The shutdown of the U.S. federal government is now the longest in that country’s history and there are no signs of an end in sight. Both sides — President Donald Trump and the entire Democratic Party, given personality by Nancy Pelosi, the new speaker of the House of Representative — appear to be digging in and are engaging in acts of political theater to rally their respective bases and win points in the public relations battle.
While the gamesmanship is amusing from a distance, the shutdown is exacting a painful toll on the lives of federal employees and contractors who are losing paychecks. Even more worrisome is the impact on the U.S. economy, which is certain to ripple across the global economy, and whether Trump will feel compelled to respond in other areas as the shutdown erodes his approval ratings and the image of his presidency.
As of Friday, the U.S. federal government has been shut down for 27 days. The key issue is Trump’s demand for $5.7 billion for a border wall with Mexico; Democrats have offered $1.3 billion for border security, countering that the president’s justifications for the wall are false and the idea itself is “immoral.” Meetings to resolve differences have broken up without progress and both sides are digging in. The president says that he is prepared for a long shutdown, while Democrats — and a growing number of Republicans — argue that discussions over security can proceed, but only after the government reopens.
This week, the two sides engaged in tit-for-tat moves that reveal the pettiness of this dispute. First, Pelosi sent the president a letter suggesting that he delay his State of the Union address, scheduled for Jan. 29, because of security concerns at the Congress (Secret Service and Department of Homeland Security officials deny that there is any reason for concern). Trump retaliated by canceling a planned trip by Pelosi and a group of Democrats to Afghanistan and Brussels, noting that “it would be better if you were in Washington negotiating with me and joining the Strong Border Security movement to end the Shutdown.”
Each side views the other’s actions as political theater. Republicans argue that Pelosi is denying the president an opportunity to make his case to the country; Democrats have suggested that Trump give the address from the Oval Office instead. They charge that his decision to deny the Democratic delegation transportation on a military plane is “petty” and “irresponsible,” and point out that the president himself visited Iraq after the shutdown began. Even Republican Sen. Lindsey Graham, an ally of the president, called the move “sophomoric,” adding that the retaliation was “inappropriate.”
The mounting cost of the shutdown is likely to focus the minds of the president and the speaker. After originally estimating that it would subtract about 0.1 percentage points (about $1 billion) from growth every two weeks, government economists now reckon that the shutdown will cost the economy that amount every week. If it lasts through January, that means a loss of half a percentage point of GDP; since the last quarter of the year tends to be slower because of weather, some observers fear that economic growth could even be negative this quarter. To put it another way, the cost of the shutdown will exceed the cost of the wall if it continues through the month.
Those economic headwinds, on top of a slowing Chinese economy, would spell real trouble for global growth. But the real concern of other governments must be the psychological toll that the shutdown, and the blame game behind it, will engender. Polls show that most U.S. voters blame the president for the impasse — perhaps they remember his boast before talks collapsed that he would take responsibility for any resulting shutdown.
Faced with a public relations black eye, Trump is likely to lash out as he searches for other “wins” to distract the public or balance the score. Japan, which is beginning trade negotiations with the U.S., must be prepared for scapegoating on the part of the administration, especially if Washington decides to declare a truce — or victory — in the trade war with China. Trump has long viewed Japan as an unfair trader and has been ready to impose tariffs on Japanese products to “fix” a trade relationship he considers imbalanced against the United States.
The president’s reversals over the past six weeks — he indicated that he would sign legislation to keep government open and then changed course after criticism from right-wing radio hosts and the hard core of his party — should remind U.S. partners of Trump’s mercurial nature. He can turn on a dime, and his motivations appear to be more personal than those of the national interest. That makes for riveting political theater, but it bodes ill for allies and partners who seek stability and predictability in U.S. policy.