With Trump the Gray Rhino Coming, Is Taiwan Ready？
The Storm Media Editorial, July 3, 2024
Following the disastrous debate performance by President Joe Biden, media outlets such as the New York Times, Time magazine and The Economist have urged him to quit his candidacy, setting off the groundswell of "dump Biden" sentiment and significantly increasing the likelihood of former President Donald Trump's return to the White House. His return will inevitably bring about radical economic nationalism and right-wing anti-immigration policies. Seeing Mr. Trump, the "gray rhino," charge towards us, is Taiwan getting ready to bear the impact?
Optimism about Trump Fuels “Replace Biden” Sentiment
Mr. Biden's dismal debate performance, resulting in 72 percent of voters deeming him unfit for office, triggered widespread anxiety within the Democratic Party. The past nightmare of Kuomintang's "replacement of presidential candidate" may repeat in the Democratic Party. However, the party is considering formally nominating Mr. Biden in mid-July to calm the tumultuous "replacing Biden" agitation within. Regardless of Mr. Biden’s being replaced or not, the Democratic Party has already been seriously harmed. Additionally, with the Capitol Hill case, the U.S. Supreme Court ruling that Mr. Trump enjoys "immunity from criminal prosecution" significantly reduces the possibility of the case being adjudicated before the U.S. elections, marking a major legal victory for Mr. Trump and also a boost to the Republican Party.
Mr. Trump is highly likely to return to the White House soon. Are we ready for the re-emergence of the Trump era? His most distinctive banner is simply radical “economic nationalism.” He said that he would definitely restart the tariff war against various countries, with all goods imported into the United States being imposed 10 percent tariff, and goods from China 60 percent. Moody's analysis pointed out that if Mr. Trump's trade policy should be implemented, it would plunge the United States into recession in mid-2025, coupled with a jump in unemployment and inflation, hitting the low-income people the hardest. The era of global free trade would thereby go into history, and the world would return to the trade pattern of the 1980s, that is, the trade system before the General Agreement on Tariffs and Trade (GATT)/ World Trade Organization (WTO).
Economic Nationalism and Impending Inflation
Robert Lighthizer, most likely the next Secretary of the Treasury, authored a new book No Trade is Free. Lighthizer, with notable achievements as early as the Reagan era, previously led the signing of the ”Plaza Accord” with Japan, engaged in currency wars that forced the appreciation of the Japanese yen (JPY¥) , and implemented a quota system to block Japanese steel imports into the United States. Since then the Japanese economy entered "lost three decades." The same techniques in US trade policyies also dealt a blow to Taiwan then. In 1987 the United States invoked "Section 301" of the US Trade Act that forced the New Taiwan Dollar (NT$) to appreciate by 33 percent within 2 years. As a result, traditional industries quickly relocated overseas, a large number of Taiwanese workers lost their jobs. The overall economy plunged into a crisis of "industrial hollowing out," with wealth concentrating in northern Taiwan, leaving central and southern Taiwan in depression.
Known as the "hawkish helmsman" of the United States on China, Lighthizer was inclined to wield tariff weapons. Re-emerging in 2017 as the U.S. Chief Negotiator, he engaged in the U.S.-China trade war. Once Mr. Trump returns to the White House, he will undoubtedly be the architect of tariff barriers. Lighthizer pointedly targeted China as the most threatening country and the most dangerous rival to the United States, characterized by "latent militarism and extremism." His ultimate goal is to decouple the United States from China. Given the heavy reliance on China in economy and military-related product categories, he would abandon the long-standing American advocacy of multilateral trading systems, especially the WTO and the Trans-Pacific Partnership (TPP), in favor of tough economic nationalism to eliminate the half-century-old "twin deficits" — fiscal and trade deficits.
In response to the "Trumponomics 2.0", 16 Nobel laureates in economics, led by Joseph Stiglitz, recently issued a joint letter of criticism. They believe that if Mr. Trump takes office, he will drop an inflation bomb on the US, and the tariff burden will ultimately be borne by consumers. Scholars warn that Mr. Trump's economic policies will push up inflation and cause long-term damage to the global economy.
Immigrants As Scapegoats and “Asian Discrimination” Pose Grave Concern
Another point of concern is Mr. Trump's robust call for "nationalism" against immigration. Mr. Trump redirected all debate issues to "border immigration." He advocates not only ending border immigration but also deporting illegal immigrants nationwide through launching the largest comprehensive roundup and deportation operations in American history in order to protect legitimate Americans from illegal immigrants taking away jobs. Mr. Trump's "border issue" swept the 2024 election, stirring up racist sentiments, forcing Mr. Biden to follow up on this issue, as people from Texas to New York felt deeply about it.
It's conceivable that Mr. Trump's return to the White House would usher in an anti-immigration policy and the US politics would move to the far-right. The nightmare of "Asian discrimination" may re-emerge. Mr. Trump used to insist on the term "China virus," involving sensitive racial issues. Taiwanese, with their Asian heritage of black hair and yellow skin, are certainly not immune. In the diplomatic field, Mr. Biden is better at using diplomatic means to consolidate democratic countries into a global anti-China network to contain China's rise, including the Quadrilateral Security Dialogue (QUAD), AUKUS, and recent regional formations such as the U.S.-Japan-South Korea and U.S.-Japan-Philippines quasi-alliance relationships, the U.S.-Vietnam-India trilateral alliance, the existing Five Eyes alliance, and even an "Asian NATO" yet to be hammered out. In contrast, Mr. Trump once requested Japan and South Korea to pay for military equipment. Regarding the Russia-Ukraine war, he would declare an immediate halt to military aid to Ukraine upon taking office with a view to forcing Ukraine to the negotiating table. Mr. Trump even considered withdrawing from the North Atlantic Treaty Organization (NATO), or otherwise reducing American assistance to NATO.
Maintaining Security in the Taiwan Strait to Depend Entirely on the Art of the Deal?
Facing tensions in the Taiwan Strait caused by Chinese Communist military exercises, will the United States truly defend Taiwan once Beijing sends troops over? Although Mr. Biden stated four times that the United States would defend Taiwan, he proudly proclaimed during the debates that he was the "only president who did not let American soldiers die in war." He stayed out of the Ukraine war and withdrew American troops from Afghanistan. In an exclusive interview with Time magazine in May, however, Mr. Trump refused to say whether the United States should defend Taiwan and reiterated that the United States would not help allies that "do not pay."
Mr. Trump has always believed in the "art of the deal," leaving all allies worried that he would regard all international relations as transactions rather than enduring, moral alliances. As he famously said: "China is the desktop, Taiwan is the nib of the pen." Mr. Trump is a realist in economics and an isolationist in diplomacy. Mr. Trump's return to the White House will be a "gray rhino" for Taiwan's security issues. President Lai Ching-te, said to be intent on "visiting the White House," is keen on creating confrontation and division in politics, causing Taiwanese society to fall into idling. Under these circumstances, how could Taiwan get American military assistance? Or is Mr. Lai just thinking about how to seize the opportunity for a "Trump-Lai call" before Mr. Trump takes office?