Steve Bannon :
He is one of the key associates of US elect President Donald Trump, and among his senior strategists who were appointed when he took office, who belongs to the “economic nationalism”, and has an economic vision to remake America in the wake of the Trump’s assumption of the power.
Bannon said that his vision in a 2014 in a Vatican conference: the failure of “Modern capitalism in America specifically and the West generally, and its failure of the fulfillment to create a community and an economic and social system that we can expect it to be prosperous and serves all citizens.”
Bannon seeks to create a new society through the Trump, and the achievement of most of the economic gains, which began to restrict immigration and trade, which means that unlike the forces of globalization, pointing out that American policy has to give priority to the interests of American citizens for the first time, and be a cultural perception of seconds, and the US should be ready to do so at the expense of the interests of foreign civilizations, there is no room for globalization, and sees that the increase in growth based on trade, saves hundreds of millions of people out of sever poverty.
Most important characteristic of the US economy:
United States has a great fortunes of energy and mining resources of the petroleum, natural gas, coal, and uranium which represent the country ‘s most important products, and the economy of the US has basic foundations that made it one of the strongest economies in the world over the past decades, including:
* the position of US dollar as the currency of international reserve , affect the equation of Petro dollar, and bonds of US Treasuries with highest sovereign rating in the world.
* The relationship with China , the second largest global economy, and free trade agreements with the countries of the world, the massive employment of immigrants in the United States.
* A strong economy based on free trade and investment competition, where the US has a great wealth of resources represent the most important products of the country, and it is the first agricultural power and farming power on a global level both in terms of production or exports.
And the American farming enjoy with fertile lands and the suitable climate, and the most important sectors of agriculture : cattle breeding, cultivation of grain, corn, wheat, barley, soy, industrial plants, cotton, peanuts, tobacco and the fishing is the most active sectors in terms of both production or exports.
And the various US industry products occupies a global lead, as there are eight of them within the top ten in the world rankings, as the company of General Electric and Exxon Mobil, and others.
And it occupies the first rank of world production also in the steel, automotive and artificial fabric and yarn of cotton and Industry and Minerals and Energy, and the abundance of land that helps to provide the necessary natural resources.
Oil is found in the Gulf of Mexico, Texas and Alaska, with the supplement of needs by imports from various countries of the world of oil – producing, and also containing of the important reserves of coal, gas and oil, in addition to the production of uranium which occupies ninth rank globally the most important industrial productions in 2006 and the services sector dominates on its economy , and the United States is the largest export and import countries, however , its debt remains the highest in the world, but this debts are internal to indicate to the strength of its economy.
* unemployment rate is 4.7% , it is a rate close to the overhaul work for the employment
Trump plans to reform the US economy:
Trump believes that tax cuts will stimulate the economy and investors to invest more, it will get rid of the tax regulations, as the tax rate on businesses institutions in the United States amounts the proportion of 35%, which is the highest in the developed world.
This prompted American companies to accumulate an estimated $ 2.5 trillion abroad, and the plan is to retrieve all the money and return them to the country through the imposition of retrieval fees once paid and value of 10%, which will make the tax system on the businesses in it of the largest competitive capability .
Trump prefer to see the tax rates range from about 15%, because the tax cuts to businesses to the applicable rates in the United Kingdom, which is 20%, will add 3.3%, or about $ 600 billion to the US gross domestic product .
Trump will work to reduce taxes from federal income estimated at 9.5 trillion dollars and cut taxes on the wealthy by about $ 1.3 million in 2017, and reduce the corporate tax to 15% and simplify the tax code more, knowing that the tax plans put forward in its policies benefit first and foremost the rich and not the poor and medium.
Trump said he will depend the curve of “Laver , “ based on the idea of ” a lot of tax kills tax”, a chart used by politicians and economists to determine the appropriate tax rate, and the most effective in generating government revenues.
Laver turn a lot of tax kills tax
The Republicans believe that this theory was the secret of the economic boom of the country in the Reagan era, but what they did not to say that the Reagan administration covered the deficit incurred due to the tax cuts by debt, led to the rising of growth in the private and public sectors, but for a limited time then forced Reagan to lift taxes later, and led to the recession that forced his successor, George HW Bush to lift taxes too, amid a recession that overthrew of the chances of re-election of Bush for a second term in 1992.
Trump has a plan to set up an infrastructure, at a cost of a trillion dollars financed by cheap debt from the public and private sectors, and will create millions of jobs and lead to a flow of liquidity.
Experts argue that infrastructure spending has the effect of economic double the estimated about 1.6 times, which means that the plan will have a reductionist impact on long – term deficits, as global economies seek against recession largely because of the movement that is moving toward fiscal austerity during the post – crisis period.
While “gambling money” policies exacerbated of the gap in income, so there was no option in front of banks , which tied its hands due to the political imbalance but to provide unusual solutions. Referring to the possibility of cracking the gap in wealth within the United States by replacing the rates of emergency level with financial incentives.
The US economy is suffering today from the indebtedness of up to $ 19 trillion , or more than 100% of GDP , which is a difficult proportion, but with moving the wheel of the economy and improving personal income level across operating in new projects on the one hand and lower taxes on the other hand can overcome difficulty and achieve development .
And that focus on the infrastructure will provide the the US economy for jobs opportunities and investments and moving to the wheel of rotation of companies and open the field for jobs and attract more investments, all of which are casting in the box of real growth and economic development .
Trump stressed on fiscal policy and its importance in moving the wheel of economy forward rather than continuing to monetary policy stimulations that have brought interest rates on deposits to the proportion of zero, but the to the negative and the economic conditions remained with little improvement.
Seeks Trump to strengthen the dollar, more than what it is now says, “I like the principle of a strong dollar, knowing that the real interest of the strong dollar, much less if it was weak, and he does not hide his concern over the repercussions of the raise of interest prices on the economy,in light of the dollar’s strength, which weigh heavily on US companies .
He promised to protect health care and increasing defense spending while at the same time he says that he would rebalance to the US budget , which continues to accumulate the deficit since the era of President Bush the son , but financial experts believe in his promises to increase spending contrasts with the US budget.
And Monetary Fund refers that the expectations are to be “optimistic comes mainly from the ” revival of the budget , “which Trump announced and pledged for the heavy investment in infrastructure.”
Fund predicted in its report a growth for the world ‘s largest economy by 0.1% in 2017 and rise to 2.3%, and by 0.4% for 2018 , rising to 2.5%
and Monetary Fund is less optimistic about the rest of the world , which has kept its forecast about it unchanged (3.4% in 2017, 3.6% in 2018), despite its expectation of larger acceleration, if the economic recovery in the United States was greater than expected.
As for Mexico, which looks the most prominent target of Trump, it began to suffer a decline in growth forecasts by 0.6% in 2017 as in 2018, according to the Fund.
Trade relations with China : the rush of Trump towards protectionist policies, which he talked about throughout the period of the election campaign, made him to reconsider the trade relations with China, which called for the imposition of duties on Chinese exports by about 45%, creating concern among China of Donald Trump ‘s remarks about its exports to the US market, which Trump described it in the May 3 2016, amid a rally “that his country was usurped by China.”
And with a simple look on the China – US trade balance, we will find that it cast to favor of the Chinese dragon; where the the bulk of trade exchange between the two largest economic areas recorded 659.4 billion dollars in 2015 , China accounted for the bulk of exports of 497.8 billion dollars, while US exports have not got beyond the barrier of 161 6 billion dollars, according to the data of US trade representative ‘s office .
The US market shaped since the start of opening-up policy 1779, the most important market for Chinese exports , and has a strong influence on china’s economic growth rate, since a large part of contracting operating in china focused on the US market , and direct foreign investment originating in the US has played and continues to play an important role in the transference of advanced technology to the Chinese inside
As for the United States , China has become a strong influence in shaping many of the economic indicators for the US market, The size of China ‘s monetary liquidity to pushed the Chinese government to invest in US Treasury bonds, and is something that had an impact on the overall balance of the US economy, noting that the using of cash reserves in bonds ofUS Treasury played a role in controlling interest price and ensure the stability of the US dollar , which had a positive impact on the US economy as a whole and on the American citizen, by the availability of liquidity in the credit market.
And the availability of low – cost Chinese goods, contributed to enhancing the purchasing power, though this Chinese exports and the movement of American investment into China ‘s interior have an impact on the transfer of jobs to China, but the United States , in turn benefiting from China ‘s economic boom as long as a significant portion of these revenues invested in Treasury bonds of America.
China imports a significant part of its needs of energy from Africa and the Gulf countries, and this region is the scene of US control. The threat of the Chinese economy supply of raw materials and of energy is the most important Chinese foreign policy concerns of the recklessness of the new US administration, and ignite spots affect the length of lines of China ‘s energy supply and raw material .
But there is pressure papers owned by China against America: the Alliance of China with Russia and agree on the pricing of trade in the local currency for both countries, is to break the dominance of the dollar in international commercial transactions,
And China is also heading towards an alliance with the Russians and coordination with them in the Security Council and in many international issues as Iran ‘s nuclear program , Iraq, Libya and Syria, is an alliance in order to weaken the dominance of the United States and remove them out of areas of influence they inherited after the end of World war II, and it has cemented its dominance after the end of the cold war.
China is trying to move away from direct confrontation with the United States and the only influence from behind the scenes and through its allies, working silently to build its economic and military strength , this rising power that was historically marked by the tendency of isolation, and lack of desire to expand beyond the borders of the Kingdom of the center, but its political decision currently dictated by its interest.
China is one of the most benefit countries of the current situation, Reduced energy costs in the international market and the decline in the US and Western economic strength cast without a doubt in the interests of China, and the erosion of American military power, and confined to their areas of influence hasten the rise of China as an important actor in international relations.
But unfortunately this climb or descend in the international powers and game of sites between the superpowers , the Arab and Islamic world pay its price considered they are the weakest link in the international game, and the best proof of this is the use of Chinese veto to pass a UN ceasefire resolution in Aleppo in the Security Council.
The future of the Arab oil : Analysts believe that the scales will be turned , as will decrease the market share of the Arab oil – producing countries, which definitely affects them by two points:
first line of Keystone pipes , this line of pipes will carry 800 thousand barrels of oil per day from Alberta in Canada to Cushing Center in US Oklahoma , then to Houston and the Gulf of Mexico.
The lower part of which has been completed from Cushing to the Gulf of Mexico and has been working since short period .and many parts of it were built in the north , while the cross- border , and legally under the control of the foreign ministry , it has not built yet ,because president Obama delayed it for seven years and then use his presidential power to prevent it to satisfy the protectors of environment.
Based on the information, it will be approved on it in February 2017, during the next phase of the receipt of Trump of authority, especially that senior Republicans formally asked Trump to approve it as soon as possible, some of them believe that if the tupe succeeded, other pipes would be built in parallel to it.
This tube poses a threat to the Gulf states because the additional type of oil that ‘s coming from Canada , is similar to the type of a large part of the oil the United States imports from Saudi Arabia, Kuwait and Iraq.
In doing so , part of the increase, if not all, will be on the account of market share of these countries , and may affect the share of Venezuela Also, because the oil of the same type, but the United States is the traditional market for Venezuela, because the shipping distance from Venezuela to Houston a quarter of the distance from the Gulf to Houston.
In this context it is necessary to mention an important point, which is that any political impact is linked to the Middle East or Venezuela would be temporary compared to the supposed old of the tube, that ‘s the temporary political factors will not have a role in the decision on the tube, so in summary , the construction of this pipeline and the next will be at the expense of part of the market share of Saudi Arabia, Kuwait and Iraq.
Despite the optimism shown by the GCC economic cooperation between them and the US President – elect Donald Trump during the coming period, but the global economic institutions saw that they have to be caution as his economic policies may put pressure on the Gulf States from several angles.
Where the chief economist at the agency “Moody ‘s ” see that with the election of a new US president to adopt a different economic policy, expansive fiscal policy with the financing of the deficit and tax cuts, the prospects of rising of interest rates at a faster pace in the United States are strong, and added that the Fed will raise interest rates at a faster pace, pointing to that the long – term interest rates jumped following the outcome of the election.
He said that this would put pressure on the economies that their currencies are linked to the dollar as states the Gulf, and it will become difficult to manage this connectivity, where there will be speculators are betting on the disengagement, and thus the Gulf region may face pressures in the coming months, and said that this linkage was beneficial to the economies of the region because it gives stability of the financial system and the banks and the economy in general, as the linking of local currencies to the dollar is a good policy in the long term.
However , the high interest very quickly make it difficult to keep this link, stressing that the situation will be difficult, and that the politicians have to maintain this link.
At the same time governor of the Saudi Arabian Monetary Agency Ahmed Al Khulaifi stressed that there was no intention to lift the linkage of riyal to dollar or change the riyal against the dollar at all.
It is noteworthy that Saudi Arabia fixing the riyal against the dollar since 1986, (US $ 1 = 3.75), while Emirates fixing the dirham against the dollar since 1997 (1 dollar = 3.67 dirhams).
And statements of Khulaifi comes after discussions between the Saudis economists about the possibility of de – pegging the riyal and the dollar , which is ruled out by many, especially with the strong reserve of the Kingdom despite the crisis experienced by.
Other experts believe that Donald Trump is not concerned so much to the implications of his policies on the global economy, and that the primary and sole focus will be on the US economy, and that the coming stage will witness a higher degree of economic protectionism, which opens a wide range of strong war currencies and trade disputes , and of course it will affect the growth rates for the international economy.
Trump plan to take over Iraqi oil
, Trump’s statement to CNN: “We must reserve the Iraqi oil, and as you know it is a very important, if we took the oil, it would not be for the organization Daesh any financing, because it feeds itself from oil.”
President Donald Trump refuses to hide behind slogans and does not hide his ambitions to return to Iraq and take oil to the United States, since one – third of Iraq ‘s production of the new and future oil will be , however , in the hands of US companies, while Americans leaders who were before Trump, they justified their interference in Iraq for many reasons, but Trump focused on one thing, which is that the United States should to take Iraq ‘s oil.
And actually the American oil companies got the stronger contracts with the Iraqi government, and diplomats said in the latest report, ” ExxonMobil and Occidental will take part in in the development of nearly one – third of Iraq ‘s production of the new and the future of oil.” This is ” a great victory for the US economy,” it has been changed a lot since that US officials began their first real progress in opening the oil industry in the country.
The rise of the “Daesh”, and its speed to seize large parts of Iraq and Syria, have made it more difficult for many oil companies to work in different parts of Iraq.
At the same time, it should be recognized that Trump plans to intervene in Iraq and take oil is another variable in US policy prevailing since long time ago. In line with the motto “America First”, it has abandoned the pretense to ensure a multilateral arrival of oil for the benefit of American companies alone.
And often he puts the framework of his plan to weaken the “Daesh , ” but he explained that he felt a long time ago that the United States must take the oil. Even before the rise of “Islamic State” “I always say:” Take the oil , ” Trump admitted in his speech after his inauguration at the CIA headquarters , ” : “I have said so for economic reasons , ” stressing that he would not allow anything to stand on his way .
Shatha Khalil
Translated by: Mudhaffar al-Kusairi
Rawabet Center for Research and Strategic Studies