An Assessment of the Trump Presidency: 17 Days In

By

TIME: 6th February 2017, 18:00 – 19:00

VENUE: House of Commons

SPEAKER:
Kenneth R. Weinstein
President and CEO, Hudson Institute

CHAIR: Jonathan Djanogly MP

Johnathan Djanogly: Craig Kennedy is a Senior Fellow at the Hudson Institute and was President of the German Marshall Fund for eighteen years. He began his career in 1980 as a Program Officer at the Joyce Foundation in Chicago and grew to become President of that foundation. He left the Joyce Foundation to work for Richard J. Dennis, a Chicago investor and philanthropist and at the same time creating a consulting firm working with non-profit and public sector clients before coming to the German Marshall Fund in 1995. Craig Kennedy is a partner in Creative Engagement, an advisory firm that helps governments, corporations and non-profits reach their key audiences in innovative ways. He serves on the boards of First Solar, The US-Russia Foundation and True North Venture Partners. Craig, over to you.

Craig Kennedy: Well thank you so much. First apologies from Ken Weinstein, he very much wanted to be here because he knows what wonderful crowds the Henry Jackson Society and Alan Mendoza attract here in London. I will try to fill in for him the best that I can. Over the past six weeks we have discovered at Hudson that being a centre centre-right think thank that has some connections to the new administration has suddenly made us very popular. We have had delegations from just about every European country come through Hudson and some of them have been three or four times as they have tried to work out what this new and somewhat unusual administration is going to do. Part of the attraction of coming to Hudson is that Ken is a very close friend of the Vice President Mike Pence but we also have a number of our fellows who are going into the government including Elaine Chao who is going to be the Transportation Secretary. The only credibility I have is that my son works in the Whitehouse so I will leave it at that. I want to start by saying that Presidential administrations in the United States are like movies: when you have watched the first few minutes sometimes you see a very strong character and you think that this person is going to be the centre of the story, and then about 5 minutes later they get killed. So, lots of the people that I am going to mention who seem very powerful and influential in the first two minutes of the movie and we have no idea whether they will still be standing three and a half years from now. On the other hand, one of the great tricks of movies is sometimes there is a casual event that happens and seems to have no significance and when you get in to hour three you suddenly realise that was the key to it. I can’t tell you that I am going to point out what those keys are but I am going to try. So, let me start by making a kind of unusual statement: what you see right now in the United States is the first coalition government that we have ever had. On the one hand you have this populist driven candidate who just about every leading Republican politician opposed and who the entire establishment of the United States judged unfit to be President, but he won because he reached into a segment of the populace that no one really understood was so ready for a message of his sort. Now he has to find common cause with a Republican Party that controls both houses of Congress. So, I guess that there are going to be three questions that I am going to try and answer tonight very quickly. One is can the Trump populists find common ground with the Republicans, I will say probably yes but you will judge at the end. The second is can that coalition hold off the defeated but now re-energised centre centre-left; I don’t know if you watch American news at all but we now have at least half a dozen demonstrations every day. The final question is what does it all mean for you? The answer to that is complicated. So, what is the world of Trump? First of all think of his identities: he’s an entrepreneur he is very proud of that and a businessman; he’s a visionary but he is also an entertainer and one of the first things that he will do is talk about his ability to act and perform. Now the United States has had a pretty successful actor as President in Ronald Reagan but that is where the comparison really ends. Ronald Reagan made his life playing roles that were pretty strictly defined for him, where he memorised lines and he did so with great certitude. Donald Trump made his money as an actor doing reality TV where spontaneity and thinking off of the cuff and being provocative and upsetting your audience is actually a way that you draw attention and get viewers. Mr Trump is not a guy with a big ideology, there is a certain line of writing in the United States that would make him out to be some kind of far-right stalking horse. There are others that try to make him some sort of manipulative extremist, to be honest this is a guy who does not have some big framework as to how the world should operate. He likes ideas that appeal to the new voters that be brought in to politics and he tries to avoid ideas that alienate the core of the Republican Party. It is not much more complicate than that. He does believe in one thing and this comes from one of his tech advisers Peter Thiel: he believes that he has to be a disruptive Presidency. He believes that the United States has stagnated and lost its way because of the elites in both parties, the intellectual elites and the entertainment elites have sold us a bill of goods about a whole set of issues ranging from political correctness to globalisation to the environment. Now, you take his style: entrepreneurial, fast paced, provocative, always trying to throw the opposition off balance and endless surprises and you combine it with the Republicans. These are legislators and these are conservative people who want to build coalitions, they are very careful and cautious. They also have real interest groups, not an inchoate populace out there that supports them but real interests that have backed them and supported them. You take those two styles and put it together and you have got to see some clashes and tensions. So, how does this coalition play out in different areas, well first just think about the people in the Whitehouse. On the one hand representing that populist side you have the now famous Steve Bannon and the National Security Adviser Michael Flynn; both of them very controversial and generally despised by establishment Republicans. On the other hand you have Reince Priebus the Chief of Staff to the President who is the guy that really connects him to the money behind the Republican Party and you have Mike Pence the Vice President who is really the anchor and the guy that is going to have to carry Congress. Now here is the surprising thing when you add it all up and you compare it with the Republican Party, there is a lot of things that the two groups have in common. So what are their points of agreement? Both the Republicans and Trump are suspicious of multilateral institutions, there were no tears shed in Republican circles when Donald Trump said he wanted to tear up the Paris Climate Accord. They like his instincts on the Republican side about the Supreme Court, the new nominee Mr Gorsuch is a conservative of the highest order. They appreciate Trump’s talk about military spending and the war on terrorism. They especially like his commitment to do something about Obamacare. He is kicking off this huge process of deregulation of the financial sector and of agriculture; all this is music to the ears of the Republican Party. When you think of the country that he dislikes the most which is Iran and the country that he likes the most which is Israel, maybe second to this one, this goes over very well in Republican circles. Now where are their big issues of conflict where it is going to be hard for Trump and the Republicans to find common ground? One is his rhetoric on trade, his anti-trade deal protectionist ideology runs against, well I want to say, sixty years of Republican ideology. It is almost theology I would say and if you think of kind of the great promoters of free trade in the United States over the past twenty years it has been people like Jim Baker all who come out of that Republican side. So that is the first thing, tearing up TPP was not considered a good thing, Republicans didn’t care much when he said that he was going to cancel TTIP because no one really believed that Europe was willing to go through with it but TPP is a big deal as it the rhetoric about Mexico and China. Second, they are going to have a big disagreement about deficit spending. Mr Trump has proposed a trillion dollar infrastructure program, he has also promised to increase military spending and he also wants to cut taxes. One of the first speeches that I gave on the Trump years which was right after his election to sort of a stunned crowd in Brussels, someone held up their hand and said “does that mean that the path through making America great again goes through bankruptcy court?” I think a lot of Republicans are afraid of that, that this is a guy that deficit spending is not an evil thing for and he could well get the country in deep trouble for doing that. They really start to chafe when they hear his talk about allies and especially NATO. NATO is again part of that Republican theology that is hard to question and even though you can make very legitimate arguments and say that what Donald Trump is saying is not that different from what Barack Obama said; the force and glibness with which Trump attacks NATO really gets under people’s skin. Finally his admiration for Russia and Turkey. Fortunately none of you were in the United States over the weekend because it was all about his comments on Putin and I am sure that a little bit of it bled over here. This is an area where the old guard of the republican side and people in the Senate especially people like Senator McCain, Lindsey Graham and others really take issue with Trump. Then there are a set of areas that are just complicated where they might be able to find common ground but they are going to have to work at it. Immigration, just about every Republican is going to say that we want to have secure borders and to protect the United States’ sovereignty but they also understand how important immigration is to the United States and they also understand how important immigrants are to the future of any political party. The infrastructure plan that I already talked about, is it going to bankrupt the country if he goes through with it and how will it actually be spent. He has got a sort of complicated plan where he would bring in private investors that has made everybody a little nervous. Energy policy, the President has talked about how to increase coal production in the United States; well the fact is that most American utilities now have shifted away from coal to natural gas and even renewables. The only place that is buying a lot of American coal is Europe and especially Germany and there is not much area there to increase. The final thing and it is kind of a specialised area is when he starts railing against the Chinese every Senator in every farm state in the United States, and that is quite a few, get nervous. That is because right now, sixty percent of American agricultural exports go to Asia and China is a big part of that so no one wants a trade war. So, will the Republicans and Trumpists find common ground? They should be able to on most issues, the toughest are going to be on foreign policy. If Trump and Putin actually do seem to be able to find a modus vivendi then this will set off a real tension will the United States Senate. I would also just point out to you that every American President since Jimmy Carter has said that they want to reset the relationship with Russia or the Soviet Union and not one has succeeded. I am of the opinion that he probably won’t either but both sides the Republicans and the Trump people need the other. Trump needs action, he needs to show that he is moving on his agenda and there is only so much that he can do with executive orders; he has to work with Congress to get most of the big things done. The Republicans on the other hand want to expand their majorities in the House and Senate in the 2018 elections and what they do not want is Trump out running candidates against their establishment Republicans. Now, what about the Democrats at the centre-left of the United States? In some ways they are more split and divided then the centre centre-right is. You really have two big groupings now which are an economic left, Bernie Sanders was their champion, and you have the unions and the remnant of working class people that are still part of the Democratic Party. Then you have the cultural left, the people who are really focused on identity politics. Trump is being very clever in how he deals with both of these groups. With the first one, the economic left, he is trying to co-opt them; he has already been bringing union leaders into the Whitehouse and he has been talking about why he believes that strong unions are a good thing, another issue where Republicans get a little nervous. On the other hand, Trump through his provocations and sometimes unusual way that he frames issues is really succeeding in radicalising the cultural left in the United States. His goal is to make them seem so extreme and so violent and so capable of destruction that they will really alienate the middle of the populace. So, how long does this last, four years? I think it will go longer than that. I got my start before I had a political conversion doing Democratic politics and this is not going to change that easily, maybe eight years more likely it will take twelve years to get this straightened out. So what does it mean to all of you? Let me end with that and then we can go directly to questions and I will be almost exactly at twenty minutes. For our allies this is not going to be an easy time. There is always a lot of noise and missteps at the beginning of a new administration, we are not nearly as ordered about government as you are here. So there are these bunch of new people that get brought in and there are all of these political positions that have to be filled and there is always a lot of jockeying about who is going to get what and who isn’t. You can take all of that confusion that is part of our usual system and quadruple it now. There is going to be a tremendous amount of noise in the system that will confuse and probably anger a lot of our allies. Let me end with this: don’t give up on America quite yet. Trump and the Republicans have a lot of incentives to work together. He has a lot of incentive to find common ground with the Republicans on foreign policy issues like Russia and Europe and a few other things in order to get through his domestic agenda which is much more important for him. At the same time, Republicans are being forced to think how they are going to talk to this new group of voters that he has brought in to the party. It is a very different group of voters, some people try to compare it to the Reagan Democrats of 1980 but it is a different crowd that is not as wealthy and probably not as well trained as the Reagan voters are. Now, could all of this go truly bad? Yes, you could end up with the Republicans in the House and Senate just deciding to block him, you could see him trying to do deals with Democrats or wage war with the Republicans by going directly to his voters. When you have a President that has forty million twitter followers it gives him a way to excite his base that other politicians never had. I don’t think that those negative scenes will happen, I actually think that within the next six months or so that you will start to see a little stability and predictability. It is never going to be a typical Republican administration, this guy is not from central casting, he is not Ronald Reagan who is going to read a script and play a role. I think at the end he will have to find a way to be effective and that will be working with his colleagues on the Republican side.

Johnathan Djanogly: Thank you for that masterful skate over the first few weeks of President Trump. I think we had a lot of topics come up there from ideology to Russia, trade, spending and immigration and the politics of it all. I am sure that we have lots of questions and we have a good amount of time to ask them as well. I’ll take the gentleman first.

Question 1: I’d like little thumbnail sketches of how you think the performances of the Secretary of Treasury and Secretary of State.

Craig Kennedy: So the Secretary of Treasury I have less knowledge of, I have met him and I know a number of the people that he is bringing in and I think that he will be a typical Secretary of Treasury in the United States. That is, pretty steady and pretty carful. Secretary of State Tillerson is a very interesting guy. He has ran a big complicated company and he has had to deal with very complicated issues in some of the less appealing places in the world. To do that he has also learned the value of getting real expertise and advice so Condoleezza Rice and Robert Gates are people who have been advisers now to Exxon. A very good friend of mine, former Ambassador to Russia John Beyrle also does a lot of work for Exxon. A number of other people, Craig Kelly who was Ambassador to Chile and one of the most prominent both African experts and Latin American experts at the State Department has also been with Exxon and very close to Tillerson. My guess is that he will surprise people, he is a diplomatic guy and he is smart. Now he has got a lot of conflicts that he is going to have to be aware of and he has dealt with some very unpleasant governments. Someone said “oh, you mean like Putin?” I think if the worst of them was only like Putin then he would be lucky, some of them are really bad actors. I think that he will actually be a surprise.

Question 2: I’m a journalist. Talking about Iran, based on a joint resolution that Congress made about authorisation for using military force against nuclear facility in Iran. In your mind, do you see any wider bar against all the regime or indeed any support for the opposition working against the regime?

Craig Kennedy: Really good question. One of the backdrops that you have to keep in mind about President Trump is that throughout the campaign, one of his standard lines was “I will never let us get into another war like Iraq ever again.” That was both, I think, a firm belief that he has and also really appeals to that base constituency. If you look at the people who, in our volunteer army, tend to enlist and serve it comes very heavily from that demographic group. My guess is that what you have seen with the sanctions on individuals and countries is going to be a first step and I think he will follow up on that. This is not a guy that wants to get involved in a hot conflict, yes he talks about building up the military but it is one of the few times where he has kind of conventional ideas. He says that we need to have a strong military in order to deter our enemies rather than to threaten them or anything else. So I think what you will see is some gradual steps and it will be interesting to see as the State Department fills out its staff. The two people that are up to Deputy Secretary of State both have very strong views on Iran but I would not say that they are very of the bombs away crowd they are more on let’s just get tough on them in a hundred and one little ways through sanctions and otherwise. I think that you will also hear that from Secretary of Defence Mattis.

Question 3: My question is about Asia. So the Secretary Mattis came to Japan to discuss East Asian security. How do we think Trump will handle Asia security policy against China?

Craig Kennedy: Ok, so when he talks about China he usually starts with economics but the only head of government who would have had two meetings with him is Prime Minister Abe who think is coming this weekend to spend the weekend with President Trump and play some golf which is a good way to get to know Donald Trump. You look at the people who are being appointed as ambassadors and frankly it shows what focus the administration has on Asia. A very serious person is being sent to China, Governor Branstad, who knows President Xi well and understands it from an economic side. Governor Branstad I would say is also pretty hard line on security issues. A very serious person going to Japan Mr Haggerty who knows the country and also has very strong views. The people who are rumoured to go to Korea and India I think fit that mould, it is probably the best team of ambassadors. We are still at the point where people are just being floated and nominated. I think that what Secretary Mattis said when he was in both Korea and Japan was a serious set of promises. I think that the President has been committed that you can’t leave that part of the world to itself and that you cannot abandon allies like Japan and South Korea. Frankly he has been much more certain about that than he has been about some of the commitments to continental Europe.

Question 4: I will ask a three in one if I may. There is a lot of rumour on social media about their being an indictment against Trump, I have no idea why but in your view is that likely to happen. If so is he likely to serve the four year term if so is he likely to be a two term President.

Craig Kennedy: Social media in the United States has become something that, is not dangerous but filled with truths, half-truths and I don’t know what else you call it.

Alan Mendoza: Alternative facts.

Craig Kennedy: Alternative facts of all sorts of kinds. This is a perennial that has been pushed, actually started by some disappointed members of the Clinton campaign the day after election who could not possibly believe that this guy was going to be President. Who knows? I’m not a lawyer, I don’t know complicated his situations are. I think it would be more likely that after two years he said “gosh I’m losing a lot of money by doing this job and I’ve got a really great guy Mike Pence that I have trained and I am going to get out of here.” In all seriousness, if you talk to people in the Whitehouse they have a very clear strategy as to how they are going to get him re-elected. They understand that wall that they broke in the Mid-West is really crucial to maintain. They are also quite convinced that if the election was held today then they would do even better in all of those states. You have to remember that every voter was told endlessly that Donald Trump has no way of winning so you are wasting a vote is you go out and cast it for him. Now they know that there is really potential. When foreign leaders come in to see him one of the first things that he asks is “are your companies investing in Ohio, Pennsylvania, Michigan and Wisconsin? It would be really good if they added a few more jobs in those places.” When he is talking to Congress, he is really clear that he is going to run for re-election and that he is going to do it by proving to the American people and all the people that scoffed at this last victory that they can do it hugely.

Question 5: So if you were a betting man, you would say two terms?

Craig Kennedy: You know, let me be really honest with you. I have given probably twenty speeches over the last twelve months on American Politics and at the end of them I always give a prediction. I have not been right once so I can tell you no. In July I did a series in Europe and I kept saying that there is no way that this guy is going to win, relax, calm down and take deep breaths. I was at a corporate board meeting the night of the election and I called my son who was then working for the RNC. He said “dad, how many times today did you say that there was no way that he could win?” I said “three times” and he said “wrong three times.” Listen, no one knows what is going to happen. This is a really unusual situation and it is unusual because he is dependent on the apparatus of the party but he has not won them over. He got elected because he used the RNC to run his campaign and this was unheard of; the communications team at the RNC was really his communications team. The closest thing that they had to get out the vote was through that apparatus and that has never happened before. Today he is also dependent on them to staff up a big and cumbersome American government with lots of political spots. None the less he is still mildly at war with these people so who knows where it ends up.

Question 6: I just want to follow up on the question the other gentleman asked about Iran. Based on what you said about Trump not having any dogmatic views. Despite the rhetoric the actual facts confronting Iran and the United States at this particular stage is that: first of all Trump is not very high on humanitarian issues to want to make that a big thing, two a war against Islamic terrorism and ISIS, because Iran is not the main propagator of this kind of terrorism anymore, and it is non-state actors totally against Iran. Finally the fact that Iran has a trillion dollar economy which it wants to open up making jobs and so on. So, do you see given all these realities that you could see a different sort of behaviour by Trump six months down the line?

Craig Kennedy: One of the interesting things about Donald Trump is his ability to make a one hundred and eighty degree turn on what he said. He will never admit it but he does it and he is very nimble like on the issue of torture and name a whole range of issues. He does not have a hard ideology but he does have friends and one of his major friends right now is Prime Minister Netanyahu. I think that he will get a lot of advice on this issue from him and this is something that certainly the National Security Adviser and others around him on that populist side think, he will also think very clearly about what is in the best interest if the United States. Could you imagine a point where he would change his views on Iran? Sure, I can’t see it with the current Iranian government. That would really be a very big bridge for him to cross but I could see a more careful projection of his ideas if he thought that that was useful.

Question 7: Senator John McCain and Senator Marco Rubio among others have been particularly outspoken for many years specifically on democracy promotion and human rights internationally. Senator McCain of course has taken the President on in the last few weeks over the three issues of: Putin, torture and the executive order on immigration. How do you see their role and how influential are they? Is Senator McCain the leader of the opposition?

Craig Kennedy: Let me start at the back and we will move forward. Senator McCain is one part of the leader of the opposition. I am a huge admirer of Senator McCain and he has been very helpful to me throughout my career, my son got his start in politics really working on his Presidential campaign so I have huge respect for him and same thing for Marco Rubio. Their views are probably not at the centre of even the Republican Party anymore. They are very outspoken on this and no one is going to challenge them. If you actually went through most of the Republicans on the Senate side, twenty years ago there would have been forty members that had very strong commitments in the direction that you are talking about but today I would say that it is more like ten. You would have a few that would go along because they like working with Senator McCain and he is an incredible entertaining and pleasant guy to be around. When he has his friend Lindsey Graham with him it is a real hoot but in terms of this deep commitment it is a much smaller group then it once was. Some of this is the aftermath of both the Iraq and Afghanistan experiences again if you look at the people who fill the US Military right now it comes heavily from either minority populations or from those really deep red states. Worse than that, Iraq and Afghanistan were fought using large numbers of reservists and National Guards people. I come from South Dakota and a cousin of mine there did two tours of Iraq and it totally destroyed her family and her career. So, there is less faith and commitment to this idea of nation building and democracy promotion; I think that it is too bad in many ways but the fact is that there has been a real change. The first person to figure this out was Barack Obama who pulled off a lot of those voters in 2008 by saying that we are all tired and Donald Trump in a way did the same thing but in a much more explicit and loud way.

Johnathan Djanogly: How does that translate though in terms of his views on Putin compared to Congress?

Craig Kennedy: On Putin, no one is going to tell Senator McCain to shut up and there will always be cameras. Wait for next weekend or the weekend after when he is down at the Munich Security Conference and believe me he will have things to say about Mr Putin. If you look at the Republican leadership, you have Senator McConnell who is a very formidable legislative tactician, whose wife serves in the President’s Cabinet but who has made it very clear that there are some no go lines for him on spending and other things. There are four or five younger guys coming up like Senator Cotton and two Senators from my home state Senator Thune and Senator Rounds; Senator Rounds has become the kind of the champion on cyber security issues. That leadership group is much bigger and much more complicated and one of the things that President Trump is going to have to learn is that he can’t just call Priebus or Pence or McConnell and tell them that this is what he wants Congress to do. We will see if he actually learns a lesson which Barack Obama really didn’t which is that you have to woo Congress and use the Whitehouse as a lobbying tool.

Johnathan Djanogly: A lot of Democrats aren’t keen on Russia at the moment either.

Craig Kennedy: No but there are a whole set of games that are being played. A number of Democrats have actually called for closer relationships with Russia until Donald Trump was elected and now they have suddenly become the voice of the anti-Putin world. I watched some of the Democrats I knew from the early 1980s when I still did Democratic politics who I know have no beef with Putin or Russia at all suddenly becoming the loudest Putin haters of all around October. So, I think that you are going to see a lot of tactical games like that and when the swamp gets drained we will see who really is a strong anti-Putin person.

Question 8: A couple of points occur to me. One is Clinton’s loss, I wouldn’t have voted for Trump if I had lived in the US, but I thought her campaign was so awful and she said the wrong things to the wrong people. I have a feeling that the Democratic Party in the US might end up like the Labour Party i.e. in terminal decline in the US. The other point that occurs to me is the phone call with the Australian Prime Minister. Is there an agenda to destroy the EU and Germany in particular? Because there is a lot of hostility between Germany and Trump and this can be a fairly dangerous game. I noticed by the way that the price of gold keeps on going up which is always a sign that people are getting very nervous.

Craig Kennedy: Let me start with the first part about the Democratic Party, there is one name that I can give you, Keith Ellison if he is named the head of the Democratic National Committee then I think that your prediction is probably right. On one hand he does have some of the support of the economic left but he is identified much more so with the identity and cultural side of the left. The Democratic Party has a lot of things to work out, one of the things that I would have brought if I had known that I would be giving this talk is a map that shows the counties that Trump won in the United States. If you look at it then it looks more or less like the United States with a few pieces cut out around San Francisco, Los Angeles and New York. Even around New England once you get fifty miles in from the coast it becomes Trump country. Whereas if you look at that same map for Hilary Clinton, the United States sort of looks like the Greater Antilles, islands concentrated on two coasts and then you have a Chicago and a little Detroit but it is a very unusual and different looking map. Unless the Democratic Party figures out how to reach out to some of those states and make their case then they are going to be lost. They have a real challenge in 2018 because I think 25 of the Senators up for re-election are Democrats and ten or twelve of them are running in states that Donald Trump won. It is going to be very hard for them to rebuild any time soon if they get lost. On Germany, because in a past life I have lots of friends in Germany, when Mr Navarro tweeted at 5am that Germany was manipulating the Euro in order to compete unfairly with the United States about 5:05am my phone rang and a good friend of mine who ran one of the business associations in Germany was on and he was quite agitated. He asked the same question “is President Trump committed to destroying the European Union?” I think that the answer is that President Trump doesn’t much care about the European Union. It is not that he is for it or against it, I don’t think that he much cares about it. It is rumoured that he is going to nominate as EU Ambassador someone who famously said “I helped bring down the Soviet Union, now I am going to help bring down the European Union.” I don’t think that is official policy to be really honest. I know some of the people that are being considered for some of the key European posts for State and Defence and I would say that they are pretty conventional off the rack Republicans who think that the European Union have inflicted a lot of pain on themselves but aren’t opposed to it per say. The Germans are in a tough position right now because Barack Obama really treated them as the privileged children of Europe. He more or less said that he was going to outsource the leadership of Europe to Germany and suddenly there is a President who doesn’t find that a very appealing opportunity. He would probably rather outsource the leadership of Europe to you all, except you have decided that you are not part of Europe now, the EU.

Question 9: Could you elaborate a little bit. You have had a lot of comments about trade wars. Could you talk about how he is going to work out relationships with Mexico and China? Also if he starts putting major tariffs on them how long will it take for the American consumer to realise that the goods that they are buying today are going to cost a lot more?

Craig Kennedy: I think one of the things that we have learned if you look around the world at countries that have developed particularly protectionist or relatively modulated economies like France is that it takes a long time for people to realise that they are paying a premium. Sometimes if you stoke up enough national identity and pride in our farmworkers or steelworkers or automobile workers then you can convince people that it is ok to pay a premium. I went to a business school that believed in free markets and free trade so I find it a little hard to stomach but I have also watched enough places here in Europe where those kinds of messages get sold. In terms of China and Mexico, frankly they are both really complicated areas and he is going to have to come up with a more sophisticated approach then he has had and I think he will be forced to. Mexico if you just look at the flow that goes back and forth multiple times then, talk to someone at Ford Motors or any other number of companies; sometimes just to build a single automobile, elements will go back and forth three or four times as they are assembled and things get added on the US side and go back over the Mexican side. This is a very complicated deal. Now if he would have simply started by saying that NAFTA was done in the 1990s and it really needs to be updated, and it does, then no one would have complained. The fact that he said that he was going to tear it up and put tariffs on so they can pay for that wall was really not just provocative but maybe misguided. I’m trying to be careful. On China it is also very complicated. If you look at American investment there it is very significant although the country that is concerned about China and some kind of trade war is probably Germany more than any other place. Did you know that VW makes half of its cars in China? Holy smokes that is really something. If you look at the other major German manufacturers they have all really gone all in on China. So something that would be very disruptive for them would not be good in that world. I think if you look at the person who is going to go in at USTR and the people in the Whitehouse, these are people that know what they are doing with this stuff and I think that there will be a break on some of the wilder stuff.

Johnathan Djanogly: Ok we haven’t had a lady ask a question yet so is there a lady who has a question? No lady with a question, ok gentleman in the front.

Question 10: It has been announced in this place this afternoon by the Speaker that President Trump, when he makes his visit, will not be invited to address the Houses of Parliament. To what extent do you think that the lack of invitation may have been anticipated by the Trump administration and if it has not been anticipated then what do you think the effect of that quite pronounced non-invitation will be?

Craig Kennedy: I was afraid that someone was going to ask me this. I have not developed a good enough skill at estimating how he responds to perceived slights or what extent it was prepared ahead of time so that it was not a surprise. In the last week there have been a couple of cases where he was going to go someplace and then there were big demonstrations threatened and he decided not to do it. I think if the argument was made to him rather than come and get treated in a frosty manner, I know you’d all be very polite, but I could imagine that there might not be ecstatic clapping or cheering that we could well take it fine. I really don’t know and we are learning new things to about how he responds to certain things and certain situations. I think last week the thing that probably got me scratching my head was the call with the Australian Prime Minister. I have got a young associate who knows Turnbull quite well and said that these two are really going to hit it off and they both like golf and both are wealthy and that it is going to be great. So, I have no idea.

Question 11: If Iran and North Korea keep stepping over the nuclear red lines and persist in doing so then how do you think that President Trump will deal with that?

Craig Kennedy: I think that there is certainly an element in his administration on the Republican side and his National Security Council that will push for tough action. I do not think that we are talking war but I think that they will find lots of ways to make their unhappiness felt one way or another. I think that they have started it in both cases. My guess is that you will see secretary Mattis take a trip in the Middle East probably Iraq or someplace, partially to let others know. I think that is the best I can say. You know we are in the third minute of the movie and it is really unclear to me how that particular storyline is going.

Question 12: You have given an academic and balanced view of everything which is brilliant. Are we allowed to ask, impartiality apart, what your actual gut feeling is about him? Are you worried about him emotionally or are you quite excited?

Craig Kennedy: No, to both. I am neither worried nor am I excited. I am actually sort of an old-fashioned American, I have great faith in the institutions and in the balances of power within the system to correct lurches left and right whichever direction a President wants to take the country. There are some things that he has done which I find very appealing and there are other things that have left me wondering what on earth was he thinking but I think that the American system was built to prevent things getting out of control. At the end of the day, Donald Trump has loved to fight his opponents in court but I don’t think that he has ever had to fight the opponents that he is going to face in the next few years in court. I think that he is also going to find that a lot of the people in the Judiciary for example are going to have a more balanced view about how the world should work. I also think that Presidents learn and sometimes they go in to a state of inactivity, we saw a little bit of that with President Obama in his last year, and sometimes they become very refined and thoughtful. If you looked at President Bush two, in his second term after taking a huge amount of abuse from everyone in Europe in his first term the guy came back and was probably the best friend Europe has had in many a year. I have faith that one way or another people get turned around and changed and adjusted. I also know enough people that are either in his administration or thinking about joining it that there are too many good people going in. There are a lot of good people who have decided to voluntarily stay out and there are a lot of good people who have been excluded because they signed one of the famous never Trump letters. There are still a lot of good people going in and that gives me confidence.

Johnathan Djanogly: I think that is a great question and answer to finish this session. How an hour has flown by. I think, Craig, after your general opening remarks we have delighted in your detailed and insightful observations on a large number of specific policy areas. As you said, we are in the third minute of the film and there is a lot of swamp draining yet to be done and we look on to see how the new President gets on. Thank you very much for coming.

HJS



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