One of New Zealand’s best strategic analysts, Dr David Skilling, recently set out the risks we need to prepare for should Donald Trump win the U.S. Presidency again.
As he sets out the obvious reduced United States willingness to provide security guarantees to Taiwan, Japan, and South Korea, Dr Skilling also sets out that AUKUS may be renegotiated as Mr Trump seeks to show he is a better negotiator. The North Korean leader will be emboldened to attack Korea. In Europe, a rapidly withdrawing United States military presence would likely force a settlement in Ukraine favouring Russia. Xi and Putin will be delighted.
“In other words, a second Trump Presidency would lead to a substantial reconfiguration of the global economic and geopolitical system – accelerating some dynamics (global economic fragmentation) and reversing others (a coherent Western alliance). These are not implausible events, but simply assume a more disciplined implementation of actions and statements in the first Trump Administration.” – Dr David Skilling, January 12 2024, Substack
A Trump administration withdrawing from NATO would not be easy to achieve. Democratic Senator Tim Kaine and Republican Senator Marco Rubio introduced legislation passed the Senate, designed to block any U.S. president from withdrawing from NATO without two-thirds Senate approval or an act of Congress. Kaine told me he feels “confident that the courts would uphold us on that and would not allow a president to unilaterally withdraw,” but there would certainly be a struggle. A public-relations crisis would unfold too. A wide range of people—former supreme allied commanders, former chairmen of the Joint Chiefs of Staff, former presidents, foreign heads of state—will surely rally to make the case for NATO, and very loudly.
For us this signals that just as the European reliance on United States military bases and expenditure has sustained European security for over 80 years and would require continued sustained military expenditure from the EU to ward off Russia, so it is with New Zealand, Japan and Australia. An Australia less protected by the United States would need New Zealand to step up and spend more on its defence capability so that we in turn can protect our own sea lanes for trade (and those of our Pacific neighbours).
Other Trump policy positions would be easier to achieve. Bloomberg analysed truckloads of speeches and videos to distil his policy positions into some clarity.
In international trade, Trump has floated the idea of encircling the whole of U.S. industry with a 10% tariff, which would bring a fresh wave of disruptions to supply chains. If we can recall the impact to New Zealand of massive supply chain disruption across most of our manufacturing and construction base, under Trump prepare for it again.
Trump and Biden have been in lock step when it comes to a hawkish position on trade with China. The question is whether under Trump it will get to the point where New Zealand’s economy is damaged by providing ingredient or component parts for products and services with China, when U.S. trade with China is seriously curtailed with anti-trade legislation even more than it is now.
Sweeping executive orders to restrict immigration look likely if Trump regains the Oval Office, along with an order to end automatic citizenship for children of undocumented immigrants born in the US, though that will likely face legal challenges. “They want to feast off the sweat and savings of the American taxpayer,” Trump said at a rally in November 2023. “We’re not going to let it happen. I will end it all immediately.” Any Kiwi thinking they will still be able to emigrate to the United States should consider their plans carefully.
Trump would spurn Biden’s climate policies via measures that include rescinding energy regulations such as fuel economy and emissions standards. He’d also pull back out of the Paris climate accord, a move he made while in office last time. So the idea of sustaining COP accords would get very hard.
“When I am back in the White House, I will bring back a pro-American energy policy at long last,” Trump said in a video message released in November. If re-elected, he’s promised to remove all obstacles to massively ramping up drilling in the US for oil and natural gas. Another priority: doing away with incentives towards electric vehicles and clean energy.
Dr Skilling and Bloomberg are reminding us that New Zealand’s network of an international rules based trade-focused order that enables the free flow of capital and labour and goods will under Trump quickly crack. This a set of risks that New Zealand businesses should as much as they can prepare for. Sustaining disputes by law rather than by might may also be at risk.
New Zealand has gained prosperity over 40 years within a free flow of trade under peacetime supported by minor attacks to shipping and planes, low international trade costs such as tariffs, and confidence that international trade disputes will be settled by law rather than by might is at risk: all of that required a United States President prepared to support that.
New Zealand itself is remarkably crisis match-fit having gone through serious crises about one every two years for the past two decades. So a Trump II Presidency doesn’t necessarily mean we enter some kind of polycrisis doom loop. It means that business and the New Zealand government must broaden its trade base away from the United States and China far faster than they ever have, accelerate our energy independence into electricity, confirm a broad set of materials supply lines, and prepare to secure our own sea lanes with stronger military capacity than we have now.
Preparing for the worst should be our default position in our trade, our savings, our immigration plans, our defence commitment, and in our relationships other than with the United States.
So New Zealand, prepare.
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