Does Trump understand the true nature of power?

Who has more power, the person who picks up the bill in the restaurant, or the person who gets the free dinner?

Most obviously it’s the former: the demonstration that they can and will pay the bill is more valuable than the cost of the meal itself. A CEO taking out his colleagues, for instance, or a father treating his family. A different but related question: who has more power, the headteacher of a school, or the biggest kid in the playground? The latter can exert power directly on other kids in ways the teacher cannot, but the headteacher has more power to shape the overall environment.

I’ve been thinking about these different forms of power regarding the Trump administration’s moves over the last few months. In its rhetoric about making America’s allies pay their share of military spending and on using ‘reciprocal tariffs’ to eliminate trade deficits, the administration feels like a patriarch or wealthy company boss who is failing to see the bigger picture, determined not to pay any more of the restaurant bill than they have to. With its foreign policy, like the move to annex Greenland, it feels like a desire to abandon the headteacher role - that shapes the system - in exchange for that of the biggest kid in the playground who can only dominate within it.

There can, of course, be situations in which the person who seems to have power is just being taken advantage of. For the restaurant bill case, there is the somewhat implausible theory beloved of elements of the manosphere of women using dinner dates to get a free meal. A more plausible case would be a family or group of friends who exploit the bill payer’s generosity and give nothing in return. And in the case of the school, one could easily imagine an institution where formal authority structures are so ineffectual that the biggest kid in the playground really does exert more power than the headteacher.

American international power up till now has consisted of promoting a liberal free-trade system, constructing international institutions to shape it, and guaranteeing it militarily. American governments have generally believed that American power is best enhanced within this system and that the costs they pay to maintain it are worth it. The Trump admin, as we have seen over the last few months, does not - it sees the system as enabling other countries to benefit at America’s expense and that upholding it is no longer worth it, if it ever was. In this view, there is not really any ‘system’ at all, merely an anarchic world where American power means getting the best deal from other countries.

The logic of American empire

The system is not one in which the US extracts direct tribute but one within which, it is assumed, the US will thrive and implicitly dominate. The US anchors it economically: as Trump has long pointed out, it has historically (in the postwar period) been less protectionist than its allies and rivals; having had an average tariff rate in 2023 of 3.3% vs the EU’s 5%, Japan’s 3.7% and China’s 7.5%. The US dollar serves as the world’s reserve currency, keeping its value higher than it would be otherwise, allowing America to borrow more cheaply, boosting its status as the core of global demand - though also contributing to its trade deficit. The US guarantees the system militarily by spending a relatively high percentage of GDP on military spending compared to its allies (3.4%, vs 2.3% in Britain, 1.5% in Germany and 1.2% in Japan).

Many countries have thrived under this system and the US itself has more than most. It remains far richer than its allies and is in a far better relative position now than in the 1980s when Americans worried about being overtaken by Japan, and when Europe’s economy was relatively much larger. American multinationals dominate much of the world, from fast food to tech, complicating simplistic calculations about the balance of trade. For example consider the ‘Chinese exports’ due to Apple making iPhones in China, or the Irish subsidiaries of US tech companies selling their products throughout Europe.

It is true that both manufacturing as a percentage of GDP and of employment has fallen in the US over the last few decades. Yet US manufacturing as a whole continues to grow, pulling away from Germany and Japan, two countries which have kept manufacturing as a larger percentage of their economy. China of course has outpaced the US in manufacturing though, which I will come to later.

On the military side, the real point of paying to be the final military guarantor to its allies has always been to prevent them rising as challenger powers. US military spending, while higher than that of most, is still near historic lows as a percentage of GDP. Having extricated itself from the expensive and pointless wars in the middle east of the 2000s, the US’s most notable military commitment is now in Ukraine, which despite Trumpian rhetoric, is easily affordable in financial terms. The US has spent roughly $122 billion supporting Ukraine over the last three years, on an annual basis equivalent to only around 5% of its defence budget of $850 billion. This relatively small expenditure, requiring no boots on the ground, allows it to tie down a major geopolitical adversary indefinitely.

The supposed burdens of empire therefore do not seem to trouble the US very much, and American elite consensus has historically seen the country’s role as both beneficial and eminently sustainable. I should note though that it’s overly simplistic to see the growth of the liberal international system as just an American project. NATO originated as the European-only Western Union in 1948, bringing in the US and others in 1949 (to “keep the Soviet Union out, the Americans in, and the Germans down” in the words of Lord Ismay, the first Secretary General. The original version of the WTO, the International Trade Organization, fell apart because the US Congress refused to ratify it in 1950. And Eastern European leaders and populations were in general enthusiastic about joining NATO after the end of the cold war.

There have also been times when American leaders have seen the US as losing out from the system and have successfully sought to change its terms. The closest thing we’ve seen to Trump before was the Nixon shock when dollar overvaluation and fears of a run on the US’s gold reserves caused Nixon to suspend dollar convertibility to gold in 1971, leading to the end of the Bretton Woods system of fixed exchange rates. Another was the Plaza Accord in 1985 between the US, Japan, West Germany, Britain and France where it was agreed to depreciate the unprecedentedly strong dollar due to its negative effects on American industry. In general though the US has led in creating and maintaining the system, from the creation of the World Bank and the IMF, to the expansion of NATO and the creation of the WTO in 1995.

The only real threat to American hegemony is China, which while not part of the US system of military alliances, has been part of the global trading system since its WTO accession in 2001. Until now, attempts to counter China have also been done within the system, beginning with Obama’s ‘pivot to Asia’, Trump did raise tariffs on China in his first term but this was not combined with an overall attempt to drastically reorder the system. The tariffs were kept by Biden, who also introduced more targeted measures on high-technology sectors like chip-making equipment. The general strategy was to maintain the international order as it was but to try and maintain the US system of alliances and head off the rise of China specifically. As Noah Smith points out, while China outmanufactures the US on its own, the US and its allies as a whole outmanufacture China. Recent US policy has been to try and maintain its system of alliances and ‘friend-shore’ production away from China towards countries like Vietnam and Mexico.

Under this traditional way of thinking about US hegemony then, the costs are easily worth the benefits, and countering China was best achieved via maintaining and strengthening the system. With his complaints about military spending and trade deficits, Trump was missing the point about how it works. Yet the benefits of the system to the US are not immediately obvious, and Trump’s attacks resonate with many. So why does Trump differ so profoundly from elite consensus?

Trump as elite-outsider

The origin of Trump’s political success is that he is an elite-outsider with a distinctly non-elite worldview. Trump is more characteristic of what has been termed America’s gentry class, the wealthy but unfashionable owners of physical assets like car dealerships, fast food franchises and agribusinesses. By virtue of how they make their money, this class is tied to specific locations and is therefore dispersed across the country, unlike the group normally thought of as elites who cluster in a few coastal cities. Due to this, they are influential in local politics and in national lobbying but less so in the policy areas relating to international institutions.

What distinguished Trump from an average member of the gentry class is that his physical assets - commercial real estate - happened to be located in New York City where the real elite lives. He was therefore more plugged into national politics, and has a long history of opposition to the form the US’s international role takes, paying for newspaper ads in the 1980s claiming that Japan and other countries had been taking advantage of the US, and that it should make them pay more for its military protection. Likely partly due to his working life in New York City real estate, and partly due to his personality, Trump has also always been a notably zero-sum thinker. As this Slate Star Codex review from 2016 of The Art of the Deal puts it:

“The world is taken as a given. It contains deals. Some people make the deals well, and they are winners. Other people make the deals poorly, and they are losers. Trump does not need more than this. There will be no civilization of philosopher-Trumps asking where the first deal came from, or whether a deal is a deal only by virtue of its participation in some primordial deal beyond material existence. Trump’s world is so narrow it’s hard to fit your head inside it, so narrow that on contact with any wider world it seems strange and attenuated, a broken record of deals and connections and hirings expanding to fill the space available.”

Zero-sum thinking is not how the US liberal empire works, but it is the way many people think about the world. This style of thinking together with other aspects of his elite-outsider worldview was what enabled Trump to identify and exploit a large underserved market in American politics. These are people who are nationalistic, opposed to (at least illegal) immigration, and protectionist - America first in other words. Despite his wealth, Trump shares this perspective with millions of voters, and to some extent his second administration does too, reflected in the fact that only 35% of his cabinet attended elite universities, the lowest in at least 30 years (over which the percentages from elite universities have ranged from 50-62%). It is therefore an administration with a radically different view of where power and interest lies.

The logic of Trumpism

The least generous perspective on the Trump admin is that it, as a collectivity, is simply stupid. That it cannot understand the logic of the American empire and how America benefits from it. That it takes trade deficits and military spending figures to mean simply that America is being taken advantage of by other countries without seeing the bigger picture. That the only way it can understand ‘advantage’ is in crude video game-like metrics like increasing the size of your country on the map or selling more to foreigners than they sell to you.

I think there is a lot of the above which is true, but the elite consensus could also be wrong in its own way, holding to an ideology that does not or no longer maps onto realities on the ground. Under this way of thinking, US liberal empire would merely be a hollow shell that no longer means anything real and is best dispensed with. History is not short of examples of once meaningful systems that lingered on long after they had ceased to matter, take the Holy Roman Empire in the 18th century, the Ottoman Caliphate in the late 19th and early 20th century, or the British Commonwealth in the late 20th and 21st.

On Russia-Ukraine, despite the relatively low cost of US support, Vance was right to point out at the Munich Security Conference that the US should be focusing not on Ukraine but on East Asia. For American liberals, Russia and Putin serve as the indispensable ideological enemy, but in raw power terms, there is no particular reason why Russia has to play this role, considering that, unlike China, it is not a major geopolitical threat to the US. Improving relations with Russia and attempting to thereby peel it off from China in a ‘reverse Nixon’ makes sense. The US liberal elite have talked about the pivot to Asia since Obama: its involvement in Ukraine, while low in cost financially, shows it is unable to actually do this in practice. Furthermore its perpetuation of the hugely damaging war, without a way for Ukraine to actually win it, is deeply immoral.

The 19th-century style expansionism though, like the attempt to acquire Greenland, is pointless. It is alienating to European allies and comes with negligible tangible economic or military benefit. Denmark already subsidises Greenland, and any future US attempts to exploit its natural resources would run into the same problems that have already met Danish ones. If the US requires more bases to counter some hypothetical rise of China in the arctic, it already has the Pituffik base and could surely get Denmark to agree to more if needed. The same, of course, applies to rhetoric about annexing Canada, which has achieved nothing except to stimulate a nationalist reaction and to harm the Canadian right via association.

On tariffs, the idea behind the now paused ‘reciprocal tariffs’, that trade deficits mean that other countries are ripping America off, is stupid. More reasonable is the concern with the decline in manufacturing, which the executive order mandating the new tariff regime focused on heavily. It is true that China’s dominance of manufacturing leaves America potentially vulnerable in a future conflict. As J D. Vance said last year: “We are still, right now, the world’s military superpower, largely because of our industrial might from the ’80s and ’90s. But China is a more powerful country industrially than we are, which means they will have a more powerful military in 20 years.”

But it depends on what sort of manufacturing we are talking about. China and increasingly other countries like Vietnam do make most of America’s clothes and consumer electronics, but it is not products like these that would be crucial in a future military conflict. The US has not exported its production of things that would be, like aircraft or cars, and in sectors that would be crucial, like computer chips, the Biden administration was already making a successful effort to reshore. There is little benefit to bringing home Nike trainer production to the US from Vietnam for example, and even if there were, the originally intended tariffs of 46% would be unlikely to offset Vietnam’s labour cost advantage.

So who understands power better?

Throughout his whole career, Trump has proved adept at gaining power within the system he finds himself in. The US’s postwar position has been not only to act within the system but to shape it too, and it is in this way that the Trump administration’s understanding of power is deficient. In abdicating the role as the system-maintaining hegemon, it does allow the US more leeway in exercising a cruder form of power within it. But this form of power is ultimately a lesser one. The Trump approach would only make sense if, like the analogies I gave in the introduction, the system itself had broken down so much that leading it no longer provided anything positive for America. But this is not the case, and therefore the actions of the Trump admin are not only a premature abdication of responsibility, but of power too.