A letter from America: views from DC
13 Mar 2017| and

We were in Washington recently. Like much of the rest of the world, the town is trying to understand the new US administration. Surprisingly, some of the Washington establishment isn’t overly alarmed. We can’t rule out the Stockholm effect as an explanation, but there were certainly positive vibes to be found. Our interlocutors included a range of people from government (both US and other), business, academia and think tanks. There’s no strong consensus on even some of the broad brush questions, but here are our impressions from the week.

Let’s start with the administration itself. The Cabinet is slowly filling up and, while it seems to be taking time, it’s actually not much slower than its recent predecessors. Where progress is really lagging is in fleshing out the hundreds of lower level positions. It’s not unusual for that to take many months, but most of the names aren’t even rumours yet. We’re told that it could be the end of the year before the DC firmament is even mostly full.

That’s sometimes being ascribed to the inexperience of the Trump team. But an alternative explanation might lie in the 2010 Pre-Election Presidential Transition Act, which gives greater freedom for the transition team to work on new policies. If that was the Trump team’s focus, which is consistent with the unprecedented flurry of executive orders issued in the first few days after the inauguration, it would impact the time they could spend recruiting and nominating. Because the 2012 election returned the Obama team, there’s no previous experience of a new administration coming into power under the revised arrangements.

On the Cabinet itself, we heard generally reassuring assessments of the defence and national security team. A common view is that the decades of experience among the senior players, especially Generals Kelly and Mattis, will pull the administration back to the mainstream on security matters. Cited examples included the restatement of the one China policy after an initial excursion into a more exciting place, and the restatement of NATO’s centrality to America’s Europe security policy. This school of thought holds that there’ll be more continuity than change in US international security policy.

We’re not totally convinced. Firstly, we’re not sure that NATO will continue to be an object of much affection, especially if European solidarity gets any shakier. Second, and much more important for Australia, we don’t see any evidence of a coherent policy on Asia. Nor is there any obvious player who will drive one. It’s possible that an influential official will be appointed to a sub-Cabinet role and play a role similar to Kurt Campbell when the pivot was conceived, but that remains to be seen. If there’s no policy for managing the biggest strategic competition of our time, it’s hard to take too much solace. It now appears that the Congress is trying to fill the void, and perhaps external players such as Prime Minister Abe of Japan will also shape American thinking on the region.

On trade and economic policy, there weren’t even unconvincing assurances to be found. On the whole, we encountered much bleaker outlook than on the security front.

By jettisoning the TPP, the United States has abandoned any pretence of leadership on trade liberalisation. Lest there be any lingering hope of a resurrection, we were told repeatedly that the TTP is dead. So if China wants to seize the agenda on multilateral trade agreements, the way is clear. Under Trump, the United States looks almost certain to focus its efforts on bilateral trade agreements, which will take years to negotiate.

In the meantime, there’s a risk that Trump will set off a trade war by aggressively using anti-dumping provisions, or perhaps even by declaring China a ‘currency manipulator’ and launching punitive countermeasures. Worse still, we could see the United States walk away from the WTO in order to gain more favourable outcomes for US businesses. Indeed, the current tax reform plan proposed by Republicans—a destination-based tax—is incompatible with existing WTO rules. It would be a supreme irony if the United States renounced the existing rules-based international trade regime (which it helped design) while continuing to lecture others about the importance of a rules-based order on the security front.

So much for policy. The elephant in the room is the frequently eccentric behaviour of the President and his public spokespeople. On that, opinions were divided. Some found the angry 3AM tweets and focus on things like the Inauguration Day crowds worrying. We’re inclined to agree, but a surprising number of people put it down to showmanship, or even to politically brilliant use of social media to circumvent the press and talk to the Trump electoral base directly. There’s also a darker school of thought that ascribes it to a cynical technique for keeping the press talking about things that don’t matter, and for letting anti-Trump angst burn itself out.

Perhaps the best advice we got during the week was to ignore the sound and light show that surrounds President Trump and instead to focus on what he does. Then, we’re told, it will all become clearer. As an example, if you read everything about possible links to Russia, you might conclude that the US is getting set to give President Putin a soft ride. But actions, including making recent comments to a visiting Ukranian politician about retaining sanctions on Russia, suggest a different story.

To finish on a parochial note, we were surprised at the worry engendered by that phone call. Clearly there was some concern around town that a close relationship may have been badly damaged. Hopefully we pulled off some amateur diplomacy by explaining that the phone call wasn’t going to cause Australia to pull the plug on the relationship just yet.