December 28, 2016 By FTI Consulting
Following only a few months after the unexpected result of the UK’s referendum on EU membership, Donald Trump’s victory in the US presidential election reinforced the perception that 2016 was indeed the year of the political upsets. Yet what made his electoral triumph all the more incredible was the fact that, despite being a billionaire real estate tycoon with a decades-long affiliation to the Democratic Party, Trump succeeded in becoming the brazen mouthpiece for a significant plurality of the American working class who saw the country as in need of radical change and renewal after being dominated for far too long by “out of touch” political and economic elites.
Such glaring contradictions both enraged and wrong-footed his critics and chief opponent, Democratic presidential candidate and former Secretary of State, Hillary Clinton, whose polished and at times mechanical demeanour only served to reinforce the impression that Trump, through his intentionally bombastic and volatile approach, was “unlike a typical politician.” Despite a seemingly endless series of gaffes and controversial comments that would have eliminated any conventional presidential candidate, Trump achieved what very few (including himself) thought possible. Not only did the Republican nominee secure the crucial swing states of Florida, Ohio, Iowa and North Carolina, he completely redrew the political map by breaking through the so-called “Blue Wall” of traditionally reliable Democratic states, sweeping through the Mid-West and putting Wisconsin, Michigan and Pennsylvania into the GOP column. To stress just how significant these three results are, it is worth noting that a Republican presidential candidate has not won, let alone been competitive, in any of these states for 28 years with Wisconsin not supporting a GOP candidate since Ronald Reagan’s landslide in 1984.
Yet Trump’s unprecedented and unexpected result is also a reflection of a deeply divided nation, something which could prove corrosive over the coming four years. Although at the time of writing Trump has secured 304 electoral college votes over Clinton’s 227 (with seven ‘faithless electors’ opting for alternative candidates, including Ohio governor John Kasich, former Republican Secretary of State Colin Powell and, rather surprisingly, Faith Spotted Eagle of the Yankton Sioux Nation), there is a striking disparity in the popular vote. Secretary Clinton’s lead of almost 3 million votes is certainly one of the largest for a losing candidate and dwarfs the half a million-vote lead Al Gore secured over the eventual presidential winner, George Bush, in the controversial 2000 election.
The extent to which this will constantly undermine his political legitimacy and thus his entire policy agenda still remains to be seen. However, the fact that a recent CBS News poll found as few as 34 per cent of the American electorate believe that Trump will be a “good” or “very good” president (which also means even a large proportion of his own voters doubt his abilities), suggests that the political environment will remain both volatile and hyper-partisan in nature. Indeed, although the Republicans now control both the executive and the legislature – and will soon tilt the balance of the Supreme Court further to the right – President Trump is likely to face concerted opposition from the Democrats, particularly if they decide to emulate the obstructionist tactics of their Republican congressional colleagues, as witnessed during the entire Obama presidency.
Further, Trump must surely be aware that opposition will not only come from the minority party. Pledging a $1 trillion infrastructure investment package (a figure originally conceived in response to Clinton’s $500 billion plan – Trump characteristically had to do one better and double it), the incoming president will have to deal with stiff opposition and possibly outright hostility from Republican lawmakers, who would view such a massive spending commitment as reckless, frivolous and a hangover from the “big government” policies of the Obama era. Ironically, if Trump actually sticks to this pledge, successful congressional passage will most probably be secured through support from the Democratic Party. If the Democrats are clever on this, they could use this evident disagreement between the President and his own party to drive a wedge between them ahead of the midterms in 2018, while at the same time obtaining a key legislative breakthrough.
As with his commitment to infrastructure spending, Trump’s other key policy proposals are substantial in scope and purposely tailored towards his defining populist campaign themes of American renewal and strength. Domestic-producing energy companies, notably in the coal and gas industry, are expecting an overhaul of regulations and an administration less sympathetic towards environmental protections. Coupled with the proposal to radically reduce taxes, including cutting corporation tax by more than half to 15 per cent, Trump is unabashedly seeking to unshackle business and usher in a new era of American industrial and commercial dominance. However, as was highlighted during the campaign, Trump’s tax policies would likely cause havoc with the U.S. budget deficit and could double the national debt – another issue certain to spur confrontation from Republican lawmakers as well as deficit hawks in the Democratic Party.
On foreign policy, Trump is expected to make a significant departure from his most recent predecessors, both Democrat and Republican. His acceptance of the congratulatory call from the Taiwanese premier, Tsai Ing-wen, may have been an inadvertent lapse of judgement or a portent of a more confrontational stance towards China and its political agenda in the Asia Pacific region. Conversely, his much-reported positive attitude towards Russia could indicate a realignment of global geopolitics, and as a consequence shift America’s position on the Syrian conflict, including a more aggressive and forceful response to Daesh. Indeed, his pick for Secretary of State, ExxonMobil’s former Chief Executive Rex Tillerson, may signify further confirmation of his intention to establish a more ameliorative relationship between the former Cold War adversaries, given Tillerson’s links to Putin.
For the UK, much remains uncertain. Although Trump has been open in his appreciation of the so-called “Special Relationship,” and was one of the very few international figures to publicly support the outcome of the EU referendum and promise Britain some form of trade agreement, his decision to take to Twitter and tout UKIP’s Nigel Farage for the role of UK Ambassador to the US not only rankled the British Government, it also reinforced the widespread belief that his volatile temperament and need to be controversial for the sake of controversy have the potential to upend long-established and delicately-balanced political relationships. This is, of course, part of the very reason he triumphed in the election; to challenge long-held views and tear apart the status quo. While his mercurial nature and lack of ideological consistency evidently proved to be assets during the campaign, they may well turn out to be liabilities in office, preventing him from implementing the very policies he promised to his supporters.
Regardless of whether he is able to make a successful transition from bellicose populist outsider to presidential statesman, Trump will face entrenched opposition from Democrats and likely experience rebellion from within the pro-free trade, deficit hawk ranks of the Republican Party. The first real test of his presidency will be whether his cabinet choices, which include leading captains of industry and finance (again, contradicting his populist rhetoric during the campaign), can make it through the nomination process. The hearings are expected to be heated, intense and could possibly produce yet more controversies, but then President Trump would want and expect nothing less.