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Donald Trump and Emmanuel Macron share strong bonds, but the French president has the clear edge when it comes to economic reform

  • French President Emmanuel Macron, who makes a state visit this week to Donald Trump's Washington, likes to flatter his American counterpart with their similarities as "mavericks."
  • Their approaches bear surface similarities beyond brash use of power.
  • Both cut taxes on corporations and the wealthy. But only Macron cut them as part of a balanced program to adapt his economy to 21st century global competition.
Brendan Smialowski | AFP | Getty Images

French President Emmanuel Macron, who this week makes the first state visit to Donald Trump's Washington, likes to flatter his American counterpart with their similarities as "mavericks."

But that diplomatic tactic cannot obscure the fundamental difference in their strategies for making France and the United States great again. Macron is an economic reformer. Trump is not.

Their approaches bear surface similarities beyond brash use of power. Both cut taxes on corporations and the wealthy.

But only Macron cut them as part of a balanced program to adapt his economy to 21st century global competition.

By trimming corporate rates and a "wealth tax" on the rich, the centrist French leader aimed to make France more business-friendly. Inserting a stent into France's sclerotic labor market, he has moved to loosen hiring-and-firing regulations on companies.

Yet Macron paired those steps with initiatives to make the economy more worker-friendly as well.

His "human capital" investments include spending to reduce school class sizes, improve instruction in poor neighborhoods, add services for the learning-disabled, and bolster vocational training for the unemployed. Macron is subsidizing research in the burgeoning field of artificial intelligence that promises to revolutionize transportation, health care and defense.

To finance those changes, Macron seeks to curb France's generous state-funded pensions, especially for affluent retirees. He is hiking "green taxes" to accelerate the shift from carbon-emitting fossil fuels that cause global warming. He strongly backs the Paris climate accord pushing the world toward that same objective.

"It's basically a modernization play," said Nicolas Veron, a French economist at the Peterson Institute for International Economics in Washington. "His whole approach is to make it sustainable."

Trump, without apology, takes the opposite approach.

He brags of "massive tax cuts" rather than reform, mocking the very word as too subtle for followers to understand. He abandoned the politically difficult task of closing loopholes to offset lost revenue.

Like Macron, Trump targets regulations. Yet his budgets seek to slash portions of federal spending that invest in education, training, research and innovation to boost the future productivity of workers. He has let his modest infrastructure plan founder on Capitol Hill.

He pledges not to touch Social Security and Medicare benefits despite the long-term insolvency of both programs. He places tariffs rather than trade expansion at the center of his international economic policy, withdrawing from the Trans-Pacific Partnership and threatening to rip up NAFTA.

On energy and the environment, Trump aims to roll back the clock. In the name of reviving an increasingly uncompetitive coal industry, he withdrew from the Paris accord. His administration has explored use of a Cold War-era law permitting the government to effectively nationalize coal assets in the name of national security, even as businesses turn to renewable energy sources and cheaper, cleaner natural gas.

Trump insists his tax cuts and regulatory rollback will lift the long-term growth trajectory of the U.S. economy. But mainstream economists say that, after a jolt of deficit-financed stimulus in the short run, it won't. The Congressional Budget Office forecasts 1.9 percent growth over the next decade.

Macron's reforms leave France with higher top tax rates than the U.S. for corporations (25 percent compared with 21 percent) and individuals (45 percent versus 37 percent). But initial returns for the two leaders are more flattering to France.

Resurgent French growth led the European Union to outperform the U.S. in 2017. Government debt as a share of economic output is falling, while it rises in the U.S. The International Monetary Fund forecasts per real capita growth in France at nearly twice the U.S. rate in 2023.

Both presidents have approval ratings of around 40 percent. Each has faced fierce national protests.

Yet their circumstances reflect the difference in strategies. By his conduct as well as his policies, Trump has alienated Democrats and independents alike. As the country grows better educated and more diverse, he clings to a GOP base skewed toward older, less-educated whites.

Macron has inflamed the left and right in the name of dragging France into the future. "He totally dominates the center," economist Veron said.

His twin lodestars, Macron told Fox News on Sunday, are the next-generation digital and green-energy sectors. The world points to both as engines of modern economic prosperity.