Donald Trump may capture headlines by goading China on Twitter, irritating Theresa May by suggesting Nigel Farage would make a good ambassador to Washington and putting together a tax programme that seems destined to exacerbate the US budget deficit. Flying in the face of much of what he said he would do on the campaign trail, he is also assembling a business team largely unknown and untested in government circles. But there are two areas where his policies might have a profound effect. Trump has said that he is going to soften financial-sector regulations and reset the US trade agenda. While Trump said a lot of things on the campaign trail, many of which will not see the light of the day, he has also made strident speeches away from the crowds and TV cameras. At the New York Economic Club, he told an audience largely made up of bankers and financial professionals: “The regulation industry is one I will put an end to.” He made it clear that he thinks over-regulation is strangling the US economy, and one of the keys to unlocking growth is to “scale back years of disastrous regulations unilaterally imposed by an out-of-control bureaucracy”.

Ironically, on the other side, trade, he wants to instead regulate. He wants to convince WTO (World Trade Organisation) to ban nations from intervening in their currency markets (except in emergency conditions) and wants to renegotiate US trade agreements that carry special interest deals. Moreover, within the US, he wants to regulate schools by empowering parents over wider school choices for their children, thereby unleashing a significant and a lasting effect on upgrading working skills that will ultimately narrow the wage gap by raising real wages through raising the skill level. And these are the very policies that are finding a lot of traction with the American people who – post-2008 financial crisis – would rather be led by someone who maximises national interests over global returns and one who presents short-term solutions against protecting the yet-to-be born generations. Today this has happened. Right from Brexit to Netherlands to Philippines to Greece to the victory of Mr Trump in the USA, the foreign policies going forward will be defined mainly by national economic interests and led by people who themselves have practically been movers and shakers of their respective economies.

To achieve all this, Mr Trump wants to instil corporate governance in the US decision-making process through a hand-picked team of corporate entrepreneurs tasked with the responsibility of ensuring transparent and result-oriented policies. This also means that it will change the way America does business. On financial regulation, he singles out the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in the wake of the financial crash, as the primary culprit. Though there is still nearly a month before he takes office, even without formal action till then by the White House, there is little doubt the tone from the top is changing, and this will also change attitudes among regulators. The US financial community is already feeling as if the regulatory burden is getting lighter even before any official moves are yet to take place.

On the trade side, Mr Trump on the other hand wants to regulate. He firmly believes that unfair trade provisions resulted from a series of special-interest deals in virtually every trade agreement America has ever entered into – sugar being the most famous. Today, according to the analysis of the US Agriculture Department data, for every producer benefitting from the US sugar tariff, 70,983 American consumers are cheated by sugar prices 50% higher than the world prices. It is interesting here to note that unlike what Mr Trump claims, post-war trade agreements by themselves actually did more to improve America’s competitiveness than eroding it. In nearly all agreements, the principal trading partners generally lowered tariffs more than the US did. After China joined the WTO, Beijing cut the average tax it imposed on foreign-produced goods to 3.2% in 2014 from 14.6% in 2000. But the US didn’t change its taxes on Chinese goods. After the US entered the North American Free Trade Agreement, Mexican taxes on US imports fell to zero from roughly 12.5% and Canadian taxes on US goods dropped to zero from roughly 4.2%. In return, US taxes on Mexican and Canadian imports fell to zero from 2.7%. Ironically, this further pushes the Trump regulation agenda, since he believes that the largest source of unfairness in world trade today is currency manipulation, which distorts exchange rates and trade patterns, cheating consumers and producers. And this he wants the WTO to regulate. In summary, the mainstays of Trump’s trade strategy are to eliminate currency manipulation and special-interest provisions in existing trade agreements; industrial policies that seek to reward or punish businesses based on where they invest; to manage recovery; targeted and time-lined protectionist policies to restrict undesired trade; and to reduce the number of taxes and restrictions on domestic trade.

Critics say that Obama was too blinded by his shibboleths, his own brand of political correctness, to let good things happen in a way that would let him take credit for them. He failed to lean over things that were working – like fracking, like corporate America’s steady effort to encourage more consumer involvement in disciplining health-care costs, which ObamaCare might have borrowed from. Trump on the other hand, would like to dive straight into projects that embrace jobs and strengthen US manufacturing even if they come at the expense of environment. The plan is to engineer US multinationals’ repeat of their global endeavours of the 60s’ and 70s’. Only time will tell whether his policies bring the recovery and growth he is claiming, but successful or not, Trump’s real charm is in not being Obama.


             The writer is an entrepreneur and economic analyst.