Why the world fears four more years of Trump

Biden has repaired relationships with Europe, which has been increasingly falling broadly into line with his administration’s approach to trade with China. The United States’ support for NATO, Ukraine and the joint European and American sanctions against Russia have helped restore some trust, while America’s highlighting of the impact of China’s mercantilist policies on other economies has resonated within Europe.

The European Union’s proposed tariffs on China’s electric vehicles, its investigations of China’s solar and wind turbine subsidies that might also lead to tariffs and the language EU officials have used to describe China’s state-led trade policies have increasingly been in sync with the administration’s.

If Trump regains office, imposes tariffs on all European exports to the US, again threatens to withdraw from NATO and other international institutions, and cuts off aid to Ukraine, Europe’s attitudes towards both the US and China would inevitably regress and present China with an opportunity that it could exploit.

That opportunity could be enhanced by the success of Marine Le Pen’s National Rally in the first round of the French elections at the weekend.

National Rally’s policies echo some of Trump’s “America first” prioritisation of domestic issues over international engagement, and protectionism over globalisation.

The party’s leaders have been critical of China, its Belt and Road Initiative and the trade imbalances between China and Europe. But they have been equally critical of the US, which Le Pen has described as “an ally that is not a friend and can behave like a competitor, even an adversary”. They are also sceptical towards the EU, although National Rally has walked back from a former policy of exiting the EU.

At the heart of the EU has been the relationship between France and Germany. Differences of opinion over the approach to Ukraine, Russia (National Rally has historically had a strong relationship with Russia) and China have the potential to fracture what has been described as the “engine” of the EU.

Germany, with stronger ties to China’s economy than the rest of Europe, would be even more targeted by Beijing, which has already been trying to exploit the differences within Europe to forestall trade sanctions.

With Trump pledging, again, to make allies pay for a US military presence (he sees defence relationships in purely transactional and commercial terms), it isn’t just Europe where tensions could arise, again.

Key US allies in the Asia Pacific such as Japan and South Korea would also find themselves faced with the same threat of either paying, directly or indirectly, for a US military presence or having the troops withdrawn. On top of the baseline tariffs that all Asian economies outside China would face, the threat of a fracturing of military and trade alliances in the region would also please China and North Korea.

Trump’s economically illiterate convictions that trade wars are good and easy to win, that a trade deficit is a signal that America is being ripped off, and that those on whom tariffs are being levied pay the duties (rather than, as most respectable analyses have concluded, American consumers) mean a new round of tit-for-tat trade wars is inevitable if he wins the November election.

His trade policies would damage not just China’s economy but the global economy and drive up inflation rates in the US and elsewhere.

They would also have a significant impact on the global response to climate change.

Trump and his advisers have made no secret of their antipathy to Biden’s heavily green-tinged Inflation Reduction Act, with its $US360 billion ($539 billion) subsidies for green technologies such as electric vehicles and solar and their supply chains.

While Trump, in his initial term, was concerned about securing America’s supply of critical minerals and signed an executive order in 2017 to that effect, his was a policy directed at encouraging domestic supply rather than, as Biden has done, effectively including America’s free trade partners in the attempt to diversify America’s access to critical minerals away from its reliance on China.

Trump has made it clear that he detests Biden’s environmental policies (he wants a boom in fossil-fuel production) and Biden’s encouragement of the take-up of electric vehicles in particular.

The tax credits for EVs and solar, and investment incentives for their manufacturers, would be targeted by a second Trump administration, which would impact their take-up and the demand for the critical minerals, including lithium, nickel, cobalt and copper, used to produce them.

That, of course, would have implications for Australia and the multibillion dollars of funding the Albanese government has earmarked for boosting the production of critical minerals as part of its “Future Made in Australia” strategy.

Before Thursday’s debate, the outcome of the US election looked tight, with Biden having a realistic chance of retaining the presidency.

After Thursday, the rest of the world will have to take the threat of Trump 2.0 and an administration more determined – and better prepared than it was in 2016 – to change the nature of America’s relationships with the rest of the world even more seriously.

It’s an unsettling prospect for any of America’s allies and trading partners.

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