Trade, interventions and the economy among issues defining the United States


President Donald Trump delivering the 2018 State of the Union Address from the U.S. Capitol Building in Washington, D.C.

Talon Delaney

The government shutdown, though temporarily ended, postponed President Trump’s State of the Union address from Tuesday to Feb. 5. Trump agreed to move the address after he and House Speaker Nancy Pelosi exchanged a series of letters, in which Pelosi cited security concerns and unpaid security workers as reasons for postponement.

In the absence of Trump’s originally scheduled address, the Daily reached out to members of Iowa State’s political science faculty to get their assessment of the current state of the union.  

Government shutdown

After the recent events that led up to a 35-day partial government shutdown — the longest in U.S. history — Trump has seen his approval ratings reach 37 percent in the most recent Gallup poll, their lowest point in nearly a year.

The government shutdown, fueled by disagreement behind funding for a proposed $5.7 billion border wall, left 800,000 federal workers without a paycheck for the duration of the shutdown, and nearly a million federal contractors will not receive back-pay, even after the shutdown ended.

The shutdown could continue if no funding deal is met by Feb. 15, the date the current funding measure has opened the government until.  

U.S. economy

The Trump Administration boasts a record-low unemployment according to the U.S. Bureau of Labor Statistics, continuing the downward trend since 2010.

“This is consistent with what Trump said he would do,” said Mack Shelley, the Iowa State political science chair. “[However,] some things he promised aren’t really achievable, like bringing back all the jobs in coal. That’s something our economy isn’t going to successfully incorporate.”

Shelley commented on the increasing federal deficit, which is projected to take on an additional $985 billion in debt for the current fiscal year. He said primarily cutting taxes for the higher classes contributed to the inflated deficit.

“The Trump tax cuts were sort of a bust for decreasing the deficit,” Shelley said. “The highest recipients of the tax plan don’t necessarily contribute that money back into the economy.”

Shelley pointed out the United States saw a higher gross domestic product (GDP) under the Trump Administration, around 3.5 percent.

“The annual growth rate is relatively high,” Shelley said. “But it’s still lower than other countries. China’s GDP is slowing, but it’s still around 6 percent.”

U.S. trade relations

However, an ongoing “trade war” between China and the U.S. has hurt the Chinese economy.

“The Chinese economy is doing pretty poorly,” said Jonathan Hassid, a China policy expert at Iowa State. “It’s banking system is a mess and they’ve been taking on a lot of debt.”

Hassid noted the trade war began at an opportune time for the United States.

“A lot of people, including myself, have been predicting the fall of the China-led export economy,” Hassid said. “Tactically, it was a clever idea to go at [China] during this time, but alienating China could lead to some negative effects.”

Hassid also said that the tariffs were having mixed effects in the United States. They benefit domestic steel companies, but hurt companies who relied on cheaper imported steel for their products.

“[U.S.] Steel makers are happy with this deal,” Hassid said, “but it’s a loss for everyone who uses steel [and must produce at higher costs]. We can keep squeezing China, but they could retaliate in many ways.”

Hassid says we’re already seeing this among American soybean farmers, who relied on exporting their yields to China for profit. China is relying on Canada, Argentina and other countries for soybeans instead. However, Hassid said that the tariffs are hurting China’s economy more than the United States’.

Hassid said that even though the U.S. is winning the trade war, it would still be in our best interest to work cooperatively with China.

New interventions

China isn’t the only country the U.S. has mixed trade relations with. Venezuela is one of the United States’ leading oil suppliers, and they continue to be encumbered by U.S. sanctions. The Trump Administration and nearly every country in the western hemisphere don’t recognize Nicolas Maduro as the rightful President of Venezuela.

“Venezuela has been gradually moving towards an authoritarian regime,” said Amy Erica Smith, an associate professor of political science and Latin America expert at Iowa State. “Maduro’s re-election was widely perceived as fraudulent.”

Mexico, Uruguay and Bolivia are the only countries in the western hemisphere that don’t recognize Juan Guaido as the rightful interim President. Mexico, Uruguay and most of Europe support further diplomatic actions. Bolivia joins Russia, China and Turkey in supporting Maduro.

Guaido is the President of the Venezuela National Assembly, a position akin to Pelosi as America’s Speaker of the House. Smith said that Guaido is next in line for the presidency since most of the world views Maduro’s re-election as a sham.

“Venezuela is very close to becoming a failed state,” Smith said. “The economy has completely collapsed in the last 20 years. Around 10 percent or more of its population have become refugees and people are starving there.”

Smith said that the U.S. could not stand idly by and not condemn Maduro’s atrocities, but she doesn’t think the U.S. should play a hand in regime change.

“The U.S. is accompanied by the most pro-democracy countries in the world in condemning Maduro,” Smith said. “But it would not be acceptable for the U.S. to intervene militarily. That would really hurt the people of Venezuela.”

The U.S. has a long history of intervention in South America, which includes backing coups in countries like El Salvador, Nicaragua, Honduras, Guatemala and practically every country in the region.

“The U.S. has a history of foreign policy meddling in South America, including in Venezuela,” Smith said.

Because of this violent history, Smith doesn’t think the U.S. should back an armed opposition to Maduro.

“Nobody wants a military intervention,” Smith said. “Most people are hoping the military will pull support from Maduro. There’s already cracks forming, but the upper ranks are still on Maduro’s side.”