America has long been a nation divided.
It’s only a couple of lifetimes ago that they were embroiled in a full-on civil war. Hardly surprising that the Great Divide has continued into the 21st Century. The very first Presidential election of the new millennium came down to hanging chads on a few punched cards in a state run by Dubya’s brother Jeb. The 25 electoral college votes for Florida went to Bush and he beat Al Gore to the top job by 271 votes to 266. It went all the way to the Supreme Court but left no one feeling that this was a great day for democracy.
Would a Gore presidency have meant no Iraq war, proper action on the environment and a more distant relationship with Tony Blair? We’ll have to squeeze that into the very large file marked ‘Might Have Beens’…
Fast forward 16 years and it’s Hilary Clinton representing the establishment and Donald Trump as the surprise winner of the Republican nomination. This is a phenomenon that we are denied by our own electoral system. In America or France you can come out of nowhere and end up running the country. In Britain you have to grind and back-stab your way to party leadership if you want to be Prime Minister one day. I remain convinced this is why Tony Blair joined the Labour party – a cynical calculation that he stood more chance of ascending to the top job than he would with the Tories. Given the later suspicions around the death of Dr Kelly, I wonder if there’s a case for taking another look at the sudden death of John Smith?
With or without alleged help from Vlad the Destroyer, the Donald surprises even himself by winning the election. He’s gone on to become one of the most controversial occupants of the White House in the modern era. Is he a hero or a villain? The jury’s still out. He’s right to be annoyed with China because their policy of deliberately undervaluing the yuan has hurt America as well as other Asian countries trying to compete. China has an annual trade surplus with America of $367 billion. In other words, its exports to America outweigh its imports from America by that gargantuan amount.
China’s exporters are not allowed to hang onto those dollars. The mighty state demands that they hand them straight over to the central bank in exchange for local yuan. Thus has the central bank accumulated $3 trillion in US Treasury Bonds. China depends on America for 3% of its GDP, whereas the People’s Republic represents just 0.7% of U.S. GDP. You might think that gives Donald the upper hand in the trade wars he’s now started, but directionally he needs to watch out. In the last decade China’s expanding global trading reach means it has halved its dependency on America. In the same ten year period, America’s reliance on China has increased by 500%. Be careful who you mess with Donald…
History is against trade wars having a beneficial effect. Trump’s posturing makes good domestic reading ahead of the mid-term elections, but his track record of U-turns and policy made by Twitter means we can’t assume he truly wants a long term global dispute. As President, he has followed the advice of the grandfather of the personal development movement, Earl Nightingale, ‘when in doubt, watch what everyone else does and then do the exact opposite’. This element of surprise means that other countries don’t know how to react. He simply doesn’t follow established rules or norms.
That’s what made him enormously successful in business. And, this Thursday, in our final Boardroom Breakfast of 2018, I will share 7 Trump strategies to grow your business in 2019. There are just a handful of seats left at Home House private members’ club near Marble Arch. Click here if you want to grab one.
Until next time.