ScoMo Stuck Between Two Raging Bulls: China and the US

Donald Trump is the epitome of a modern socialite.

Glitz and glamour is what he lives for. Or at least it was prior to moving into the White House.

Since becoming President he’s toned things down a bit. But, you can bet Donny still loves to party when he can.

That’s why I was somewhat surprised to learn that Trump has only hosted one state dinner. What is essentially a formal dinner (with entertainment), held in honour of a foreign head of state.

During his three years in office, Trump has only showered this pageantry on Emmanuel Macron — the French President.

In contrast, Obama held 13 state dinners over his tenure. Six of these dinners occurred during his first term too. And nearly every president dating back to Roosevelt (1930s) has done the same.

Trump may go down as one of stingiest presidents when it comes to rolling out the red carpet. That is if he maintains his current trend.

I’m sure most people wouldn’t have expected that when he first took office.

However, this little tidbit of information makes Trump’s second state dinner all the more fascinating.

As you’re reading this, Scott Morrison will be revelling in Washington as the guest of honour. The first Australian Prime Minister to be honoured with a US state dinner in 13 years.

ScoMo won’t be the only Aussie in attendance though. A plethora of Australian CEOs and dignitaries will also be enjoying the affair.

Kerry Stokes, Anthony Pratt, Gina Rinehart, Greg Norman, and Andrew Forrest are some of the names on the guest list. Though they’ll be mixing with plenty of other big names no doubt, from both Australia and the States.

It doesn’t end there either.

Once the pomp and ceremony are out of the way, it will be down to business. All the CEOs will attend a roundtable the following night with their US counterparts.

Meanwhile, ScoMo will be off visiting NASA, the Pentagon and other state organisations. He’s getting the whole tour.

Serving up a rare dish

Frankly, all of this ceremony doesn’t really mean much to the layman. It’s not like we’ll hear any of the interesting talk that goes on behind closed doors.

However, we do know some of the topics that will be making the rounds. As ScoMo put it (emphasis ours):

Whether it’s new opportunities for our space agency, locking us into a supply chain, to collaborating with businesses and groups in the United States through to the growth in quality critical minerals and rare-earths that our miners export, our trading relationship has been diversifying.

The fact that rare earths were singled out is of particular importance. They have been a hot topic between Australia and the US for a while now. This all but confirms that we can expect more developments on the subject in the near future though.

None of this should come as a surprise if you’ve been following the story though. As Sam Volkering and I have been telling readers, a new rare earths boom is on the way. And this ‘bromance’ between ScoMo and Trump looks set to kick it off.

Back to Washington though, we also can’t ignore the broader ramifications of this event.

Beyond what will actually be discussed, this state dinner sends another stark message. Namely that the US and Australia are thick as thieves.

And to China, that will probably look a hell of lot like ScoMo is picking sides. The other side.

As the saying goes…two’s company, three’s a crowd.

Tread carefully

Now, as we all know, telling a politician how to do their job is a fruitless endeavour. If they actually listened then we might actually like them…maybe.

Right now though, ScoMo has to juggle his allegiances. Very delicately, might I add.

The US may be our primary ally, but China is our primary trading partner. Balancing our ideological loyalty to our economic prosperity is no small feat. But, right now ScoMo is leaning heavily toward the US.

As the AFR pointed out:

Given the ongoing threat posed by China, Mr Morrison said both leaders would re-emphasise the importance of a rules-based order in the region and the need for a strong American presence to maintain that order.

Tread carefully ScoMo, tread carefully.

Order is certainly what we need, and not the authoritarian kind. But, overstep the mark and we risk seeing any hope of order going up in smoke.

If that happens, then state dinners will be the least of our concerns. Instead we could wind up talking about state sovereignty.

The key detail is that ScoMo isn’t Trump. Our PM doesn’t have the audacity (or perhaps courage — depending on your disposition) to ‘tell it like it is’.

Picking a side will mean sticking with that side. No doubt upsetting the other.

ScoMo isn’t so much stuck between a rock and a hard place, as he is standing between two raging bulls.

So, enjoy the dinner Scott, I’m sure it will be extravagant. However, be aware of what it might cost. Not just for you, but all of us.

We didn’t get an invite to the party, but we might cop the hangover.


Ryan Clarkson-Ledward,
Editor, Money Weekend

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks by dissecting the latest events affecting the world.

To find out more about the publications Ryan works on and how you can subscribe, please click on the corresponding link here:

Money Morning Australia