President-elect Donald Trump will take the oath of office January 20th facing immediate challenges. At the top of his priority list will be the war with the Islamic State, better known as ISIS. His choices of Marine Gen. Mike “Mad Dog” Mattis for secretary of Defense and Lt. Gen. Mike Flynn as National Security adviser indicates the new president will have dramatically different policies towards America’s number one enemy.
Trump’s first priority domestically will be creating new and high paying jobs for the middle-class. He has already made his start with the salvaging of 1000 American jobs that would have gone to Mexico with the Indiana-based Carrier Corp. It’s a certainty this sort of negotiation at the highest corporate level will continue.
The third priority will be fixing the failed healthcare law known as Obamacare or the Affordable Care Act, which is now unaffordable for millions of applicants. He has named his vice president, Mike Pence, as the head of a select group to propose new and innovative solutions to a total repeal of the law. Whatever the outcome will eventually be, Barack Obama’s main legacy as president will disappear with the stroke of Trump’s presidential pen.
The new president’s biggest international challenge after ISIS will be the business arrangement with China, our biggest trade partner. However, as the fallout from his recent conversation with the president of Taiwan indicates, an increasingly assertive China poses the most vexing and far reaching challenges for American prosperity and security. Trump is well aware of the situation and will assign competent trade negotiators to calm the storm over unfair trade practices and corporate espionage by the Chinese.
The main problem Trump will deal with when working with the Chinese government is the communist country’s hyper growth supplying western consumers with inexpensive goods and attracting Western investment to transfer technology. It is well known the Chinese have not played by the established rules and norms of global trade.
Trump has frequently criticized China for subsidizing exports, manipulating its currency and other abusive practices, and promised to better enforce U.S. rights under international agreements. He has threatened to slap a 45 percent tariff on Chinese imports to get a better deal through those agreements.
Moreover, with Trump’s overtures to China’s biggest nemesis, Taiwan, the $320 billion annual deficit on trade in goods and services with mainland China takes a new twist as Trump adds the possibility of a new two-China policy for American-made products. What will be the Chinese reaction? Trump can also bring up Chinese aggression in the South China Sea where they have built artificial coral islands capable of military use.
Americans may quickly see the skilled business negotiator they elected as their new president. There are clear reasons he has appointed business professionals to his team including Treasury secretary Steve Mnuchin and Commerce secretary Wilbur Ross. Both men are highly adept in international financing and negotiations and familiar with Chinese practices in international banking. Not only will these men be invaluable in the Chinese equation with American business, they are both fully versed on how to stop international banks from laundering ISIS revenue from their oil profits.
Trump has a business plan coming into the presidency. He is well aware that the US’s huge trade unfairness is financing a massive Chinese build-up in naval and air power, militarization of the South China Sea and about 20 port facilities the Chinese navy can access in Asia, Africa, the Middle East and Europe. President Obama was hesitant challenging China’s artificial islands and militarization of the vital South China Sea, Trump will not be.
Furthermore, the South China Sea has huge sea-bed mineral deposits and is a vital passage for some $5 trillion annually of international shipping. Open access for American commerce is vital and will be secured by the U.S. Navy in cooperation with regional allies since World War II. That means President Trump must prepare for a diplomatic and perhaps military showdown in the Pacific and confront Beijing on the massive trade imbalance that finances Chinese mercantilism and adventurism.