Here’s a guess that Donald Trump will win the American election in November. The race has tightened. (At the start of August, Trump was a 10:9 favorite in the betting markets vs. Kamala Harris, who is gaining fast.) Question for Asia: If Trump wins, which Trump will govern?
Trump, the raging populist, an isolationist who will erect barriers to immigration and trade and devalue the U.S. dollar? Trump claims a weak dollar will help American exports. More likely it will start a global currency war.
But Trump off-camera is less of an ideologue than he postures. That Trump is simple to understand. He likes to win at the negotiating table. Seeking dominance, he opens with aggressive offers to test his opponent. On the campaign trail, what sounds to his fans as shouted oaths of true belief are gambits. In 2016 Trump postured as a neo-isolationist but relied on global investment bankers for economic advice. Now in 2024 he’s doing much the same thing. One day he roars against immigration. The next day Trump will say more soberly, as he did on a June podcast to tech leaders, that every noncitizen graduate of a U.S. college should get a green card “stapled to the diploma.”
Which Trump should you believe? Careful reasoning
says the latter, because Trump likes to win. And to win, you need talent.
Still, Trump’s flirtation with populism is a risk to business and investment. Populism has two main branches, right (Trump’s) and left. Both branches play to their extremist factions, which prefer to root out the moderates, often violently. The French Revolution came from the left, sparked by food shortages and an uncaring monarchy. The slogan Liberty, Equality and Fraternity was an inspiration—at first. But anything good about the French Revolution soon fell to the Reign of Terror. Beheadings became mass entertainment. When the backlash came, it was right-wing populism in the form of militarism and Napoleon. Populism is a fickle windstorm.
From the American left comes a different kind of populism. Though the American left fancies itself to be a more educated political class (i.e., “the party of science”), it too falls for populist emotion. Witness the war on cheap and safe energy sources like natural gas—needed in gigawatts for AI and data centers—in favor of romantic windmills, intermittent solar and electric vehicles that weigh far more than gas-powered cars of the same size and chew up asphalt roads faster.
Politically progressive California is the X-spot for leftwing populism. Home to Silicon Valley and world-beaters like Nvidia, Google and Meta, California’s state legislature is a strangely ungrateful bunch. It is eager to slap European style regulations on AI. (Ask yourself, how well has that worked in Europe?)
Asia, of course, should want an America of quiet strength and good to its word. That means an America of political balance with some brake on populist emotions that animate the bases of the two major parties. High-rage American populism will begin to retreat in 2028 is the guess here. President Joe Biden was elected in 2020 because he represented a cool-headed centrist impulse. Alas, Biden outsourced much of his administrative work to the Democratic left and young staffers.
The bright spot in the U.S. are the states. By and large, state governors are a more pragmatic group. Since all 50 U.S. states set their own tax policies and much of their business regulations, a healthy competition plays out. It’s good to have 50 different states asking for your business and investment, each with unique appeals.
My advice to the region’s businesses and investors: Study the U.S. states—what works and what doesn’t. Get to know the governors. The U.S. eventually will lower the boil on its angriest political divisions. But you don’t have to forego opportunities while you wait.
