Trump, Tweets and Brexit - a toxic global cocktail

EDITOR'S BLOG: With an unpredictable POTUS always ready to pull his Twitter trigger, it's no time for the UK to be going it alone.

by Matthew Gwyther
Last Updated: 02 Feb 2017

We are discovering there are many things Donald Trump dislikes besides stairs. The list increases by the day as the malevolent executive orders issue forth. Anyone who dares cross him comes near the top of the list to get whacked.  (Woe betide anyone who tries to prevent him doing some pitch and putt on the croquet lawn at Balmoral. He is like a spoiled toddler when denied his urges.)

Big businesses in the States are currently running scared, terrified that they may become the subject of one of @realdonaldtrump’s Tweets which then knocks tens of millions off the share price. Some are pretending to welcome this robust engagement as long awaited muscular and honest dialogue between business and politicians. They are lying.

The uncertainty caused by such a loose cannon makes any sort of planning almost impossible. Others are keeping their heads down praying they don’t feature as a blip on his radar as he sits in the Oval Office watching endless hours of TV and reading the odd newspaper. The bolder ones such as Howard Schultz of Starbucks respond directly to the Muslim migration ban by offering 10,000 jobs over the next five years to immigrants. Sergey Brin, founder of Google and the son of Russian refuseniks joined the protest at San Francisco airport.

Trump especially loathes big global firms. The sort of stateless US multinationals with factories in China, Korea or Taiwan, with a tax base in Ireland or Luxembourg and customers all over the planet. ‘All you have to do is stay’, he threatens as punitive treatment is dished out to those who dare to decline paying US wage rates and skyhigh healthcare costs for less-than-optimal American productivity levels.  What he wants is an end to the process of globalisation, to be replaced by localised supply chains and economic nationalism.

It’s interesting that this backlash is occurring at a point where the globalised company is stuttering, anyway. Suddenly many firms are baulking at rapidly increasing Chinese wages. The Economist says ‘a 30 year window of arbitrage is closing.’ As the playing fields level off across the planet,  tax finagling is becoming trickier, China doesn’t just want to be the factory of the world but is insisting on having some of the R&D done within its borders, too. Europe and the USA are engaged in a fight to the death over the tax dollars - such as they are - of Google, Apple and the rest. Things could get pretty ugly and chaotic as Xi Jinping hinted in Davos.
 
I’d say business is very much on the back foot in the UK, as well. But for other reasons. It has made repeated representations to government before last year’s referendum and since. It is requesting but singularly failing to get reassurances about everything from staying rights for EU citizens in the UK  to more clarity on potential tariffs that will interfere with complex supply chains. Word is that Nissan got no deal whatsoever because such guarantees are impossible to give. Business is finding it hard to speak with one voice as it jockeys for position.

Carolyn Fairbairn, the head of the CBI is, in many ways, an impressive figure: thoughtful, enlightened and progressive. Her problem is she’s an absolute Grade A member of the liberal metropolitan elite - INSEAD, World Bank, BBC, McKinsey, ITV - who now, in defeat, are expected to wear that badge like the mark of Cain. She even owns a boutique hotel in Provence. I can’t help but think she’s the right woman but at the wrong time. The CBI probably needs a more gobby, populist streetfighter along the lines of Digby Jones at the moment, even if he was a reluctant Brexiteer.

Fairbairn’s message while expressing fear about a ‘disorderly exit and crash landing’ seems to be a sort of  ‘we are where we are and must make the best of it by keeping on keeping on. There is much in the populist backlash that we still need to understand and make accommodation for.’ In many ways this sad realism seems appropriate. She appears to have worked her way through the five stage process of grieving: denial, anger, bargaining, depression and acceptance.

I, for one, am still finding it pretty hard to get beyond stage two. That is because as things become clearer the scale of the injury that we’ve inflicted on ourselves gets bigger. It seems to me that things are getting worse. It’s likely that Trump will be a disaster for the UK as we try to negotiate Brexit. As the FT noted this week: ‘The decision to exit the EU leaves Britain much more dependent on the US, just at a time when America has elected an unstable president opposed to most of the central propositions on which UK foreign policy is based.’

We have every reason to be terrified by Trump and by Brexit, which are joined in their wayward unpredictability. Veteran Europhile MP Ken Clarke - the only Tory to vote against leaving in the Commons yesterday - was right to be so sceptical of the Leavers’ naive vision of the world, a looking glass ‘Wonderland’ where ‘Nice men like President Trump and President Erdogan are impatient to abandon their normal protectionism and queuing up to give us access to their markets’.

Being out on your own in splendid isolation is scary when we could do with all the friends we can find.


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