Source : THE AGE NEWS
By The Economist
Donald Trump wants to use his second term to revolutionise America and its relationship with the world. He is engaged in an astonishingly wide range of international crises and negotiations, in Europe, Asia and the Middle East.
It is perhaps the most intense bout of White House diplomacy for a generation. So it offers clues as to whether Trump is as skilled a dealmaker as he says. The answer so far is that he is good at catalysing negotiations, but bad at closing them.
US President Donald Trump speaks to reporters as he leaves the White House en route to attend a rally in Michigan to mark the 100th day of his second term in office, on Tuesday, April 29.Credit: AP Photo/Manuel Balce Ceneta
You cannot deny his ambition and energy. On May 6, he cut a deal with the Houthis. On May 10, he claimed credit for a ceasefire between India and Pakistan. A day later, his envoy met Iranian officials to discuss a possible nuclear deal. On May 12, America and China declared a trade truce.
Trump is now in the Gulf, where he said he would lift sanctions on Syria and has met its leader, Ahmed al-Sharaa, re-establishing relations after 25 years. Gaza is on the agenda. He has pushed Russia and Ukraine to meet for talks in Istanbul on May 15.
From the Bosphorus to the Brahmaputra, Trump’s impulse is to shake up what he sees as ossified orthodoxies. He has deployed force, bombing 1000 Houthi targets. More often he makes threats, hinting he may strike Iran, sell out Ukraine and further weaken NATO. Sometimes he neglects conflicts America used to mediate, allowing them to escalate. He may let Israel smash up Gaza again and left India and Pakistan to duke it out until Pakistan hinted at using nuclear weapons on May 10. His 145 per cent tariffs on China caused a trade shock, a Wall Street slump and a mini-run on the dollar.
Wild escalation is then followed by reconciliation. Trump pivots to sup with enemies, bring adversaries together and somehow find common interests, often via business deals and a shared desire for investment.
On April 30, he struck a minerals agreement with Ukraine. His Gulf tour is being oiled by huge promised transactions on warplanes, artificial intelligence and more. “Let’s not trade nuclear missiles, let’s trade,” he told India and Pakistan.
The president’s pragmatism can deliver results. Helping Syria’s government avoid an economic collapse is the right call, as we have long argued. The Middle East hungers for growth, a fact he harnessed to secure the Abraham Accords between Israel and various Arab states in his first term.
NATO’s shocked members are raising defence spending. Stockmarket investors are now buying into his escalate-then-mediate logic. Remarkably, the S&P 500 index has more than recouped its losses since his “Liberation Day” tariff bomb exploded on April 2.
The problem is that after stoking crises, Trump is seldom skilful enough to solve them. The deals he has notched up are narrow. His truce with China covers tariffs on goods, but the trade war encompasses a far larger range of issues. A trade deal with Britain on May 8 was similarly thin. Details of the Houthi truce are murky, but it may cover only American ships, which account for a tiny share of container traffic heading through Houthi-menaced waters to the Suez Canal.
The Iran talks reportedly address nuclear enrichment but not missile technology or Iran’s support for militias abroad. So they appear no more expansive than the Obama-era deal that Trump scrapped in 2018. Any lasting peace in Ukraine would require muscular deterrence of Russia for years to come; Trump ignores this obvious truth.
His deals may also prove transient because fundamental disagreements are unresolved. He is often willing to broker talks, rarely to act as a guarantor or enforcer. The Gaza truce reached in January, in part thanks to Trump’s envoy, Steve Witkoff, lasted only 58 days. The Houthis carried on launching missile attacks on Israel. The China truce is for 90 days. The US-Ukraine proposal to Russia is for a 30-day ceasefire. Trump’s clumsy negotiating is storing up trouble ahead. By bowing too easily to Pakistan’s demands after its nuclear sabre-rattling and ignoring its tolerance of terrorism, America has created an incentive for India’s military to strike harder, faster next time. After backing down on his trade war, Trump mumbled about an opportunity for “unification” with China, a remark the administration retracted but which spooked Taiwan.
Trump’s limits as a dealmaker have long-term consequences. One is to embed a risk premium into economic decision-making, discouraging investment. Stockmarkets have bounced back, but the dollar has not, as investors worry about America’s reliability. The shipping market expects a temporary reprieve on China-US trade and more disruption of the Suez Canal, not a return to normal.
Those same doubts affect diplomacy. The world leaders who flatter Trump in public are quietly making plans to be let down by him. His tactic of “escalate, then negotiate” will have diminishing returns as other countries conclude America is bluffing. Some of his dealmaking will succeed, but at the expense of fomenting broad and long-lasting instability. America and the world deserve a better deal than that.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
