Econo-nuclear impact on Trump’s America

The United States and Russia jointly own nearly 93% of the world’s nuclear warheads which are in the process of nuclear modernisation. President Trump poses as an unpredictable Head of State whose policies on nuclear weapons and energy could tip the status quo and the distribution of power in the world, not to mention affect the economy at home. With an imminent trade-war with China, insinuating threats from North-Korea and enforced breakdown of relations in the Middle East, Trump could look to consolidate his positions with allies across continents while coming to amicable terms with long time foe Russia. The President would, in all probability, give a go ahead to the nuclear modernisation program of the DoD. While taking a big dig at the economic reserves, the program could also have a positive impact of the domestic economy. Trump’s international relations on nuclear policy would also have an effect on how the economy stabilises.


Donald J. Trump, an idiosyncratic demagogue, managed to pull off an unexpected victory by challenging the conventional modern day politics and appealing to the fear and resentment of the U.S. political consumers. With Trump’s transition into the White House as the 45th American President, an ambience of uncertainty, apprehension and in some measure – hope, looms large both over the American society and the international order.

Trump’s victory now serves as the catalyst of a fundamental change, destroying the deep-seated establishment of both the Republican and Democratic parties. He now commands the loyalty and obedience of the Republicans, a party that defied and battled their own candidate up until his win, and has methodically expulsed the Democratic leadership from all three branches of government. A cloud now hangs over the geopolitical topography as to the unpredictability of his administration, much like his rise to power, and how will it affect the status quo and the distribution of power in the world.

It will be interesting to see how Donald Trump, the President will differ from Donald Trump, the candidate as he inherits a nation, deeply divided in the aftermath of one of the most schismatic and dramatic elections in history of the country. The results poses a threat that can completely under- mine the entrenched political and global order – the liberal world order championed by presidential candidates from both parties of the last few decades – the order that advocated globalization, free trade and liberal social values around the world. Trump, the candidate, had consistently built his campaign, expressing opinions that directly threatened that tradition.

In a world where tensions of nuclear domination has been heating up between the U.S. and Russia, with sizable contributions from China and North Korea, Trump’s approach to nuclear arms control is a particularly important issue. The President will serve as the unpredictable custodian of the U.S. nuclear arsenal with the sole authority to order an action, at the slightest impulse given his thin skin, mercurial nature and contradictory policy. Even without pressing the red button, Trump could permanently proliferate the nuclear geopolitical landscape.

Nuclear proliferation would involve funds being invested in the country’s nuclear policy. With Trump indicating major economic reforms, it remains to be seen exactly how the nuclear modernisation program would feature in those reforms. The upside could be creation of jobs as modernisation efforts would require building of components at home. The development of nuclear weapons leads to the development of many useful nuclear technologies that may be used for the betterment of the society and the economy. One such benefit includes nuclear power plants. Switching to nuclear energy has its benefits since it leads to a cut back on conventional forces. International relations leading to nuclear arms race has also consequential impact of the U.S. economy.

The Nuclear Race

The U.S. and Russia

As far as global nuclear stockpiles are concerned, we are overwhelmingly referring to the United States and Russia. The United States and Russia jointly own nearly 93% of the world’s nuclear warheads [1], with each state boasting of a remarkable 4,000 – 4,500 warheads in their military inventory as opposed to a few hundred weapons owned by other nuclear-armed states.

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With both countries having achieved the nuclear triad – ballistic missiles, nuclear submarines, and strategic bombers – the fate of both these countries and the rest of the world dangle in the entangled mesh of their diplomatic relations. A count up to September 2016 estimates Russia with 1796 strategic nuclear warheads – deployable via intercontinental ballistic missiles (ICBMs), submarine-launched ballistic missiles (SLBMs) and strategic bombers. President Vladimir Putin has recently passed a programme to upgrade its strategic nuclear missile strength [2] by investing millions of rubles and stocking an arsenal of mobile ballistic missiles through tunnels deep beneath the forests of Siberia. America, by September 2016, possessed 1,367 strategic nuclear warheads, similarly deployable in land-based underground silos, at onboard submarines in seas and at airbases.

Although bound by the Non-Proliferation Treaty (NPT) [3] – an international treaty with the objective of limiting the spread of nuclear weapons and technology, promoting cooperation in peaceful nuclear energy practices and achieving complete nuclear disarmament – the deteriorating relationship between both these countries has been a cause for concern [4]. The two countries have met head to head over issues related to the Syrian Civil War, the pro-EU demonstrations and civil unrest in Ukraine, the annexation of Crimea, Russian missiles in Kaliningrad, NATO missile defense systems in Romania and Poland and numerous other disputes in just the past few years [5]. With both countries set to update their nuclear arsenals, to many it appears to be another Cold War in the making. “We seem to be sleepwalking into this new nuclear arms race,” feels veteran nuclear official Bill Perry [6], indirectly nudging smaller nuclear powers to modernize and expand as well.

Although, the current stockpile is an improvement since the end of the Cold War from the mid- 1980s, the disarmament movement has significantly stagnated since 2011 – around the time the new START treaty [7] was in effect. The New Start treaty restricts the number of deployed nuclear weapons for both countries to 1,550 by 2018. While there hasn’t been any substantial increase in stockpiles, with over 3,700 deployed warheads combined, the world is at risk as these two countries can destroy each other many times over. The Cold War trend of overkill is still prevalent to this day, for no discernible reason.

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Apparently, it seems that the transition of Trump in the President’s seat might offer some hope as to the suppression of this imminent head-to-head between the two countries. The relation between President Putin and Mr. Trump seems to be cordial on the surface, mutually beneficial even. Trump has generally staked out a pacifist position in regards to Russia, more so than the American foreign policy enterprise. His win had been lauded by Putin [8], expressing his interest in the restoration of diplomatic relations between the two countries which could include arms control. Statistically, Republicans have a greater success on reduction of nuclear arms stockpile than the Democrats [9]. So, all indicators point to a positive outcome on the ongoing arms race between the two major stakeholders. But at this nascent stage, it is a positive speculation – the final outcome remains to be seen.

But there are issues of concern as well. For starters, it seems that the heads of the two states – both doused with strong nationalistic sentiments and a predisposition for nuclear proliferation – would not be so frugal when it comes to freezing of the nuclear warheads. Trump’s tweet [10] conveys the desire of the U.S. Government to strengthen and expand their nuclear capacities while indicating that the arms race is on.


The President has evidently denied the need to administer the plan for a strong nuclear command in numerous public appearances. Trump has appointed Gen. James Mattis as the Defense Secretary who has questioned the need for land based ICBMs [11] but it is unlikely that his views would be resonated by other members of his administration. Mira Ricardel’s appointment as the head of Trump’s Pentagon transition team, who previously held the position of an executive in Boeing’s Strategic Missiles and Defense division, may indicate full administrative support for the new ICBM plan [12]. Trump’s statements as well his personnel choices may be expressing mixed intentions but nuclear hawks are using the Wall Street Journal, calling on Trump to accelerate the U.S. nuclear modernization policy as private corporations constituting the U.S. “nuclear enterprise” are looking at heavy profits from the proliferation.

Russian Defense Minister Sergei Shoigu indicated that Russia is looking to replace its nuclear arms with high-precision bombs to strengthen world peace and alleviate international tensions [13]. The defense minister’s comments, although, seemed to contradict President Putin’s earlier remarks to enhance the combat capability of strategic nuclear forces [14].

By Trump’s own account, the primary global predicament lies in “radical Islamic terrorism,”[15] Iran, and China, not Russia. Infact, two decades earlier in an interview with Ron Rosenbaum in 1987 [16], Trump had expressed that America’s best interest is to join forces with the Russia to fight the emerging threats. Although there is a superficial coherence in a U.S.-Russian alliance – both nations strengthening their nuclear stockpiles in an effort to intimidate emerging powers – in practice, it would be nearly impossible to execute.

Putin doesn’t share the list of major foes with Trump. In Syria, they had worked on the same idea [17] about the need to reinforce President Bashar al-Assad’s dictatorship to put an end to the raging civil war. But when it comes to Iran, Putin supports the nuclear deal [18] while Trump has repeatedly threatened to rip it apart. Putin has worked vehemently to improve ties with China [19] in increasing trade and military co-operation since 2014 Trump maybe be staring at a trade war with China [20].

On a practical note, Russia’s efforts are clearly directed towards regaining a sphere of influence in central Europe and the Middle East. There is no reason to think that we have another Cold War at our hands – with Russia starting at a certain loss under the economic superiority of the U.S.

China, North Korea and Iran

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Rex Tillerson, Trump’s designated Secretary of State, made a statement in his Senate confirmation hearing that China would not have access to the artificial islands [21] built on the South China Sea under Trump’s administration. The Chinese response indicated going to war [22] if such a move is implemented. It is currently believed that China possess a stockpile of around 260 nuclear warheads and slowly increasing [23]. Roughly 150-190 of these warheads could be considered operational given the Chinese penchant for secrecy.

Chinese President Xi Jinping, in his speech at the United Nations, Geneva, recently called for a world without nuclear weapons [24]. Trump has continued his contentious rhetoric, publicly criticising China [25] for unfair manipulation of its currency, not pressuring volatile nation North Korea sufficiently [26], employing taxes on U.S. products and militarising the South China Sea. His questioning of the “Old China” policy – stipulating Taiwan as a part of China [27] – has also prompted criticism in China. The strained relationship between the U.S. and China would only result in a ’lose-lose’ situation for both countries. President Trump needs to figure out how to make it work.


North Korea’s has been secretive about its nuclear capabilities and it remains a source of deep concern for the international community. North Korea claims that it has conducted five successful nuclear tests. North Korean leader Kim Jong Un declared in a televised New Year speech that his military is on the brink of testing its first intercontinental ballistic missile (ICBM) – a nuclear warhead small enough to fit onto a missile, powerful enough to reach any part of the U.S [28]. Although Trump has dismissed his claims [29], North Korea poses a graver threat to Trump than the nuclear nations of China and Russia as they are more integrated into the international system and are not as erratic.

According to reports, North Korea is pushing for this year as the opportune time for development of nuclear weapons as both South Korea and the United States will have new presidents. Kim Jong Un is also posed to open dialogue with the new administrations in Seoul and Washington in order to get them to recognize North Korea as a nuclear state [30].

Coming to Iran, Rex Tillerson emphasized on building on the Iran agreement – building on a mechanism that limits Iran from developing a nuclear weapon which means no uranium enrichment should be allowed in the country [31]. It remains unclear whether Trump’s administration will continue to oversee the Iran deal and to waive U.S. sanctions as required under the agreement or attempt to renegotiate the agreement, which Trump has continually declared an interest in achieving.

Nuclear Modernisation and the U.S. Economy

Trump’s transition website displays open enthusiasm (to defeat and destroy ISIS) for the $1 trillion nuclear modernisation plan [32] passed on from Obama’s reign. The U.S. is already in the process of modernising all three legs of its nuclear triad [33] – the U.S. Navy’s Ohio-class ballistic missile submarines (SSBN), armed with Trident submarine-launched ballistic missiles (SLBM); the U.S. Air Force’s Cold-War era B-52 strategic bombers that carry the nuclear-tipped air-launched cruise missile (ALCM); and the Air Force’s silo-based intercontinental ballistic missiles (ICBM).

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Modernized Strategic Delivery Systems:

  • Present nuclear delivery systems are being continually upgraded – the Minuteman III ICBM and Trident II SLBM are undergoing complete rebuilding.
  • Navy’s 14 Trident Ohio-class ballistic missile submarines’ service lines are undergoing extension.
  • A new submarine, the SSBN(X), is undergoing development which is set to replace the Ohio-class ballistic missile submarines. The expected cost of development is $140 billion.
  • The B-2 strategic bomber and the B-52H bomber are being upgraded.
  • A new strategic bomber, the B-21 and a new nuclear-capable cruise missile, known as the Long- Range Standoff Weapon (LRSO) replacing the existing Air-Launched Cruise Missile (ALCM) are being developed by the Air Force.

Refurbished Nuclear Warheads:

  • The NNSA’s Life Extension Program (LEP) was established to look after the refurbishment of the U.S. stockpile of nuclear warheads and bombs. The JASON panel concluded in its September 2009 report [34] that the existing nuclear stockpile are good to go for a few decades and there is no need for nuclear test explosions or building new replacement warhead designs.
  • The NNSA is currently chasing a controversial and expensive plan, the “3+2” strategy, consolidating the existing number of nuclear warhead types from 10 to 5. The five LEPs are estimated to cost over $60 billion in then-year dollars.

Modernised Production Complex:

  • The FY 2017 NNSA budget proposes $575 million for the Uranium Processing Facility (UPF) at Oak Ridge, Tennessee [35] for the modernisation of nuclear weapons production. The total construction cost, according to an independent study [36] conducted by the Corps of Engineers, is $6.5 – $7.5 billion although it could be as high as $11 billion.

Command and Control Systems:

  • The Defense Department plans to spend $37.5 billion on these activities between FY 2016 and FY 2025 for maintaining command, control, communications, and early-warning systems that allow operators to communicate with nuclear forces, issue commands that control their use, and detect or rule out incoming attacks.

The U.S. Department of Defense budget request for FY 2016 estimates $1.1 billion in proposed new funding for nuclear weapons [37]. This funding would integrate 1,120 additional military and civilian personnel working on Air Force nuclear issues and accelerate investments in Navy shipyard infrastructure. The Pentagon requested an increase of approximately $200 million in FY 2017 from FY 2016 and approximately $10 billion more in the FY 2017 Future Years Defense Program (FYDP) relative to the President’s Budget in 2016 to help fund improvements and the continued health of the nuclear enterprise.


With signs suggesting that Trump will look to upend the modernisation program, inherited from Obama, building of next-generation nuclear weapons with the aid of a sizeable amount of the taxpayer’s money seems plausible. This would of course land the final blow to tottering Nuclear Non-proliferation Treaty. His comments on NATO being obsolete [38] and on the uncertainty of getting along with German chancellor Angela Merkel [39] are worrying. More worrying remains the legitimacy of questions raised during the presidential campaign about Trump’s cavalier approach to nuclear policy and his debatable knowledge of basic nuclear weapons affecting his erratic approach to nuclear proliferation.

Iran poses the biggest risk and it is crucial how Trump handles the 2015 nuclear agreement [40] which limit Iran’s nuclear activities. If he indeed plans to “dismantle” it [41], it would lead to more conflict in the Middle East – an Iran-Saudi nuclear exchange, an Iran-Israel nuclear exchange and the lapse of sanctions against Iran. The worst case scenario could see a depletion of nearly13% of the world’s oil supply consequently leading to hike in oil prices by 10% to 25% in the first year, even rising as much as 30% to 50% within three years. Consequently, gasoline prices could spike by 10% to 20% in the first year settling to 30% within three years. Such sustained increase would negatively affect the U.S. economy. U.S. gross domestic product could fall by about 0.6% in the first year – costing the economy some $90 billion – and by up to 2.5% (or $360 billion) by the third year. This is enough, at current growth rates, to send the country into recession. The unemployment rate could also rise by 0.3% points in the first year and by nearly 1% two years later, resulting in some 1.5 million more Americans becoming jobless [42].


On the contrary, Trump could also limit some global nuclear threats like North Korean and Russia. In fact, he had suggested lifting of sanctions on Russia in exchange for joint nuclear arms reductions [43]. Trump has repeatedly expressed his opinions on more countries in particular, Japan, South Korea and Saudi Arabia, updating their nuclear arsenal [44] stating his consent over an arms race in Asia – which would help the U.S. in the long run. Only nine countries around the globe possess nuclear weapons and the vast majority of the rest are pushing for global nuclear abolition. In October, the UN General Assembly voted to start negotiations on a global nuclear weapons ban treaty [45]. The U.S. voted against the negotiations – as did the UK, in spite of its repeated insistence on a multilateral disarmament process. Of the other nuclear states, Russia, France and Israel also voted against a ban treaty; China, India and Pakistan abstained and North Korea voted in favour.

On the one hand, we have a President who has spoken on policies on nuclear weapons and energy in a manner that many regard disturbing. On the other, a defence industry that is positively enthusiastic over imminent funding on nuclear weapons. And this is happening at a time of global and domestic instability, where radical reform policies may have a profound impact of the national economy. With a focus on nuclear modernisation, an expansion in the nation’s nuclear power generating capacity could see the rise of entities like the Tennessee Valley Authority [46] and socialising the relatively high costs of new nuclear power plants should make the incremental cost burden fairly manageable.

The present geopolitical situation seems ominous where nuclear dangers persist and could worsen in time, but there are reasons for genuine optimism. Nuclear energy interjects at an odd juncture of national security and economic and energy policy and it remains to be seen what Trump proposes in his first term as President of the U.S.

By Soham Dutta

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