A video released by president elect Donald Trump has set out his plans for his first days in office. First on his agenda? Killing off the Trans-Pacific trade deal. The new man at the helm of American politics, and the man who will become the worlds most powerful political figure. Trump has made no secret during his campaign that he intends to remove the United states from several trade agreements that he sees as damaging to the domestic US economy.
The deal, which was to be between the US and twelve Pacific rim countries but which most notably didn’t include China, who are the worlds largest export economy. The aim was to strengthen Americas trade in the region and with the region.
But Mr Trump has a very different take on the future of Americas economy, with the potential of taxing imports from some of their biggest trading partners. Trump wants to put the US domestic manufacturing sector on an equal par, and the business tycoon sees this as ultimately the best way to achieve parity on pricing against a nation that can produce endless supply at very cheap rates. It’s also thought that the move is designed to bring American companies manufacturing back to the US, with companies such as Apple manufacturing their products in the far east.
This will be no mean feat for Trump, in 2015 the US had a trade deficit of nearly $400 billion with China alone. The craving of cheap goods, along with a history of heavy imports of electrical goods means that taking a massive chunk out of this gap will certainly require some revolutionary ideas. Though many of Trumps detractors are sure to jump on the idea that his efforts will only result in higher prices for goods as cost implications are passed back to the customer. It seems unlikely that businesses will be willing to take horrific haircuts on their profits of such goods. Profits which have driven Apple to become the worlds richest company.
On top of the cost pressures, the US also has a large skills shortage. It would take many years to rectify this with huge scale training required. As the US has little recent history of electronic consumer goods manufacturing on a scale required to keep it’s tech hungry citizens happy. It would seem that a drastic move on the president elects part would also cause significant waves in the financial markets, which would undoubtedly damage his leadership. He’s built his presidential campaign on his corporate background and ability to manage the economy.
Surely a Trump induced economic downturn would be fatal to a president who’s financial background got him there in the first place.
Joseph is a 34 year old freelance writer from London. He has a wide interest in politics and specialises in the subject. He's also a blog writer in his spare time.