World Braces For Donald Trump And His New Sidekick

A further step away from traditional Republican values

US Presidential candidate Donald Trump’s choice of J.D. Vance as his running mate is unlikely to be seen as good news by America’s major allies. For sure, compared with Trump himself, Vance seems to be intelligent and cool-headed, however far some of his opinions may have had to shift to accommodate the expectations not only of Trump himself but of his many faithful followers.

The problem is that Vance probably has a more consistent view of how he views US interests and, assuming Trump is selected, seems likely to have a bigger input into policy than has been the norm for vice presidents as Trump’s own age and infirmity, at 78, become apparent. Vance’s career and background also make it unlikely that he will be content with the low-profile loyalty which Mike Pence showed during the first Trump administration.

The first set of allies to be worried are those in Europe, given not only Trump’s past flirtations with Russian President Vladimir Putin but Vance’s express opinion that Ukraine should accept the loss of the large chunk of its territory now occupied by Russia and accept neutral status – in other words, make it doubly vulnerable to the next Russian land grab. For sure, Vance is right that European members of NATO should do a lot more in their own defense – Germany, Italy, and Spain stand out for assuming other members will do the job, leaving France, UK, and Poland as the heavy lifters. For sure, the US can limit its military efforts in Europe for deployment elsewhere as Europeans, notably Germany, have been waking up to defense issues. But Vance’s evident disdain for Europe can only encourage Putin.

Relations across the Atlantic will be further strained by the tariff and other trade barriers which are touted as a way forward for US manufacturing and its economy generally. This populist part of the Trump-Vance agenda is a further step away from traditional Republican support for free markets.

Vance also seems to have taken aboard completely the blind US defense of Israel, despite not only Gaza but the continued aggression in and settlement of the West Bank. That not only makes life uncomfortable for Europe but means that the US has almost no significant friends in the Arab world other than Saudi Arabia and the petty states of the Gulf populated mainly by foreign workers. Pro-US leaders, President Abd Fattah el-Sisi in Egypt and King Abdullah II of Jordan, have survived but both countries have populations seething with anger about Israel.

Iran meanwhile remains the cartoon “axis of evil’ so Vance seems unlikely to respond to any opportunities, even minor changes, in Iran’s views of the west which may follow the election of President Masoud Pezeshkian. The last time Iran had a reformist-minded leader in President Muhammad Khatami, efforts at engagement with the west were ignored by President George W. Bush. US obsession with its nuclear program is driven by Israeli, not US interests and is a monument to western hypocrisy given that Israel, Pakistan and other neighbors have long been nuclear. Iran remains crucial to any strategy limiting the southward spread of Russian and Chinese influence.

It is now a wonder, given the potential for increased global disarray, that new groups such as the BRICS nations are being touted as solutions to various global issues, not least the dominance and strength of the US dollar. The BRICS currency gambit is a nonsense but it is only natural that more trade will be done in other currencies, at least those which can be easily traded. Current US dollar strength is unlikely to last much longer and markets may soon fear a rapid unraveling not only of the dollar but of a Wall Street driven to dizzy heights by speculation in a few tech stocks.

Not only does the US face the end of a period of steady economic growth. It, and the dollar, face the prospect of even bigger US fiscal deficits thanks to Trump’s tax-cutting plans on top of a debt level not seen since the end of World War II. It is hard to predict how an America-first administration would respond. It may well welcome a collapse of the dollar, say from 155 yen to 110, the euro to 90 cents, and the Chinese RMB to 6.4 to the dollar as one way to improve the trade balance – just as the Reagan administration was the force behind the 1985 Plaza Accord which drove the yen back up by 40 percent and other major currencies by significant amounts. But the international climate was then very different, so the geopolitical fallout was limited.

Now, as in 1985, the most obviously undervalued currencies as judged by trade alone are mostly in East Asia – China, Japan, South Korea, and Taiwan. So how will economic policy issues of an America-first administration fit with its strategic priority of focusing on the “China threat”? Trump has already attacked Taiwan for allegedly taking chip manufacturing away from the US, and has suggested it must pay the US for its defense, as though Taiwan doesn’t already buy large quantities of US weapons. Japan and Korea naturally worry that if this is Washington’s attitude to both trade and defense cooperation, it will need major adjustments to their own priorities.

Past US promises to prioritize Asia over the Middle East and Europe have so far proved unrealized, first with Barack Obama failing to respond to China’s invasion of the Scarborough (Panateg) shoal and Trump in his first term abandoning the Trans-Pacific Partnership. President Joe Biden has helped to develop relations with India and has taken advantage of the shift in the Philippine stance away from China under Ferdinand Marcos Jr. But quite how a Trump/Vance administration would confront China other than via trade, which would probably also hurt the US’s Asian allies, remains to be seen if and when they win, a growing probability given Biden’s clear vulnerability.

It's quite possible Vance-Trump ideas will be much watered down by more traditional Republicans, the bureaucracy and business interests, and the military itself. Nonetheless, it explains in part why NATO and Japan and Korea are talking more to each other, and why individual countries such as France engaging with and trying to sell weapons to those in Asia are worried about China and the Xi Putin-axis.