U.S. Administration Update

In the #BlueStarBrief, we try to cover issues you may not be reading elsewhere. We also want to be timely. These two principles have been conflicting with the way in which the Trump Administration operates. The Trump Administration moves quickly so it is difficult on any given day to understand the status of important issues such as trade, immigration, the court system, and the U.S.’s bilateral relationships. We do our best, but at times the challenge is overwhelming.

Rather than try to compete with what you are no doubt already reading or to provide information that will be outdated as you are reading it, we thought we would provide an update on what U.S. allies are doing without the United States.

The Trump Administration has stated that the U.S. no longer wishes to lead the world—at least not in providing strategic aid and support for allies and countries in need. It is also clear that while China, like the U.S., is one of the world’s largest economies, it is not well positioned to lead the world. To do so, China would have to demonstrate that countries wish to be led by China—and that is not happening, at least not right now.

With the two largest economies either opting out or simply not ready to lead, other countries are stepping up—without the United States. Last week, Germany and France announced a bilateral security agreement and a security council. As part of the agreement, France would provide a nuclear umbrella for Europe. It is unclear what impact this agreement will have on NATO, but it is hard to imagine the impact will be neutral. Following European pressure and the announcement of potential new European sanctions on Russia, President Putin for the first time said that direct negotiations are possible. The U.S. said it was a “good idea” but was not involved in the discussions or the strategy. Similarly, in the dispute between India and Pakistan, the only agreement the two countries publicly stated was that the U.S. was not instrumental in the negotiations of a cease fire.

The Trump Administration has gutted U.S. soft power despite cries from many that China will fill the vacuum. China has been providing both soft power and financing in Latin America, Africa, and Asia for years. With the U.S. creating a larger gap between what is needed and what is given, China could, and likely will, become more influential in these important regions. China could make mistakes. It could try to overturn the existing world order rather than filling the tremendous void left by the United States’ leadership withdrawal. Or China could condition its soft power on changing rules and policies that result in countries pushing back on its offers.

As the U.S. exits the global stage and China moves to fill the gaps, it will be important to see whether China opens its aperture wide enough to allow more countries in and limits the conditions and changes it seeks in exchange.

Even with a UK-U.S. trade agreement in the wings and tariffs reduced at least temporarily between the U.S. and China, uncertainty remains for businesses, especially for small businesses and for consumers alike. Far too many questions remain: Will the U.S. and China reach an accord? What about the agreements between the U.S. and Canada and the U.S. and Mexico?  What is the status of trade between the U.S. and Europe? The answers are unclear, and investment and consumer spending are slowing down as a result.

There was a time when moving without U.S. leadership was unthinkable and forsaking the U.S. market was too much to sacrifice. But today, at least for now, the rest of the world is moving forward without the U.S. or its market and is searching for other opportunities and alliances.