Trump’s trade plans promise disruption

DONALD TRUMP’s preview of his second term, in his inaugural address of January 20, makes clear he will disrupt the global economic system.

The impact of this disruption will extend well beyond the legitimate questions now attending the Government’s energy deals with Venezuela.

Saying he will be "a peacemaker," promising a golden age and pledging, loftily, to make Martin Luther King Jr’s "dream come true," Mr Trump quickly turned to the reality of what he plans to do.

"We will drill, baby, drill," he said, digging down on his campaign promises.

Hours later, he signed a glut of executive orders., which among other things withdrew the US from the Paris Agreement, declared a national “energy emergency” and cleared the way for Alaskan energy production.

Further actions included resuming LNG exports, removing electric-vehicle incentives and halting new offshore wind projects.

"We will be a rich nation again and it is that liquid gold under our feet that will help to do it," Mr Trump said.

Although the US is the world’s largest oil producer, the plan is to lower prices, replenish strategic reserves and export more American energy globally.

This could all mean lower revenue streams for TT’s energy sector, which, as of the last budget, accounted for 26 per cent of total revenue – still a significant proportion.

At the same time, Mr Trump’s return promises greater climate damage and geopolitical uncertainty.

On the evening of his inauguration, he told Oval Office reporters, "We are looking at Venezuela very strongly. It…was a great country 20 years ago and now it’s a mess."

His pick for Secretary of State, Marco Rubio, was unanimously confirmed in the US Senate on the same day.

Mr Rubio has equated Venezuela with "a narco-trafficking organisation" and expressed strong disagreement with the Biden administration’s granting licences in exchange for democratic reform, saying the US "got played" – while also acknowledging the role of loosening sanctions as a tool for leverage. Both the Dragon and the Manakin-Cocuina deals, thus, could face difficulties.

But Mr Trump’s ambitions go even further.

His renewed pledge to "take back" the Panama Canal, now under Panamanian control, threatens to disrupt US$270 billion in annual trade.

Doubling down on his obsession with tariffs, trade wars now loom with major players like Canada, the tenth-largest economy in the world, and Mexico, the second-largest economy in Latin America. Previously, Mr Trump also suggested a desire to take Greenland by force, if need be.

The effects on the American economy and the US dollar of a massive deportation programme, efficiency-focused departmental reforms and worker-protection rollbacks will be complex and uncertain.

But it is Mr Trump’s decisive turn away from clean energy amid the ongoing climate crisis that could have the most enduring and devastating impact on the global economy in the long run.