Trump: Expectations, reality, and everything in-between

The tariff saga

Many within the financial world are questioning Trump's use of tariffs. Criticism hinges upon the argument that in reality, tariffs are a tax upon Americans, who will pay for the cost of any tariffs imposed, and the inflation tariffs will bring.

Trump has envisaged a grand plan that tariffs would replace income tax, becoming the prime source of government revenue. This is more folly than fact.

Trump sees tariffs as a tool to bargain with and is only too quick to claim the kudus of his diplomatic wins. Trumps claims four trillion Dollars are coming in FDI, as companies reinvest in local manufacturing.

There is a great risk that imposing tariffs on other nations will lead to trade wars. Trump's rationale is that tariffs will attract offshore manufacturing back to the United States and create much needed jobs in the economy. Thus, new jobs (or ones lost 45 years ago) would act as a primer to rebuild cities to their former glories.

This is at the core of 'Make America Great Again' or MAGA, the heart of Trump's support base. Tariffs are a risky gambit to play with.

Foreign policy is becoming a quagmire

Trump doesn't acknowledge (at least publicly) that the US cannot hold onto its position of dominance and global primacy the nation once held. That period is long gone. Certainly, Trump is aware that some form of formal reset is required in a Yalta 2.0 like meeting, where an understanding of respective superpowers understand and agree upon their own sphere of influence.

Trump certainly see such an opportunity as legacy building.

The US must now share primacy with China and to a lesser extent Russia. The US cannot engage China without first coming to an accommodation with Russia, which Europe is trying to prevent.

The best path ahead for the United States is an acceptance of such realities, where Trump commits the United States to this vision of a competitive and at the same time, cooperative multi-polar world.

As of now, there is little sign of Trump accepting this reality. With two months in, Trump has not yet addressed China.