How should New Zealand businesses deal with the US in the highly unpredictable world order of President Donald Trump?
What should we expect for the rest of his term, and will it get any easier?
Two visiting Americans – both former advisers to White House administrations – shared two distinct perspectives last week as keynote speakers at the United States Business Summit and CFA NZ Investment Conference.
New Zealand should take heart from the recent reversal of tariffs on key exports like dairy, meat and kiwifruit, political analyst Professor Dan Schnur told the United States Business Summit – an event organised by the Auckland Business Chamber and NZ Inc.
We should now be looking for other opportunities as the US grapples with shortages and price pressures around other key commodities.
Schnur teaches at the University of California, Berkeley and the University of Southern California and has worked on four presidential campaigns, including John McCain’s in 2000.
At the CFA Investment Conference, Dr Pippa Malmgren, CEO and founder of Geopolitica Institute, made the case for thinking of the current White House administration as “the first coalition government”.
Malmgren, who worked in both the Ronald Reagan and George W Bush administrations, sees the Trump era as a coalition between Trump and the technology community.
“So the tech bros basically,” she said. “We’ll throw our votes to Trump, but there are conditions and some of those conditions include the type of technology we’re gonna bring to the governance process itself.”
Consequently, some of what we are hearing from the White House now was not from Trump, it was from Trump’s coalition partners, she said.
Both speakers saw it as important not to view the Trump administration in traditional left-wing and right-wing terms.
“What it is, is a shift from an old establishment that was both Republican and Democrat to a new anti-establishment that is neither Republican nor Democrat,” Malmgren said.
Trump likes to portray himself as stubborn, Schnur said.
“But he’s not. [He] is very, very willing, if not eager to reverse course when circumstances dictate it.
“I suspect this comes from a career in real estate where you need to be able to turn on a dime to recognise new circumstances.”
Trump reversed the food tariffs here and elsewhere for the same reason he met with the newly elected Mayor of New York Zohran Mamdani, Schnur said.
“Because Mamdami talked about affordability.”
Schnur argues that Trump’s business-minded approach to politics makes him more open to policy shifts than his predecessors.
“Trump knows he was elected president by promising to bring down Joe Biden’s inflation. Maga nation, and the rest of the country, know that it has not yet happened. So Trump is looking for opportunities.”
The National Association of Manufacturers recently went to the White House begging them for tariff reductions on steel and other key products, he said.
“I would think that for a nation that does such a robust job of exporting timber that our construction industry would benefit greatly from increased timber exports.
“To me, food is just the beginning.”
Trump is the only US president who has never held a prior political office or served in the military, Schnur said.
“Which means he is the only president our country has ever had who has not ascended to his office by being part of a team.”
He is an individualist who, throughout his business career throughout his work in the private sector, has taken great pride in acting as an individualist and iconoclast and moving against conventional wisdom.
“So when he does not rely on the conventional governmental infrastructure for international relations or domestic policy, it shouldn’t come as a surprise to us. That’s the way he has worked throughout his entire career before coming to public office.”
Trump is an outsider “or at least he fancies himself as an outsider”, Schnur said.
“Donald Trump might be from New York but he was not from Manhattan,” he said.
“He’s from Queens, an outlying working-class borough, and although his father was very wealthy, he and his father lived in Queens and like most residents of the Queens borough, he grew up resenting Manhattan.
“He prides himself as an outsider, and greatly enjoys confounding conventionalism and expectations.”
It is also important to keep in mind that Trump was “as much a symptom as a cause” of the shift in US public policy, Schnur said.
“When it comes to trade policy, it’s worth remembering, that in both the 2016 and the 2020 elections, Donald Trump was only one of two presidential candidates to oppose the TPP [Trans-Pacific Partnership].
“Hillary Clinton did, I suspect, out of necessity. Joe Biden did out of more conviction. But in either case, this was not a partisan decision.”
Rather, it signified a shift of attitude in America, Schnur said.
“Trump, at least when it comes to trade policy, is not necessarily leading the parade in our country, but either intentionally or intuitively he understood in 2015 to jump in front of that parade.”
Schnur argued there is historical precedent for this shift, with America turning inwards after every major military conflict.
“Our country reverts to a protectionist impulse. That is part of our heritage.”
Malmgren saw Trump’s pragmatic approach to foreign policy as a reason for some optimism that we may see a diplomatic breakthrough in the current US tension with China.
“Yes, we’ve had huge stress between the US and China, but they’re starting to get toward a deal,” she said.
“We have a president who is our first president who’s willing to negotiate over Taiwan, but the message is not, you have it. The message is China’s economy is not in good shape, and you need it to grow.”
China’s incentive was to figure out how to come back into the world economy and raise the standard of living of Chinese nationals, she said.
Liam Dann is business editor-at-large for the NZ Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.
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