Donald Trump will lead the US in the right direction. We should take note

Donald Trump will demand European and Asian alliance partners start taking more responsibility for their own security ...

Donald Trump will demand European and Asian alliance partners start taking more responsibility for their own security and paying their way. Photo: Chris O’Meara

 

 

Many working-class Americans, who had traditionally put their faith in the Democratic Party to deliver for them, voted Republican for the first time. In contrast, the Democrats, filled with the false confidence of urban progressives, condescended to call the working-class voter base uneducated and deplorable.

So, what did Americans vote for? How will Donald Trump “Make American Great Again”?

Trump’s first priority will be to boost the US economy and create jobs. He aims to reshape US tax policy, dramatically cutting income and company taxes, deregulating the economy and cutting government spending. Trump’s aim is to boost US GDP growth to 4 per cent and create 25 million new jobs. In a nod to his daughter Ivanka’s efforts to support working women, Trump also wants to see greater female labour force participation and will offer tax deductions for child-care expenses for working parents. Obamacare will go, and with it an unaffordable and inflexible system. Trump will replace it with something more workable.

If you have visited the US in recent times, you will appreciate the urgent need for investment in its ageing infrastructure. Many highways, railroads and bridges are in a state of disrepair.  Trump has promised big infrastructure investment. How he pays for infrastructure projects will be a considerable challenge as tax revenues are likely to fall in the short term with his tax reform package. Trump’s solution will be to attract private sector investment in infrastructure through a system of tax credits.

Like Australia, America’s success story is the story of migration. Trump recognises this and is supportive of legal, regulated migration. But, like Australia, average Americans want strong and safe borders and want people to play by the rules. Trump has tapped into this by promising to build a wall along the US-Mexico border. Expect him to ensure the letter of US immigration law is enforced, with the deportation of illegal migrants and a crackdown on employment of illegal migrants.

US allies have expressed concern that the Trump administration may not take existing relationships such as NATO and ANZUS as seriously as his predecessors. He may reset some relationships and is likely to favour countries like Australia and Britain, who share American values of democracy, the rule of law, individual liberties and personal responsibility. But he’s not going to accept free riding off US military power, so expect him to demand European and Asian alliance partners start taking more responsibility for their own security and paying their way.

From Australia’s perspective, we must monitor steps by Trump to implement a protectionist agenda. This was a feature of both his and Clinton’s campaign. Starting a trade war with China and putting up tariffs on Chinese imports will just result in economic harm to everyday Americans who would have to pay more for everyday consumables. The reason US manufacturing jobs have disappeared is more down to technology and automation than offshoring. Reducing the tax and regulatory burden on businesses as well as decreasing energy prices will help USA Inc much more than erecting trade barriers.

Full article: Donald Trump will lead the US in the right direction. We should take note (The Sydney Morning Herald)

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