Five conclusions from the "Phoney Presidency"

English original of article published in English this morning by La Stampa

Historians describe the period between September 1939 and May 1940, when words rather than weapons were being deployed between Germany and its European opponents, as “the phoney war”. In the United States we have been witnessing the phoney presidency, as President-elect Trump and his allies have deployed words well ahead of being able to take actions. Thank goodness, we can be forgiven for saying, this phoney period will come to an end on January 20^th with his inauguration and we will start to see the real presidency.

The words, as always with the highly media-savvy Trump, have been designed to attract attention, both from the American public and from foreign governments. During his first election campaign in 2016, the man who was then his main tech-billionaire ally, Peter Thiel, Elon Musk’s former colleague at PayPal, said memorably that with Trump the important thing was to take him “seriously but not literally”. Trump doesn’t mean to do everything he says, in other words, but he does, in Thiel’s view, have serious intentions.

Putting together what he said during the campaign, and what he has been saying during this phoney presidency period since November 5^th, I think we can already draw the following five conclusions about what his intentions might be.

Conclusion number one is that it would be very wrong, as some commentators do, to describe either Trump or his Republican Party as favouring a return to the isolationism that characterised American politics and foreign policy in the 1930s. An isolationist does not threaten to invade Panama or Greenland, nor to turn Canada into America’s 51^st state.

Trump and his “America First” movement are unilateralists who hate overseas obligations and hold allies in contempt, but they clearly intend to throw their weight around internationally, not to hide at home. Moreover, if Panama and Greenland hold any real importance in Trump’s mind, it must be because he sees them as tools in America’s rivalry with Russia and China, not as ends in themselves.

Conclusion number two is that Trump believes that he needs to look strong if the American public is to remain convinced that he will “make America great again” but also that he needs to look strong and confident if he is to achieve his goals in foreign policy. His provocative words about Panama, Greenland and Canada were designed to serve both those purposes. In line with Thiel’s comment, he should not be taken literally in either case, but he does have a serious intention to look and act like a strongman.

This needs to be born in mind when drawing the third conclusion, about Ukraine and Russia. Everyone, especially Vladimir Putin and Volodymyr Zelenskyy, knew that Trump’s claim to be able to end the war “in 24 hours” should not be taken literally. But if he is serious about achieving a ceasefire, he will now have to look and act as a strongman, not in his dealings with Zelenskyy but rather with Putin.

Soon after January 20^th, he and his chosen envoy, Retired Lieutenant General Keith Kellogg, can be expected to seek ways to display this tough stance: almost certainly by continuing some military aid to Ukraine, but also most likely by making it clear that Putin’s maximalist demands have zero chance of being accepted. It is Putin’s demands that are preventing any serious peace talks, not Zelenskyy’s.

As a self-proclaimed strongman president, Trump will soon want to give Putin the diplomatic equivalent of a sharp push in the chest, to shove him off balance and make it clear what stance America is taking. His decision about how to do this will be the most important early signal about Trump’s foreign policy intentions, a signal that will be watched for not just in Moscow and Kyiv but also Beijing, Tehran and Pyongyang, for China, Iran and North Korea are America’s other foes. He and his national security team will surely know that this decision and action will likely set the tone for the whole four years. Its importance cannot be over-estimated.

The fourth conclusion is that the trickiest contradiction to be resolved among Trump’s proclamations concerns America’s public finances. He and his Republican supporters are known to want to increase US defence spending and to show to China that America intends to preserve its military superiority. Yet his calls for NATO members to set a new target for defence spending of 5% of GDP, compared with the present 2% target, lack credibility when the defence budget he is inheriting from President Joe Biden amounts to only 3.4% of GDP.

For Italy to increase spending from its current 1.5% of GDP to 5% would plainly be impossible, given the fiscal constraints the Meloni government lives under. But for America to jump from 3.4% of GDP to 5%, at a time when the US federal budget deficit is running at 6.3% of GDP is also not plausible, especially for a Trump administration which has promised to maintain income tax cuts that are due to expire. America’s total public debt exceeds 120% of GDP, which is not far short of Italy’s 138%.

This also leads to the fifth and final conclusion: that the billionaires surrounding Trump, led by Elon Musk, are likely to be successful in pushing his administration to deregulate all sorts of business sectors, whether energy, social media or finance, but not in getting him to make major new public investments, including in defence. Deregulation costs the Treasury nothing, at least not directly, and brings the lure of faster economic growth, at least in the short term.

Let us just add one further conclusion. It is that anyone, including Argentina’s President Javier Milei or Musk, who thinks that there is now a libertarian and deregulatory axis linking Trump, Milei, Meloni and other European far-right parties doesn’t know anything about Italy. It will soon be time for Musk and Milei to learn that the Meloni government may stand for many things, but deregulation, libertarianism and free speech are not among them.