Tuesday, 14 August 2018

"One Trade War at a Time, Mr Trump." Is the US President ignoring Abraham Lincoln's Wisdom?

[An edited version of this article appeared in The Daily Telegraph on 14th August, 2018: "Trump risks creating an unholy 'axis of the sanctioned' between Turkey, Iran, China and Russia": https://www.telegraph.co.uk/politics/2018/08/13/trump-risks-creating-unholy-axis-sanctioned-turkey-iran-china/]

Axis of the Sanctioned

“Trade wars are easy to win, “ President Trump reassured Americans when he launched stiff tariffs on Chinese exports. Then in rapid fire he re-imposed sweeping sanctions on Iran, ramped them up on Russia and sent Turkey’s currency into a tailspin with tariffs on steel and aluminium exports.
So far first blood to the United States. Even China has found that its huge trade surplus makes it more vulnerable to American measures than  the US economy is to any counter-measures from Beijing. The sharp falls in the rouble, Iran’s riall as well as the Turkish lira are all testimony to America’s status as the world’s financial heavyweight.
Yet maybe things have gone too easily. For all the economic costs inflicted on Trump’s targets, the primary reasons for his measures have been political not economic. Just as the US President had seemed to bring North Korea to heel with a potent mixture of threatening “fire and fury” plus tightening the economic noose, so Iran’s mullahs and the Kremlin were supposed to concede to Washington on the policy front as their currencies and economies were tipped into recession. Turkey too was under pressure to release a US citizen held for alleged collusion with the 2016 coup there as well as the Kurdish PKK guerrillas.    
But isn’t the point of economic sanctions to isolate a state? Creating a swathe of sanctioned pariahs from the Bosphorus to Beijing could backfire. Donald Trump’s scatter-gun approach to sanctioning rogue rivals risks creating an axis of the sanctioned.
Taken individually, Iran, Turkey, Russia and even China are vulnerable to American economic pressure, not least because everyone else’s banks can’t afford to flout the role of the almighty dollar in international trade. But if these countries are pushed together, then their mutual support and capacity to cause geopolitical turmoil could make Washington’s measures counterproductive.
Maybe a coalescing of Iran and Turkey under dire financial pressure for mutual support could be dismissed as no more viable than two drunks leaning on each other under the illusion that they’ve found a lamppost for support, but with Russia and China they suddenly have a new geopolitical hinterland.
Turkey’s President Erdogan more than hinted at geopolitical reorientation when he reacted to US tariffs by saying his country could find new friends and got on the phone to Putin. Even before the sanctions spat, Erdogan had been reviling Washington for not extraditing his foe, Gulen, for alleged coup plotting in 2016. Turkey had been cosying up to the Kremlin ordering the Russian S-400 anti-aircraft missile system in a clear departure from NATO’s integrated air defence. 
Turkey is the linchpin because until now it has been inside the US-led NATO tent. Its position at the junction of Europe and Asia, bordering Russia, Iran, Iraq and Syria was one reason why Washington always wanted Turkey in NATO. It is also why Russia sees huge gains despite the economic costs to Trump’s double-sanctioning of both Moscow and Ankara.
Both Turkey and Iran face domestic turmoil as their urban populations see the value of their savings evaporate with sudden plunges versus the dollar, but their governments have shown that they can face down protests. Iran saw off the Green Revolution in 2009 and Erdogan squashed protests in Istanbul in 2013.
With Russian and Chinese backing as well as ideologically reliable security forces both Iran’s Rouhani and Erdogan probably judge that a mixture of the riot police and anti-American rhetoric will see them through. 
Unless one of Donald Trump’s targets blinks quite soon, the pain threshold might be passed through without either regime-change or a regime reversing course.
Already Imran Khan’s Pakistan which is so dependent on Chinese inward investment has announced its support for Turkey vis-à-vis America – and it has received an offer of Russian military assistance to replace blocked US training and supplies. That could put another geopolitical piece onto the board linking Turkey and Iran to China.
It could well be that Donald Trump’s simultaneous confrontation of the axis of the sanctioned is bringing clarity to international relations. The US President is making everyone choose where they stand.
But he is forgetting the wisdom of his great predecessor, Abraham Lincoln. During the Civil War, his secretary of state, Charles Seward, suggested the Union should invade Canada to punish Britain for its sympathy for the South. “One war at a time, Mr Secretary” Lincoln admonished him and concentrated on beating the main enemy.
Donald Trump would be wiser to target his principal opponent and stick to one trade war at a time. Afterwards he could find the others more amenable when they have fewer friends.