We live in a country where rules of conduct are determined by law and order. This is what make a fair and just society. This is also the foundation of all democracies. But, Donald Trump does not seem to conform to this vision.
Trump has built a significant part of his career by circumventing laws and regulations. He disregards democratic institutions. He does not respect agreements that he himself signed. His career is sewn with lawsuits, subversion, intimidation and contempt for the courts. However, he succeeded becoming a rich man with admiration of many Americans.
“Donald Trump” code is relatively simple to understand: I am the strongest, so I can do whatever I want. And it seems to be working, Being now elected President of the United States, he can apply this code to the entire United States, even extend it to the entire world. We are the most powerful country on the planet, so we can do whatever we want .
Here are some examples of subversive decisions he could implement. These will challenge agreements, laws and regulations, but also compromise American democracy. These will have significant consequences for the American economy and the established world order.
Trade agreements
Donald Trump promised during the presidential campaign that he would impose 10% tariffs on United States imports. But, United States is a signatory to the World Trade Organization (WTO) and to many other trade agreements, including the agreement signed between the United States, Mexico and Canada (USMC). The latest, provides that almost all goods traded between those countries are exempt from customs duties. By imposing 10% tariffs on Canada and Mexico, Trump will renege provisions that he negotiated.
There will be retaliation of other countries who will impose their own limits on importing American products. This could cause a cycle of slowdown in the global economy and possibly a recession.
The independence of the FED
Even more serious, the new President has shown some dissatisfaction with the rise in interest rates. He has repeatedly hinted at dismissing Jerome Powell, the chairman of the “Federal Reserve-FED” central bank of the United States.
Independence of central banks from political influence is a principle recognized throughout the world and is extremely important. Central banks must stay free from any political influence or partisan purposes, particularly during an election campaign.
Trump does not have the power to fire Powell directly. Still, he can exert strong pressure for him to resign, and also reshape the composition of the Fed. 1
Trump taking control of US monetary policy would have some serious implications. He would decide for himself whether to raise or lower interest rates. This would affect inflation rate, unemployment, and the US exchange rate. Moreover, investor confidence would be undermined.
Deportation of illegal immigrants
Trump intends to deport illegal immigrants. To do so, he would be using an 18th-century law, the Alien Enemies Act, passed during wartime. This law allows the president to expel citizens of a nation at war against United-States without needing the approval of Congress.
The United States is not at war with most of the countries where illegal immigrants come from. But, to circumvent the law, he would consider that Latin American drug cartels have corrupted their governments. He believes these governments can be considered enemies. Thus, they are at war. 2
Trump goes very far in the interpretation of an 18th-century law. Still, there will likely be many lawsuits. Moreover, the operation is estimated to cost at least $315 billion.
Can chaos be avoided?
These are just a few examples of non-conformity that Donald Trump has promised. His decisions are based disregarding laws, regulations, and the established order. That is to say, the law of the strongest. All this is not necessarily a good thing because it compromises social peace.
Trading partners will likely respond to protectionist policies by imposing trade restrictions of their own. This action will wipe out the scope of trade agreements and could potentially trigger a global economic downturn. Possibility, a recession. Economists believe that protectionism can be precursor to global recession.
Monetary policy, if undertaken under the erratic mood of an American president, could make financial markets insecure. It may also bring more inflation and unemployment.
Lets hope that deportation of illegal immigrants will happen without violence, in a country where it is legal carrying weapons . That children and parents of the deported immigrants will stay safe.
Will Trump have to sign agreements with other countries to deport his illegal immigrants? What credibility does he have?
Louis Bellemare
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