Why Donald Trump may be America’s Gorbachev – and not in a good way

He saw Eastern Europe as a drain on the USSR’s standard of living, observing that cheap Soviet exports such as fuel meant that poor Russians were subsidising better-off Poles and Czechs. Furthermore, he noted that while the Soviet Union was spending around 12 per cent of its gross national product (GNP) on defence, compared to under 6 per cent for its satellites.

Gorbachev used three instruments to try and revitalise the USSR. He introduced perestroika to restructure the economy on market-based instruments. He decided that to achieve its objectives the government had to be more open with its population, so glasnost was launched, allowing increased government openness and transparency.

Finally, he made it clear to the eastern European communist leaders that the Soviets would no longer intervene to bolster their hold on power. Revolution quickly followed in East Germany, Hungary, Poland, Czechoslovakia, Bulgaria and Romania, all of whom sought membership of the European Union and Nato.

Collapse of Soviet empire

These moves were all designed not to undermine communism but to modernise and bolster it. Not to end the USSR, but to strengthen it. While these actions were a logical response to the state of the Soviet Union, Gorbachev had set in train a series of reforms that he could not control. The consequence was the collapse of the Soviet empire and the Soviet Union itself.

The parallels with Donald Trump are far from exact but the motivation is similar, and the result could also be similar. Both men aimed to revitalise their countries’ economy and get their partners to pay more for common defence.

Trump has voiced loud and clear his objection to the US paying for Europe’s defence and has undermined confidence in Article 5 of the Nato treaty, the commitment that an attack on one member would be considered an attack on all.

At one level, this is fair enough from an American perspective, but the US should not be surprised if its erstwhile allies seek a new alliance just as the Warsaw Pact countries did. Putin’s war on Ukraine is a vicious demonstration of how little influence Russia now has with most of its neighbours.

Notwithstanding his partial climbdown, Trump’s tariff war has undermined confidence in the US as a dependable trading partner and a secure country to invest in. The US economy has grown on the back of stable politics, the rule of law and broadly honouring its international commitments.

Investors becoming nervous about US

The US was the post-war driving force behind the World Trade Organisation, the World Bank, the International Monetary Fund and the United Nations. All institutions Trump either wants to destroy or weaken. They all need to change, particularly the WTO, but Trump offers no insight into how they might be reformed, leaving a dangerous vacuum.

The dollar’s status as the world’s reserve currency has allowed America to live beyond its means. As recent movements in the bond market indicate, the world may not for much longer treat the dollar as a safe haven, thus pushing up the cost of US borrowing, encouraging capital flight and reducing investment in its economy.

For the whole of the post-war period until now, the classic response to global economic insecurity was a rush into US bonds. This time investors are dumping US bonds, a powerful indication that the world is losing faith in them as a safe place to store money and the real reason President Trump scaled back his tariffs.

Even his opponents in the USSR did not envisage Gorbachev’s reforms bringing down the Soviet empire, far less than in the few years it took. Likewise, Trump’s domestic opponents regard his policies as reckless but not catastrophic. However, he may well have set in train the end of the US ‘empire’.

New coalition must uphold rule of law

With President Trump challenging the reliability and competence of the US, Pax Americana appears critically weakened. In 80 days, he has disrupted a system that, despite needing reform, functioned effectively for America and the global economy for 80 years.

It is essential for a coalition of countries to uphold the rule of law and international norms. The European Union, founded on the values of freedom, democracy, and the rule of law, can serve as the cornerstone of such a coalition.

The EU has been reaching out to the Trans-Pacific Partnership (CPTPP) countries. They include some of Trump’s major victims, like Canada, Mexico, and Vietnam, as well as key economies like Japan, Singapore and, of course, the United Kingdom.

Europe has been talking to India about a trade deal and has concluded one with South American countries. It’s now looking for a modus vivendi with China. It is not just the EU that is speeding up the search for new partners. Japan and South Korea are seeking a rapprochement with China – something inconceivable just six months ago.

Wholesale destruction

The Trump perspective is that a fragmented global order, where alliances and partnerships are more fluid and issue-specific, benefits the United States. The world needs an alternative approach with a coalition of the willing operating as partners committed to cooperation and the defence of a rules-based order.

The European Union has the capacity to help assemble and coordinate such a group. It should aim to create a partnership genuinely based on equality among all members.

The irony of the situation is that, unlike the USSR 40 years ago, the American economy was in fact in very good health with higher growth than the UK and the EU and relatively low unemployment. What the US required was domestic reform to help those losing out from globalisation – and not the wholesale destruction of the global economy.

David Martin is president of the European Movement in Scotland and a former Labour MEP