How will the US economy survive Trump
Since Donald Trump ruled the White House, the global economic order seems to have been turned on its head: trade routes are blocked, supply chains destroyed, partners become opponents, and the exchange of goods for the benefit of many fences to protect some. Never since the opening of the Iron Curtain has the world been faced with such a fundamental course of action: Are economic nationalists like Trump stopping the increasing interdependence of politics, societies and economies, which has fueled growth for decades but has also raised so many new questions of justice? Or will globalization survive the era of populism, possibly even purified and in better shape?
At first glance, there is much to suggest that those who promise voters the resettlement of industries that have migrated and an economic policy based solely on self-interest will prevail. Trump did not trigger the trend at all; according to a study by the Washington Peterson Institute, the development began 15 years ago. It was fueled by the founding of right-wing and left-wing populist parties around the world, and then established parties jumped on the bandwagon. There are now nationalist economic tendencies in almost all of the 20 large industrialized and emerging countries.
The swing was preceded by a long wave of liberalization that cracked state monopolies, unleashed the financial markets and shifted entire branches of industry to new continents. Many benefited: Emerging countries like China took over the production of countless goods from the rich "West" and thus enabled hundreds of millions of their citizens to emerge from abject poverty. In the industrialized countries, on the other hand, prices for products and services fell, and it was also possible to replace many of the jobs that were lost with new, often better ones. However, there are extreme regional differences to this day: While companies can no longer find staff in some places, other regions are literally deserted. Especially here populists find those people who believe they can protect themselves from competition with tariffs and walls.
The trend towards foreclosure and its consequences can be read from the numbers. China reported on Friday that economic growth in 2019 had fallen to 6.1 percent, the lowest level since 1990. President Xi Jinping likes to pretend to be the guardian of free trade on the big stage - for example at the World Economic Forum, which will again attract hundreds of politicians and managers to Davos from Tuesday. In fact, however, he is following the same economic nationalist course at home as Trump is in the USA. According to the World Trade Organization (WTO), the entire global movement of goods increased by just over one percent last year.
However: The same WTO report also states that an increase of almost three percent is to be expected again for 2020. The reason is that, despite all the noise that the USA and China are making, it is often overlooked that globalization is continuing elsewhere: The EU alone recently concluded trade agreements with Japan, Canada and the Mercosur states in South America. And the Pacific countries around Canada and Japan simply put their TPP treaty into effect without the US when Trump left. "Basically, everyone knows that it would not make economic sense if everyone were to manufacture everything themselves again in the future," says economic expert Chad Bown.
Experts like him and Sebastian Dullien, head of the Düsseldorf Institute for Macroeconomics and Business Cycle Research, therefore believe that the interdependence of the world will continue - albeit in a slightly different form. "The phase of hyperglobalization that we saw up to the financial crisis in 2008 and 2009 should be over for the foreseeable future," says Dullien. "Companies have become more cautious about relying more and more on cross-border supply chains because with Brexit and the new trade conflicts they have learned how vulnerable such constructions are."
Globalization is therefore likely to proceed more cautiously in the future - which gives governments and critics the opportunity to make changes more transparent and socially compatible than before. According to Bown, in the long run, paradoxically, even Trump's brutal policies could help strengthen world trade and make it fairer. For example, the new North American trade agreement USMCA is forcing Mexico to no longer rely solely on dumping wages in competition, but to pay its workers better. China, on the other hand, will have a harder time stealing technology and making it more difficult for foreign companies to do business in the People's Republic after the latest trade agreement with the US is concluded. "Trump, the globalist" - that would be a punch line that would fit into this confused time.
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