It wasn’t so long ago that Barack Obama insisted Donald Trump will not be the next President of the United States. His reason was because he had “a lot of faith in the American people,” and that “being president is a serious job. It’s not hosting a talk show, or a reality show.”[1]
On November 8, Obama was proved very wrong when Trump not only won the White House, but did it in convincing fashion. Suddenly, the former president and several of his global colleagues had to take the real estate mogul – and reality show star – seriously.
In Europe, the responses were congratulatory in nature, although French President Francois Hollande said Trump’s win “opens up a period of uncertainty” that “must be faced with lucidity and clarity.”
German Chancellor Angela Merkel praised longstanding relations between the two countries, but her foreign secretary Frank-Walter Steinmeier was a little more cautious.
“I believe the biggest challenge will be to meet the high expectations that Trump himself has created: to make America great again, also with a view to the economy, to create new jobs in the current economic environment, all that won’t be easy. Above all I hope that we aren’t facing bigger tectonic shifts in international politics.”[2]
Unfortunately for Mr. Steinmeier, those “tectonic shifts” are well under way, with Trump promising to scrap free trade deals and hold foreign competitors responsible for exploiting U.S. trade relations. Just last week Trump’s top economic advisor accused Germany of exploiting a weak euro.
Peter Navarro, who heads Trump’s National Trade Council, referred to the euro as an “implicit Deutsche Mark” that Berlin uses to “exploit other countries in the EU as well as the US.”[3] Suffice it to say, it didn’t take long for Team Trump to begin alienating some of its closest allies.
After what appeared to be conflicting signals about how they view Trump, the Saudis took a measured approach in congratulating the new U.S. President. “We wish your excellency success in your mission to achieve security and stability in the Middle East and worldwide,” King Salman said.
In neighbouring Turkey, President Recep Tayyip Erdogan praised the result as an “audacious” step “regarding fundamental rights and liberties and democracy.”
While many responses were a clear attempt to mask displeasure with diplomacy, Trump has long had a small group of cheerleaders on his side. Former UK Independence Party (UKIP) leader and main Brexit backer Nigel Farage was down-right giddy following the election result.
“2016 is, by the looks of it, going to be the year of two great political revolutions,” Farage said. “I thought Brexit was big, but boy, this looks like it’s going to be even bigger.”
How smug was Farage? He basically asked for a job alongside the U.S. President.[4]
Russian President Vladimir Putin, who many believe played a hand in Trump’s election win, was obviously content with the result.
“We heard the campaign slogans when he was still a candidate which were aimed at restoring relations between Russia and the United States,” Putin said. “We understand that it will not be an easy path given the current state of degradation in the relations. And as I have repeatedly said, it’s not our fault that Russian-American relations are in such a poor state. But Russia wants and is ready to restore full-fledged relations with the United States.”[5]
Despite all the uncertainty of a Trump presidency, the financial markets have been far more forgiving. After sputtering in the weeks leading up to the election, U.S. and global stock markets surged after Trump took the White House. Although nothing had really changed, it was Trump’s promise of faster economic growth that riled up investors. By the end of 2016, stock indices in America were routinely setting record highs.
But analysts are now fearful that the Trump honeymoon may be winding down as the new President ratchets up his protectionist rhetoric. Trump has issued more than a dozen executive orders, including ones that remove the U.S. from the Trans-Pacific Partnership. He has also put Iran on high alert and alienated Mexico with plans to build a massive border wall.
The way it’s going now, there’s not much left stopping an all-out trade war with China.[6] [this could be linked to the article USDCNY Are China and the US headed for a Trade War?] This could also be the beginning of a major breakdown in U.S.-Mexico relations. Significant gains made by negotiating a nuclear deal with Iran are also up in the air. These developments suggest world leaders may be quick to change their tone on the new President.
[1] Real Clear Politics (February 17, 2016). “Obama: I Have Faith In The American People That They Will Not Elect Trump.”
[2] The Guardian (November 9, 2016). “World leaders react to Donald Trump’s US election victory.”
[3] Nick Fletcher (January 31, 2017). “Trump’s trade adviser says Germany uses euro to ‘exploit’ US and EU.” The Guardian.
[4] Kara O’Neill (November 9, 2016). “Giggling Nigel Farage gloats over Donald Trump victory – and says he’s hoping for a job alongside the President.” Mirror UK.
[5] The Guardian (November 9, 2016). “World leaders react to Donald Trump’s US election victory.”
[6] Dan Ikenson (February 6, 2017). “Not Much Left Stopping Trump’s Trade War With China.” Forbes.
