THE MARMITE PRESIDENT / MACLEOD FINANCE

The Marmite president

People either love Marmite or hate it. It serves not just as a metaphor for opinions about President Trump, but for his policies as well.

ALASDAIR MACLEOD

The lesson from his first term failures, and doubtless from observing Argentina’s President Millie, are that if you hit the ground running you can swamp all opposition. 

With so many executive orders issued on his first day plus their rapid implementation, Trump’s critics were thoroughly confused and unable to organise cohesive opposition to his plethora of policies.

But observing his general direction of these executive orders and his comments on other matters, we can form an initial picture which we may modify when his new administration beds in. 

An example where there seems bound to be an about-turn is on the promotion of cryptocurrencies. 

Does the government establishment really want to promote an anti-dollar?

It goes against preserving faith in the fickle fiat dollar, and officials at the Fed and Treasury are bound to oppose bitcoin in particular. 

And on monetary matters, Trump’s demand for lower interest rates is not his to call and compromises the Fed’s role — Powell will have to be careful in his handling of this issue, but he will almost certainly assert the Fed’s independence. 

That clearly is a red line. 

And if Powell is forced out or decides to resign on this issue, the dollar will immediately suffer.

As a general observation, Trump has advertised his alarming ignorance of economics and economic history. 

His desire to cut income and corporation taxes has merit, but his policy of funding these cuts by increasing trade tariffs does not. 

Economic history should have informed him and his advisors of the damage created by the Smoot-Hawley Tariff Act of 1930, which was in addition to the earlier Fordney-McCumber Tariff of 1922. 

Trump’s tariffs will be on top of the creeping US tariffs of recent decades, together with a killer factor not in existence in the 1930s: extensive and complex global supply chains whose premature destruction would be economically catastrophic.

Trump seems to have grasped the necessity of addressing public spending, hence the establishment of DOGE run by Elon Musk. 

But instead of cutting government, the intention is to make it more efficient. 

The initial intention was for DOGE to reduce wasteful spending and eliminate unnecessary regulations. 

But the executive order establishing it changed it to “modernise federal technology and software to maximise governmental efficiency and productivity”.

Essentially, DOGE is Trump’s attempt to create budget space to allow him to spend instead of Congress. 

Trump is a spendthrift, as his intention to allocate $500 billion to AI infrastructure and development proves, when China’s DeepSeek does the same job for only $5 million. 

And even without an economy underperforming expectations, the budget deficit will increase partly due to tax cuts underfunded by trade tariffs, partly due to the inflationary consequences of tariffs driving interest rates higher, and partly because of the recessionary consequences of his tariffs on world trade.

On foreign affairs, Trump is the antithesis of a diplomat, knowing nothing other than boardroom bluster. 

He seemed to think he can stop the war in Ukraine on the drop of a hat. 

However, he has two big hurdles. 

So far as the Russians are concerned, America has a history of breaking agreements so is not to be trusted. 

And they have learned how to deal with Trump from his last time in office before Biden.

With respect to Israel, Bibi Netanyahu is a very skilled political operator with the ability to outwit Trump. 

The Israeli lobby in Washington is extremely effective and it is impossible for any US president to ignore. 

The probability that American can now be cajoled into attacking Iran probably went up several notches post-Biden on January 20.

The world changed under the Biden regime, evolving into an increasingly discredited America with its NATO puppets comparing poorly with an Asian axis ironically strengthened by American sanctions. 

And China’s exports to BRICS now exceed those to America. 

So, are Russia and China frightened by US policy? 

Not really. 

Despite the evidence to the contrary, Trump and many in the West delude themselves that sanctions work, that Russia’s economy is close to collapse, and that China is being emasculated by recession. 

The only bit that’s true and relevant is China’s exports to the western alliance are suffering because demand in America and Europe is falling — a signal which those who throw stones in glass houses would do well to observe.

China is no longer as reliant on US imports as it has been, and she has gone a long way towards achieving her objective of reducing dependency upon them. 

This is the stronger China which is likely to take a more relaxed and unconcerned view of Trump’s bull-in-a-china-shop diplomacy.

In summary, Trump is on course to screw up the US economy and those of the rest of the western alliance as well. 

Diplomatically, he will achieve little other than underline America’s decline as a world power, though the prospects of a war with Iran have probably increased. 

The world is bifurcating, and the Asians have the better prospects.

But with respect to the Marmite President, there is some good to remark upon.

By withdrawing from the Paris Agreement on climate change, he has dealt a serious blow against the ESG extremists. 

And he is also taking a robust stand against wokism. 

While Brussels and Britain’s deeply socialist government are horrified at Trump’s renunciation of their cherished dogmas, woke politicians in individual governments are actually irresolute waverers, bending with the wind of opinion. 

Not least, because they want to be re-elected by voters who are increasingly sick of gender issues and anti-white memes.