President Trump on the attack after mixed US midterms. Asia shows its working around Trump's US economically as the region prepares for key summits. Sanction waivers make Iran oil ban toothless. Xi Jinping attracting domestic criticism. By Hamish McDonald.

The vaunting of the Hill house

Alexandria Ocasio-Cortez (centre, in white shirt) with supporters in New York celebrating her election to congress.
Alexandria Ocasio-Cortez (centre, in white shirt) with supporters in New York celebrating her election to congress.
Credit: Rick Loomis / Getty Images

Donald Trump will be encouraged to double down on his anti-immigrant and America-first policies after ambiguous midterm congressional election results, in which Democrats narrowly regained control of the house of representatives but Republicans tightened their grip on the senate, adding three seats to their former majority of one.

The president went immediately on the attack, sacking Attorney-General Jeff Sessions, whom he’d openly derided for recusing himself from oversight of former FBI director Robert Mueller’s investigation into Russian campaign interference in 2016. He appointed Sessions’ chief of staff, Matthew Whitaker, on record attacking Mueller, as acting attorney-general, giving him oversight of Mueller’s inquiry in place of Deputy Attorney-General Rod Rosenstein. On November 2, Trump also had signed a waiver for Solicitor-General Noel Francisco, the next in line at the justice department, from having to recuse himself because his former law firm represented the Trump election campaign.

Should this be a prelude to shutting down Mueller’s probe, a constitutional crisis could follow. Their House majority allows the Democrats to subpoena material such as Trump’s tax returns, block attempts to starve Mueller’s inquiry of funding, and in the ultimate case of proved connivance with the Russians or obstruction of justice, to launch the impeachment process. Some Republican senators are saying they wouldn’t go along with it either.

For the rest of the world, attention will also be on whether Trump fires the last figure of maturity, experience and moderation in his cabinet, Defense Secretary Jim Mattis, and whether he seriously tries to take down the Chinese economy by confronting Xi Jinping at their meeting in Buenos Aires later in the month.

Trump has been encouraged by a fairly weak “blue wave” for the Democrats in Tuesday’s elections. With unemployment near a 50-year low at 3.7 per cent and wages starting to lift in a booming economy, the Republican vote generally held. In Texas, his support rescued former rival Ted Cruz in a close senate race with the popular House member Beto O’Rourke. Elsewhere, tried and true tactics such as “voter suppression” or disenfranchisement of minorities and racist slurs also had some effect.

But the results reflected a better side of America, too. A record number of women were elected to the House – more than 100 of the 435 members – including the first two Muslim women, the first two First Nations women, and the youngest-ever in Alexandria Ocasio-Cortez, 29. Florida voted to repeal its voting bar on the 1.5 million with felony convictions, mostly non-whites. In Colorado, Jared Polis became the first openly gay man elected as a state governor.

The Democrats now face dilemmas looking ahead to 2020. The checks and balances they promise in the House will give Trump someone to blame for not delivering on his promises, or for economic recession. Do they stick with ageing centrist figures such as House leader Nancy Pelosi and former vice-president Joe Biden, and keep the Clintons hanging around? Or do they bet on the new, leftish generation exemplified by Ocasio-Cortez and hope their metropolitan support beats the fear and anger Trump has aroused in small-town and rural America?

Almighty yuan

Our region gets an early look at post-midterm geopolitics when leaders from around Asia meet in Singapore next week for the security-focused East Asia Summit, followed by a different mix for the Asia-Pacific Economic Cooperation summit in Port Moresby at the end of the week. Trump will not be attending, with Vice-President Mike Pence hardly a counter to Xi Jinping.

Recent events have shown that while old US friends are stepping up their military co-operation with Washington, they are working around it in the economic field.

Japan has been taking part in the largest-ever joint naval exercise with the US Pacific Fleet in recent days. But earlier, Shinzō Abe made the first visit to China by a Japanese prime minister in seven years, signing a host of investment and financial agreements. Trump’s America-first wars on trade deficits are driving these two mercantilist powers together into defence of the multilateral trade order.

Australia’s ratification has meanwhile brought the America-less version of the Trans-Pacific Partnership into operation. As it now stands, the trade and investment pact gives Australian, Canadian and other exporters better access to Japan than their US counterparts, and waters down the intellectual property rights the Americans had demanded.

Notwithstanding Scott Morrison’s proclamation that his government’s foreign policy would be less “transactional”, Trade Minister Simon Birmingham hot-footed it up to Shanghai this week for China’s big import expo, where Xi airily talked of China’s imports of goods and services totalling $US40 trillion over the next 15 years. Foreign Minister Marise Payne followed to Beijing on Thursday, ending a two-year freeze-out by the Chinese. Though her delegation attacked China’s re-education camps for Uygurs in the UN Human Rights Council on Tuesday, her direct comments on “values” were expected to be diplomatic. Victoria became the first Australian state to sign up to Xi’s pet project, the Belt and Road Initiative.

In Singapore, Pence and close allies will talk up the “free and open Indo-Pacific” concept, known as the FOIP in strategic circles. Their hawks are egging on formation of the “Quad”, or interoperability between the forces of the US, Japan, India and Australia. But India’s Narendra Modi has indicated Delhi’s wish for autonomy by buying the powerful S-400 air defence system and two new frigates from Russia.

Speaking at the Townsville army base on Thursday, Morrison put dollars and a few boots on the ground into the immediate region to counter China. He announced a new $2 billion Australian Infrastructure Financing Facility for projects in the South Pacific and Timor-Leste, plus $1 billion in export credits for Australian companies going into the region, and a roaming defence force training team.

Oil flush

Asia’s powers are also dragging their heels against Trump’s attempts to isolate Iran. When US sanctions were re-applied on Monday, following withdrawal from the nuclear limitation pact, Washington announced waivers would be given to China, India, South Korea, Japan and Taiwan, among the biggest customers for Iran’s oil.

The waivers are for six months, during which they are expected to wean themselves off Iran. China and India seem unlikely to comply. Japan and South Korea had already stopped imports, but may now use the waiver for
a temporary top-up.

Russia said it would help Iran export oil through swap deals. Iranian tankers switched off their location transponders to aid clandestine shipments. France, Germany and Britain (which are all sticking to the nuclear deal, with China and Russia) are setting up ways to get around US sanctions.

Dragon’s Deng

Xi Jinping is meeting resistance himself back home, where several senior figures have come out to criticise him implicitly for his retro-communism and abandonment of Deng Xiaoping’s dictum about keeping a low profile while building strength.

It started in July with Tsinghua University law professor Xu Zhangrun posting an essay attacking Xi’s hardline controls on debate. In September, Deng Pufang, son of the late supreme leader, said in a speech: “We must seek truth from fact, keep a sober mind and know our own place. We should neither be overbearing or belittle ourselves.”

On October 14, Peking University economist Zhang Weiying criticised those who attribute China’s economic growth to an exceptional “China model” based on a powerful one-party state, a colossal state sector and “wise” industrial policy. “The theory of the ‘China model’ sets China as a frightening anomaly from the Western perspective, and inevitably leads to confrontation between China and the West,” Zhang said. “The hostile international environment we face today is not irrelevant to the wrong interpretation of China’s achievement in the past 40 years by some economists.”

Less measured criticism was reported from anonymous Chinese state-owned enterprise executives relaxing over bottles of baijiu. “I don’t want to go back to the dark times,” said one. “I hate having to spend my weekend at Marxist essay camps,” said another. “He [Xi] has lost touch with the people,” was another comment. “China must open up.”


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This article was first published in the print edition of The Saturday Paper on November 10, 2018 as "The vaunting of the Hill house".

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Hamish McDonald is a Walkley Award-winning foreign correspondent.

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