{"id":334,"date":"2016-11-10T09:04:54","date_gmt":"2016-11-10T09:04:54","guid":{"rendered":"http:\/\/www.springtextile.com\/blogs\/?p=334"},"modified":"2016-11-10T09:04:54","modified_gmt":"2016-11-10T09:04:54","slug":"how-americas-new-president-will-affect-the-global-economy","status":"publish","type":"post","link":"https:\/\/www.springtextile.com\/blogs\/how-americas-new-president-will-affect-the-global-economy.html","title":{"rendered":"How America’s new president will affect the global economy"},"content":{"rendered":"

(Sourcing from :\u00a0https:\/\/www.theguardian.com\/business\/2016\/nov\/09\/donald-trump-new-us-president-america-global-economy-china-mexico)<\/p>\n

From trade war with China to jobs turmoil in Mexico, Trump\u2019s reign will pose new threats to already fragile world economy.\"US<\/p>\n

Donald Trump\u2019s victory in the US presidential elections will have implications for the whole global economy.<\/p>\n

Mexico<\/h2>\n
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America\u2019s neighbour to the south has most to lose from the new Republican president. Trump\u2019s message to blue-collar voters in the rust-belt states was that US manufacturing jobs have migrated across the Rio Grande as a result of the\u00a0North American Free Trade Agreement <\/a>signed by Bill Clinton in the early 1990s. Trump has said that if he cannot renegotiate Nafta he will pull out of the free trade deal altogether. He has threatened to put a 35% tariff on some Mexican goods and pledged to close the \u201csweatshops in Mexico that undercut American workers\u201d.In addition, he has said he would round up and send home up illegal immigrants living and working in America, 5 million of whom are thought to be Mexican. If implemented in full, the impact on the Mexican economy of these policies would be profound. Trade between the US and Mexico would slow, factories would close, foreign direct investment flows would dry up and millions of repatriated workers would have to be absorbed into the Mexican workforce. US consumers would see the price of some goods rise.<\/p>\n

Mexico is not the only central American country at risk. Claudia Calich, fund manager at the M&G emerging market bond fund, says remittances from people working illegally in the US are worth 5.6%, 8% and 13.2% of GDP to the economies of Guatemala, El Salvador and Honduras respectively.<\/p>\n

China<\/h2>\n
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Some of Trump\u2019s economic manifesto has been hazy but his attitude to China could not have been clearer. He will instruct his Treasury secretary to label China a currency manipulator<\/a>, he will bring cases against Beijing to the World Trade Organisation, and he will consider imposing a 45% tariff on Chinese imports into the US to make it easier for American companies to compete.<\/p>\n

The US is the biggest single market for Chinese exports, accounting for about 20% of the total. There would be a risk that aggressive US trade policy could result in a marked slowdown in China\u2019s growth and a loss of manufacturing jobs.<\/p>\n

Faced with that possibility, Beijing would have two choices. It might take an emollient line, promising to increase direct investment into the US as a way of supporting Trump\u2019s attempt to rebuild the American economy.<\/p>\n

More likely, though, China would adopt an aggressive, nationalistic stance. Beijing is not without economic weapons, since it has amassed a vast stock of US Treasury bonds in recent years, the proceeds of its trade surplus with America. Beijing could meet Trump\u2019s threat with one of its own: to dump US assets. A tit-for-tat trade war, in which China puts tariffs on US exports, could not be ruled out either.<\/p>\n

The rest of Asia<\/h2>\n
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Barack Obama has shifted the focus of US foreign policy. For most of the postwar period, Washington has looked eastwards across the Atlantic. Since the collapse of communist Russia and the rise of China, its gaze has been westwards across the Pacific.<\/p>\n

This has been reflected in all three manifestations of American power: military, diplomatic and economic. Obama saw the Trans-Pacific Partnership <\/a>as a way of keeping countries such as Japan, Brunei, Singapore and Malaysia out of Beijing\u2019s orbit. All these countries have an export-led model of growth and Obama\u2019s plan was to create a US-led free trade zone that included all the major economies of the Pacific apart from China.<\/p>\n

That plan now lies in tatters. There will be no TPP under a Trump presidency and all the signs are that countries such as South Korea and Taiwan will be subject to the same protectionist strictures as Mexico and China.<\/p>\n

This would result in slower growth across Asia as exports and investment weaken. Japan, which has been in the doldrums for a quarter of a century and which remains on the brink of deflation, appears to be most at risk, but it is not alone in being anxious about the impact of Trump.<\/p>\n

In geopolitical terms, a tough US trade stance provides China with the opportunity to increase its influence in the region, bolstering economic ties and making countries of the Pacific rim less dependent on the American market.<\/p>\n

Europe excluding Britain<\/h2>\n
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The main short-term risk to Europe looks to be political rather than economic. Matteo Renzi\u2019s left of centre government may struggle to win a referendum on constitutional change in Italy next month. There are elections next year in Germany, France and the Netherlands where parties of the right will be looking to surf the populist tide that carried Trump to his win. There will be nervousness in the Baltic states of Latvia, Lithuania and Estonia about the possibility that Russia will be emboldened by Trump\u2019s apparent isolationism.<\/p>\n

There are, however, economic and financial implications for Europe. Like Asia, the eurozone is heavily reliant on exports as a source of growth. These could be affected in two ways: through a more restrictive US trade regime and if a weaker dollar drives up the euro on the foreign exchanges.<\/p>\n

Completing negotiations for the Trans-Atlantic Trade and Investment Partnership<\/a>(TTIP) always looked like an uphill struggle because Trump was against the concept in principle and Hillary Clinton \u2013 despite being a free trader by instinct \u2013 was not prepared to spend any political capital pushing for a deal. TTIP will never happen.<\/p>\n

The relative calm of financial markets immediately after Trump\u2019s victory will come as a great relief to European banks, which look highly vulnerable to a sustained bout of jitters. For months, there have been rumours about the health of the Italian banking system and one of Germany\u2019s leading banks, Deutsche<\/a>. Plentiful supplies of cheap money from the European Central Bank and relatively benign conditions in recent months have kept the problems hidden from sight. For now, at least.<\/p>\n

Britain<\/h2>\n
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The UK will not be immune from any slowdown in the global economy that might result from a Trump victory. Britain is the second biggest exporter of services in the world and America takes more of them than any other country.<\/p>\n

But Trump\u2019s protectionist measures are targeted at cheap manufactured goods, rather than the high-end services Britain provides, so at present there seems little reason to fear that any new barriers will be erected for UK firms.<\/p>\n

Trump has said the UK will be at the front of the queue for a new trade deal, which suggests negotiations on a bilateral TTIP-style deal could get under way between Washington and London.<\/p>\n

This would be helpful to Theresa May, who has been struggling to show that the UK can clinch its own trade deals after it leaves the EU. Her bargaining position with the other 27 members of the EU will be strengthened if she can show that she can do business with Trump, even though the stalled state of the current TTIP negotiations suggests that starting talks will be a lot easier than concluding them.<\/p>\n

In the short term, Trump\u2019s win helps take the pressure off the pound. Sterling has been sold heavily against the dollar since the EU referendum, partly because of uncertainty about what the UK will look like after Brexit<\/a>. Trump\u2019s victory brings risk and uncertainty into the equation for the US as well.<\/p>\n

Spring Hometextile Co., Ltd constantly update you the latest information on global trading, to find our latest products, please visit our official website: www.springtextile.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

(Sourcing from :\u00a0https:\/\/www.theguardian.com\/business\/2016\/nov\/09\/donald-trump-new-us-president-america-global-economy-china-mexico) From trade war with China to jobs turmoil in Mexico, Trump\u2019s reign will pose new threats to already fragile world economy. Donald Trump\u2019s victory in the US presidential elections will have implications for the whole global economy. … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":[],"categories":[10],"tags":[69,30,68],"_links":{"self":[{"href":"https:\/\/www.springtextile.com\/blogs\/wp-json\/wp\/v2\/posts\/334"}],"collection":[{"href":"https:\/\/www.springtextile.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.springtextile.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.springtextile.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.springtextile.com\/blogs\/wp-json\/wp\/v2\/comments?post=334"}],"version-history":[{"count":1,"href":"https:\/\/www.springtextile.com\/blogs\/wp-json\/wp\/v2\/posts\/334\/revisions"}],"predecessor-version":[{"id":336,"href":"https:\/\/www.springtextile.com\/blogs\/wp-json\/wp\/v2\/posts\/334\/revisions\/336"}],"wp:attachment":[{"href":"https:\/\/www.springtextile.com\/blogs\/wp-json\/wp\/v2\/media?parent=334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.springtextile.com\/blogs\/wp-json\/wp\/v2\/categories?post=334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.springtextile.com\/blogs\/wp-json\/wp\/v2\/tags?post=334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}