Despite what people might like think, Donald Trump is actually very smart, so don’t underestimate him, says former Australian Trade Minister, Andrew Robb.
While Australian agriculture will likely enjoy a temporary windfall from extra business in Japan, Korea and elsewhere, thanks to the US President’s dummy-spitting decision to quit the Trans Pacific Partnership (TPP) free trade deal, Mr Robb said the longer term Trump agenda was all about getting his own way.
His peculiar political style was little different to the way he had grown his multi-billion dollar business empire.
“I don’t think he’s barking mad,” Mr Robb said, responding to a question at a panel session at last week’s Beef Australia, where Trump’s trade tactics and disruptive style were a frequent discussion point during the week-long cattle show and agribusiness extravaganza.
Whether or not you support what he did to build his empire and reach this point, you have to realise he can’t be too dumb.Andrew Robb
“You don’t get to be as wealthy, or into the most powerful position in the world, without having some ability.
“Whether or not you support what he did to build his empire and reach this point, you have to realise he can’t be too dumb.”
Mr Robb, a former National Farmers Federation chief executive officer, was Trade Minister between 2013 and 2016, and now sits on the board of the S. Kidman and Company joint venture business Australian Outback Beef, owned by Hancock Prospecting and Shanghai Cred.
He is also an advisor to Beef Innovations Australia, and chairman of training and professional group, Asialink, and medical technology firm, CNSDose.
“Trump pulling out of the TPP means the US industry, which supplies about half the $1 billion market in Japan, is at a 13 or 14 per cent tariff disadvantage to us,” Mr Robb said.
“Good on him. We’ll take that.
“So far Trump has managed to shoot America in the foot because of his trade war with China and by pulling out of the TPP.”
However, he said the US President’s apparent efforts to take the trade world backwards were “all about popular politics in America”.
His strategy may work for the US, but he could do a lot of damage for the rest of us.Andrew Robb
Various market specialists at Beef 2018 agreed President Trump was largely playing to his 2016 election-vote base in the manufacturing sector and rural America, and he was sure to change direction if those sectors became obvious victims of his current “bluff and bluster” war on free trade.
“I can see Donald Trump’s style – he promises to smash everything down, then he says he won’t smash it all up if you give him a better deal,” Mr Robb said.
Removing the USA from the TPP meant, for the moment, a “high-quality agreement” in which the US would have represented more than two thirds of the total gross domestic product of the original 12 countries involved was now providing a host of fresh trade concessions to others at America’s expense.
A bigger downside, for everybody, was the US’s absence also denied the region further “massive” growth opportunities associated with having such a powerful economy in the trading pact while the trade stand-off with China had potential to incite more than just a trade war.
“Don’t underestimate him – Trump could do a lot of damage,” Mr Robb said.
“His strategy may work for the US, but he could do a lot of damage for the rest of us.”
The global audience takes Trump far more seriously than we doDon Close, Rabobank, USA
Indeed, President Trump’s political agenda already causes more consternation outside the US than among Americans, according to US-based beef market specialist, Don Close, also at Beef Australia.
“The global audience takes Trump far more seriously than we do,” said Mr Close, from Missouri, whose role as a Rabobank senior animal protein analyst has taken him to Canada, Mexico, Brazil, New Zealand and Australia in the past six months.
“At the end of the day the US will be a member of the TPP, although I can’t say if that will actually occur under Trump.
“There are too many reasons why it’s a good idea and very few why it’s a bad idea.
“The TPP makes for good trade policy, good national security policy and good neighbour policy.”
Donald Trump thinks ... the US has made bad trade negotiations in the past,Don Close, Rabobank
He said US farmers still largely supported the Trump rhetoric on trade because it centred on deals benefiting US producers and exporters.
“He thinks, given our current trade imbalance, the US has made bad trade negotiations in the past,” Mr Close said.
“His election campaign was strongly pitched at slowing imports, in particular playing to the auto workers’ vote.
“He is now testing his election support base in some areas, but Trump says in the event of any trade war agriculture will be compensated, and I think we’ll see his willingness to help as we get closer to an election.”
Mr Close cited speculation of potential price compensation for producers whose crops come under tariff pressure from China.
“It will probably be an insurance based product, or extended loans, and there’s even been discussion about reopening the commodity credit corporation to buying grain stocks to support prices.”