by Greg Valliere, AGF Management Ltd.
THE IMPEACHMENT TRIAL effectively begins today, amid new drama — fresh evidence on Ukrainian intrigue, and a looming fight over witnesses that probably won’t be resolved for another week.
BY MID-FEBRUARY, Donald Trump probably will have his acquittal, with a national consensus taking hold: the trial was hardly fair, Trump acted inappropriately, but there wasn’t a strong enough case to convict him of high crimes and misdemeanors. Then what?
TRUMP WILL MIS-CHARACTERIZE THE OUTCOME as a total vindication, that goes without saying. Then he will find new controversies; political brawling is his passion, so he will seek new headline-grabbers in the next few months. There will be no shortage of fresh issues:
Tax cuts: Worried that 2% GDP growth isn’t enough to guarantee re-election, Trump will propose a new middle class tax cut, which will be rolled out by April 15. Tax cuts are like catnip in an election; all Trump has to do is propose one and he will have an issue to use against Democrats — they only like tax hikes, he will argue.
More spending: Some House conservatives are openly grumbling about the soaring budget deficit, but leaders in both parties don’t care. So we expect Trump will launch a major push for infrastructure spending later this year, and he will call for massive new defense outlays. Democrats may go along, if they can win big new domestic spending hikes in exchange.
More trade threats: Just because Trump signed a modest trade deal with China yesterday doesn’t mean the threat of protectionism has ended. He’s still a “tariff guy.” Lost amid the avalanche of news yesterday was a report in the Washington Post that Trump recently threatened European nations with a new 25% tariff on their autos if they don’t pressure Iran to halt uranium enrichment. And a fight over European exports, including wine, still looms.
Renewed fighting over the wall and immigration: You can be certain that Trump will return to his go-to issue: illegal immigration. He will raid the military construction budget for $7.2 billion in new spending on the wall, which still faces
court challenges. Trump is itching for a fight on this issue; so is his base.
Climate change — the sleeper issue: You want controversy? Trump and Greta Thunberg will be in Davos next week, just after the release of an astonishing new climate report yesterday from NOAA and the National Oceanic and Atmospheric Administration. It documented the dramatic rise in man-made carbon emissions and the sharp increase in global temperatures. Trump mocks the concept of climate change — even though millions may vote largely on this issue alone in November.
Personnel changes: What better way to liven up the dog days of summer than manufacturing a fight over key personnel? Mike Pence and Mike Pompeo will stay, but we’re not sure about Chief of Staff Mick Mulvaney, Commerce Secretary Wilbur Ross and Defense Secretary Mark Esper; the latter angered Trump last week by bungling the party line over Iran.
Global crises: Trump specializes in global brinkmanship, so we suspect the rhetoric over North Korea will heat up soon. Kim Jong-un is desperate to end sanctions, as are the Iranians, and both will stir the pot, seeking to provoke the U.S. Kim has to be careful: the U.S. knew where Gen. Qassem Soleimani was virtually all the time, and the U.S. knows where Kim lives.
The election: Trump campaign rallies will increase ahead of the impeachment acquittal, and his advisers are thrilled to see the nasty infighting — largely over gender — on the Democrats’ left. But there’s a new dynamic: Mike Bloomberg’s willingness to spend well over $1 billion dollars; he already has a campaign staff that employs 1,000 people.
Trump will spend much of the spring mocking Bloomberg because he’s short, but one senses that height will not be a sufficient rationale for re-election. If Trump gets Bloomberg instead of Joe Biden, he won’t have much time for an impeachment victory lap this spring; money, after all, is no object for Bloomberg.
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