was missing was a substantial increase in the rate of investment, and that’s what Donald Trump managed to do.
• The other point of what Trump would do in a second term would be establish an additional 10% tariff on all imports, without distinction between regions and countries from which they come. It should be added that the USA represents the largest market in the world, to which all the countries of the global system aspire to export; and Trump’s idea is to allocate those huge resources – which can be estimated 450,000 million dollars per year – to the advance payment of the North American public debt, which amounts to 34 billion dollars10 points more than the gross domestic product (US$24.6 trillion/25% of global GDP).
• All this with the premise that this is the main tool for drastically reducing long-term interest rates and therefore the structural level of inflation.
• Finally, although the United States ranks first in geopolitical priorities, Trump intends to reach a competition and cooperation agreement with Chinawhich is the other superpower of the global system.
• In this decisive aspect of world politics, which is the relationship between the United States and the People’s Republic, the 21st century is at stake in terms of power; and in this crucial question the first thing to note is this Trump has already reached an agreement with China, and specifically with President Xi Jinping, which took place in October 2019 and was presented in January 2020, the year of the global deployment of the Covid-19 pandemic.
• There were 2 terms of the agreement: China committed to eliminating the trade surplus with the USA 580,000 million dollars in 3 three-year installments of 200,000 million dollars each; and this would happen while all trade sanctions imposed by the United States on the People’s Republic were maintained.
• This meant in other terms the tacit but extraordinarily eloquent premise of the implicit recognition of American supremacy.
Certainly the current conditions (2024/2025) are not the same as 4 or 5 years ago.
In this period China has experienced exceptional growth, especially in terms of mastering the advanced technologies of the fourth industrial revolution, to the point that today it aims to convert its economy to 100% digital within a period of 10 yearsthat the United States is already fully today.
This is why today the relationship between the superpowers consists above all of recreate a bond of trustwhich is the opposite of hostility and the starting point of cooperation.
This is Donald Trump’s challenge today, when The anti-Chinese wave has acquired a practically unanimous character in North American societyand now covers both parties, Congress and the White House, and all major media outlets.
It is under these conditions that Donald Trump must show one of his specialties, viz the art of reaching an agreement based on common interests.
Source: Clarin
