The current global situation is undergoing tremendous changes. The United States under Trump's administration is the main promoter (or rather, the destroyer) such changes. Therefore, understanding the changes in the United States is the key to grasp changes in the world situation and future trends. How should we understand the latest phenomena in the United States? Based on a close observation on the United States, Anbound's chief researcher Chan Kung has sorted out 14 points on global and American timelines.
1. The "three changes", namely the defects of globalization, urbanization, and welfare have changed the current world, leading to social differentiation and more advantageous to capitalists. However, about 20% of the world population would be insecure, while middle income and welfare remain relatively stagnant. All these have caused dissatisfaction, and under the impact of the refugee crisis, such dissatisfaction has led to the emergence of protectionism globally.
2. During the American presidential election, we see the competition between Donald Trump and Hillary Clinton. Clinton represented the liberals and stood on the conventional political correctness; Trump stood on the side of protectionism and he was the one being elected. It should be pointed out that Trump's election was not his personal victory but the victory of the conservatives in this major world power. Many people hate Trump but they do not really hate his policies, so even if another person was to be elected, the result might still be the same, as this is the general trend.
3. After Trump's victory, the first thing he did was tax reform. Despite the difficulties he faced, this was finally done. The tax reform process also made Trump to taste the difficulties of domestic politics in the United States, which causes him turning more to external issues that are easier for him to deal with; one is immigration and the other is trade where he thinks he could handle easily.
4. On the trade issues, Trump first aimed at China, and the progress was very smooth because China's economic and political structures are transparent. The United States imposed tariffs on steel and aluminum. The allies of the United States initially believed that this has only targeted China, so there were still many countries that supported U.S. sanctions and some like Canada even followed suit to impose their sanctions.
5. Inspired by the effectiveness of the steel and aluminum sanctions, Trump further expanded the sanctions to Section 301 investigations and launched a sanctions program that exceeds US$ 100 billion, which will have even greater impact. China began to propose countermeasures, but still having difficulty coping with the economic structure and political factors it is facing now. The United States imposed sanctions on ZTE Corporation and this has affected China. Therefore, China promised certain conditions of the United States. If there such issues arise again in the future, it would be the bargaining of the two sides and things would not be much different from what is happening now.
6. How far can the United States pursue protectionism? Chan Kung spoke of his prediction a long time ago that the further reach of the U.S. influence in Asia-Pacific region is Hawaii, as was before World War II. The United States had experienced protectionism before in the past; reaching its peak just before World War II, now we see another peak of protectionism. The Western countries have been practically deserted by the United States in the "America First" strategy. These tactics are Trump's long-publicized ideas, but no one believed them, and none had seriously considered their impact.
7. After the sanctions against China, Trump turned to its former allies in the Western countries that depended on the U.S. market. Anbound had conducted numerous researches on the relationship between consumption-market space-economic growth-national power"; the reason for conducting such researches is that Anbound had already foreseen today's situation. Western allies did not want to face such situation, so there have been successive visits of the leaders of these countries to the United States, including the visits by Angela Merkel and Lee Hsien Loong, and most importantly by Shinzo Abe who had numerous visits without obtaining desirable results.
8. There is also the fragmentation of G8. First, it was the expel of Russia in 2014 when G8 became G7, and now the G7 summit in Canada was a complete failure. This is a landmark event; the system in the West has irrevocably reached a turning point. In the future, these alleged allies will only be allies by name. This means that there would be a fraction that upholds multilateralism and another fraction that adheres to unilateralism. This is also the reason why the "1+3" paradigm Anbound discussed in the past would eventually emerge. This prediction has now become a reality.
9. What can Western countries do? Politically, they all look down on China, but they are divided into two sides economically. One of the these sides can only rely on the United States and be obedient; the other side the countries that cannot change structurally, like Japan and Germany, but they would seek for negotiations with the United States for their own interest. This is the process of reorganization and differentiation; while it is an important incident, the results will be unpredictable.
10. Trump's policies are strongly supported in the United States. If Trump's policies do not go wrong, he would be even more likely to be re-elected. Besides, there is no outstanding Democrat politician. This gives Trump more likelihood to be re-elected.
11. The protectionism in the United States may not necessarily improve people's livelihood in the country. The middle class in the United States will still live in difficulty; those fines levied on foreign companies may not benefit the common people. However, it should be noted that, protectionism has become a stigma for the American people. What is popular in the West is the alt-right movement; whatever the politicians said will be opposed on the Internet. This was the factor that Trump was elected. Second, the prevailing period of protectionism always emphasizes strategic defense; success is achieved so long as the competitors are in the worse state. Third, this is the key measure taken by the United States before the arrival of the technological wave. Future technological waves such as 3D, smart manufacturing, robotics, aerospace industry, artificial intelligence, and biotechnology will surpass everyone's imagination; these technologies can deal with the problems faced by the aging world and change the world's production, and such technologies are controlled by the United States. Those who advocate countermeasures against the United States often fail to see this reality.
12. Will Trump let go of trade in the future? Although to some extent he might, now is not the time for him to do so, neither will he let go in the future; this is compelled by the general trend, even if the President of the United States is not Trump, he or she would make the same decision. The political mechanism in the United States is stable; its President does not have much great power. Therefore, the domestic politics is rather difficult for the President, yet he can exert stronger influence on the outside world, and foreign trade happens to be what the Americans can control.
13. The "1+3" paradigm is a process of reorganization of the world's pattern. To promote such reorganization, it is necessary to have multiple talks. In the past, the entire world was in "overproduction"; now the world market suddenly became "smaller". What is the extent of this effect? How many countries can adapt to this adjustment? Finance cannot have such great flexibility. If it fails to adjust on time, the result is a major crisis. The current situation is tantamount to forcing China and the world to change, and there are many things to change.
Final Analysis Conclusion:
The defects in globalization, urbanization and welfare are inducing changes in the world. The "America First" strategy of the United States in trade and economy has started to erode its foundation with its allies. The once allies that are established based on history, politics, and military now have lost their economic basis. The United States is no longer willing to assume the role of the world leader. There may be two outcomes: one may be toward global amalgamation, which is the more delicate version of globalization; the other is the intensification of the confrontations among the countries of the world.
