He promised to “pull out of trade deals such as NAFTA and the TPP”; to “challenge” key institutions such as the UN, NATO; to bring North Korea to the bargaining table; to withdraw from key international agreements such as the Paris climate agreement, the Iran deal; to challenge various political and media elites, etc – all elements of a strategy to “Make America Great Again”.

While he obviously has little idea of how to run a government, and particularly a government bureaucracy, he is certainly doing much of what he said he would do, but to what end? One of his biographers has described Trump as “The Emperor of Chaos”, claiming that he thrives on chaos. He is certainly being “successful” on this front.

It is clearly easy to “shake things up”, but it is a lot harder to actually deliver against the expectations created in that process.

A key initial thrust of the Trump campaign was its focus on those who had been “disadvantaged” and left behind by the “economic system” – especially the low-to-middle income white males who hadn’t seen an improvement in their standard of living for at least a couple of decades, and especially those in the so called “rust belt” states.

It was easy to “promise” them better times, especially by focusing on cheap Chinese and Mexican imports, illegal immigrants, and so on.  However, the decline of industrial centres such as Detroit had very little to do with cheap imports, but were much more the result of technology, robots, and the like.

What Trump is doing by risking a “trade war” against China and others will do little to help those previously disadvantaged, but will work to the detriment of most Americans, by increasing the industrial cost base, and ultimately retail prices. For example, his 25 per cent tariff on say steel and aluminium allows US producers in those industries to increase their prices of steel and aluminium to the disadvantage of all those other US industries that use these as significant inputs, ultimately being reflected in increased prices of US made goods to US consumers.

Similarly, there was the nonsense of how he would “get the Mexicans to pay for his promised wall along the US-Mexican border” by putting a tariff on imports from Mexico. Apart from the nonsense of the wall itself – he has obviously never heard of tunnels, ladders, planes and boats as means of entry – such a tariff would not be paid by the Mexicans, but by US consumers. Not surprisingly, Trump has not been able to get Congress to fund the wall to date.

The potential dangers of a trade war are well documented and understood. The ultimate risk is of a global recession – everyone loses, as trade barriers are generally reinstated, and industrial and retail prices are increased, and currencies realigned.

Moreover, the tit-for-tat with China may not be confined to tariffs, as China is the largest holder of US Government debt, so China only has to stop buying new debt, let alone dumping some existing holdings, to initiate a significant correction in the US and then global bond markets, even triggering another GFC. The US is presently issuing some $800 billion in new debt to fund Trump’s tax cuts and increased defence spending.

Undoubtedly, Trump is taking credit for the recent strength of the US economy, especially with unemployment below 4 per cent, but most forecasters see this as unsustainable, with the growth slowdown beginning next year, and especially as the US budget deficit and debt blow out markedly. Property developers always do well, for a time, with other people’s money!

Trump’s much lauded tax cuts are not having the broader economic effects he had hoped, as US companies have doubled their dividend payouts, and we see an all time record in share buy backs.

The key for Trump will be the mid-term Congressional elections on November 6, where the Democrats will probably win control of at least the Congress.  

This should see Trump held more to account for his economic, personal, and institutional failings.

John Hewson is a professor at the Crawford School of Public Policy, ANU, and a former Liberal opposition leader.