Is the Trump administration's attitude irrational?

Very glad to get our first "member" contribution!

Jacques has written this piece and got comments from both Michel and PL for me to publish...

Jacques is initially a veterinarian, with, thereafter, a long experience as French Senior Administration employee, before becoming entrepreneur (but not in start-ups or tech...). We always have intense and good debates and I'm happy to kick-start the "Forum" side of this blog with this piece! This is the aim of the blog, please feel free to share your ideas!

Jacques Sauret, March 1st, 2025

Since his inauguration, Donald Trump has taken a whole series of decrees that have shaken up the organization and functioning of the American Federal State, but also World trade and the global "system" as defined at the end of the Second World War. With a brutality never seen before, his actions and the associated speeches have destabilized his allies as well as his country, and raise questions about the reasons that led him to this.

The first justification given is Donald Trump's character: egotistical, narcissistic, not very hard-working and not very cultured, an inveterate liar, he reproduces what he thinks he knows how to do: "deals", based on a balance of power that is advantageous to him. Self-confident, he follows his instinct and wants to deal simply with problems, which complexity he does not understand. As with Brexit, he spoke in simple words of untenable promises that were believed by a majority of voters, especially the working classes, frustrated and angry for not benefiting (enough?) from the wealth produced. And, now that he is elected and as Putin says, "he does what he says and he says what he wants".

All this is true, but this quasi-psychotic character cannot by itself explain how the United States has reached this point. In particular, it does not explain why the business community supported Trump (while the English business community was clearly against Brexit before the 2016 referendum) and does not yet seem to be turning away from it.

A second level of explanation is ideological. The policy followed would be a revenge of the ideas of the Republican Party before Roosevelt and his New Deal. Made of isolationism and social and religious conservatism, it would reconnect with the Monroe Doctrine of the 19th century (the American continent is under the domination of the United States, and for the rest, the other powers do what they want). The Heritage Foundation's Project 2025 is part of this vision, while the decisions of the Trump administration seem to confirm its implementation. The support for the ideas and measures implemented by Trump displayed by European businessmen like Bernard Arnaud, Vincent Bolloré and Pierre-Edouard Stérin, all clearly very conservative on political, social and religious levels, demonstrates that this positioning can be that of intelligent and non-American people.

Again, this is probably true, but it cannot fully explain the attitude of the American markets and business circles: not all American businessmen, whether in tech or in traditional industry or services, are conservatives in the sense described in Project 2025.

There is therefore perhaps a third level of explanation to be added to the two previous ones: pragmatism. It is fashionable to emphasize the dynamism of the American economy, the disconnection of the European economy in relation to it, etc. However, beyond the successes of Tech and FANGs, there are many worrying signs: 1) the budget deficit is structurally very high, around 6% of GDP, and difficult to compress (nearly 80% of spending is linked to social spending -Medicaid and Medicare); 2) as a result, the debt rises inexorably (36,000 billion USD at the beginning of 2025, or 120% of the GDP, compared to 5,000 billion USD in 2001, or 45% of the GDP at the time); 3) the poverty rate (according to the OECD, this is the proportion of the population under 50% of the median income) is 18% in the United States, compared to that of Mexico (16.6%), Canada (10.1%) and France (8.5%). Inequalities are therefore very high; 4) life expectancy in the USA is decreasing, and is 5 years lower than that of the French, for both women and men; 5) the dollar's place in global reserves has been falling for 20 years, going from more than 70% in 2000 to 58% in 2024 according to the International Monetary Fund (IMF). Its use by the United States as a weapon against other countries or companies, through extraterritorial laws, encourages third countries, including the BRICS, to gradually turn away from the American dollar; 6) according to Thomas Piketti (see column in Le Monde, February 2025), in purchasing power parity (PPP), China has a GDPper capita, that is 30% higher than that of the United States, and Europe has caught up with the latter in terms of productivity; 7) One indicator of the strength of an economy is the level of its interest rates. American interest rates are higher than those in Europe. The strength of the dollar is largely due to these high interest rates.

In the end, the American economy appears to be boosted by public money and seems to be in a delicate situation, and in any case less flamboyant than what is most often said. It is a colossus with feet of clay, which cannot be satisfied with perpetuating the current system: generalized free trade, launched by Ronald Reagan and Margaret Thatcher at the turn of the 80s, benefited Western countries until the emergence of Asian countries, first Japan, then Korea and finally China. More recently, Vietnam and especially India are in a phase of strong and prolonged growth. Generalized digitalization has allowed international companies to optimize production conditions by managing them at a global level, leading them to relocate most of the world's production to Asia. This relocation cannot be stopped spontaneously without changing the rules of the game. And since this relocation impoverishes the working and lower middle classes of the so-called developed countries, they are dissatisfied and reject the "historical" governments and their projects. The Brexit vote is an illustration of this, as is the rise of the extreme right and nationalists in Europe and the American continent (Trump, Bolsonaro, Milei, Germany, France, Sweden, etc.).

At the same time, global demographic growth coupled with the enrichment of large populations, particularly in Asia, and the desire for an energy transition, is leading to significant and sustainable growth in the need for raw materials, primarily metals. China anticipated this need and has been committed since 2013 with the "New Silk Roads" to a policy of partnerships with many raw material producing countries. The United States and Europe have only recently become aware of the strategic nature of these raw materials, and of the fact that demand would exceed supply before the end of the decade.

Based on these observations, it seems rational for the United States to want to "turn the tables" and take advantage of its current economic and military power to establish new rules that are favorable to itself: bilateralism to be more comfortable in the balance of power; desire for expansion in minerals (Greenland, Ukraine); brake on imports to stop the haemorrhage of the trade deficit; drastic reduction in public spending to limit the increase in debt; and finally preserve the dollarization of international trade and if possible take advantage of it to recover revenues (recently mentioned project of taxing international trade in dollars to the benefit of the American federal state).

It doesn't help to be offended by this change of tack, because the United States has always put its real interests, primarily economic, as a priority. What has changed is above all its discourse, which until recently was filled with moral and ideological justifications (human rights, democracy, freedom against communism and authoritarianism). It is now direct and without pretense: America First! But the actions have changed little: support for military coups in the 60s to 80s (Brazil, Chile, Nicaragua, etc.), lies to justify military interventions (2nd Gulf War), non-intervention despite the transgression of red lines (e.g. Obama and Syria), multiple and almost systematic pressures on multiple countries to buy American weapons. The interests of the United States have always come before any other consideration. But the discourse was polite. It is notable that the Biden Administration did not reversed major decisions of the Trump I Administration...

It is quite surprising to see that most journalists and commentators look at the finger (outrageous words, idiotic or illegal measures, etc.) without looking at the moon. We must now be lucid, especially for Europeans, and get out of strategic and military dependence on the United States. It seems that this is finally being considered, especially by the countries of Northern Europe, and in particular Germany and Denmark. As for the United States, the question is whether the form used during these first weeks of the Trump administration, made of brutality and speed, both internal and external, will not lead to reactions blocking the process and even causing the American economy to collapse, with unpredictable consequences in political matters. In this respect, the parallel with the approach taken by Hitler when he came to power in 1933 is worrying, because even if the new American policy is pragmatic, it is nonetheless led by a man who is dangerous for democracy, his country and the world.

Just for this time (thereafter, I trust you will react directly in the forum ;), you will find PL and Michel's reactions below.

PL :

"- I thought you would emphasize more the concern that grips the US administration regarding their lag vs China concerning metals and rare earths, both mothers of all battles (See this article of the day "https://www.lemonde.fr/idees/article/2025/03/03/avec-donald-trump-un-nouveau-predateur-fait-une-entree-fracassante-sur-le-marche-des-minerais-et-des-terres-rares_6574779_3232.html")

Otherwise a few trifles:

- "due to not profiting (enough?) from the wealth produced". I think the question mark is superfluous, especially since the figures you then present on the level of poverty are eloquent.

- "There is no reason to be offended by this change of tack," Personally, I would have put "we can be offended..." which leaves room for some to think that pragmatism does not excuse egotism, narcissism and inveterate lies.

Michel :

"I fully agree with your thinking, hoping that the call for more European unity, particularly in terms of autonomous defense, will be followed.

I will add some contextual elements on the rise and the rallying of a majority of Americans to the Trumpian discourse (in the absence of ideas… 😉):

• Covid and inflation (energy crisis) have impoverished the middle and working classes over the last 4 years in the US, in an even more acute and sudden way than offshoring.

  • The answer would be in the acceleration of the American economy…

• "Regulation restricts freedom of enterprise":

  • Deregulation is therefore perceived as pro-business with all its expected positive theoretical corollaries: productivity gains, jobs, growth, purchasing power, etc.

  • Advanced democracies and their procession of laws and standards are perceived as obstacles to this "freedom".

  • The late rallying of FANGs can also be explained by the risk of dismantling (for reasons of monopoly) in the event of non-allegiance to the power in place.

• "Federal mismanagement":

  • The anti-Washington sentiment is deep and the federal state has been made a scapegoat like Brussels in our country. The feeling is that less money would be better spent locally

• "Democrats are all Wokeists and Wokeism destroys our fundamental values"

  • The omnipresence of debates around gender fluidity, colonial debt, the persecution of minorities in intellectual circles and the essentially Democratic media have pushed a significant portion of the population towards religious conservatism and the representatives of reactionary ideas.

What strikes me lately, and not only in the US, is the loss of impact of the truth, of the countervailing powers that are supposed to defend it and the spread of grossly false ideas that rally a majority. That the Russians after so many years of disinformation and propaganda think that the Ukrainians are Nazis who attacked them, that's understandable. That great democracies are tipping into such extremes is worrying. Can Europe resist?