Question

Discuss how Trump's approach to trade has impacted globalization.

Answer 1

Globalisation refers to the increasing interconnectedness of cultures and economies around the world. The main measures of globalisation are levels of immigration, international trade, and FDI, or foreign direct investment.

Looking at immigration, it is immediately clear that Trump has, on some level, disrupted globalisation. In early 2017 he introduced the ‘Muslim ban,’ or Executive Order 13769. This decreased the nunber of refugees allowed into the United States, and also suspended the entry of Syrian immigrants. On top of this, Trump has promised to build a wall between the US and Mexico, and has maintained a rather anti-immigrant stance throughout his campaign and presidency.

Trump has also introduced significant policies to combat international trade. On top of withdrawing from TPP and TTIP, Trump has heaped large tariffs on the EU, Mexico, China, and Canada. This has resulted in retaliation by China, the EU, and Canada. These tariffs, as well as the withdrawal from free trade agreements, make trade with the US more expensive and difficult. As a result, trade is likely to fall.

And this leads on to the final point, about FDI. If it is difficult for a country's businesses to trade internationally then said country becomes a less attractive place to invest. This is only exacerbated by the anti-immigration policies, which limit the supply of labour in the US. On the other hand, it may have the unintended consequence of increasing investment from the US into other countries, as businesses look to set up shop elsewhere.