US: Start of a new era in trade policy? - NAB
|Research Team at NAB notes that the trade was one of the key themes of Mr Trump’s campaign and as his inauguration as President nears, attention focuses on what trade policies the Trump administration will pursue.
Key Quotes
“Mr Trump’s call for radical reform in US trade policy to lift domestic employment and wages reflects his strong criticism of what past policies have delivered. He has advocated imposing higher tariffs on countries that trade unfairly (with particular criticism of China), re-writing or scrapping the North American free trade agreement (NAFTA), taking a more aggressive line in bringing cases to the World Trade Organisation (WTO) and avoiding big new multi-country trade deals like the Trans-Pacific Partnership.”
“The difficulty that Mr Trump faces is that sweeping trade measures would best achieve his ambitious jobs agenda, but those are precisely the reforms most likely to lead to WTO cases and trade wars.”
“A trade war could also appreciate the US dollar via a ‘flight to safety’ in financial markets, working against the improved trade balance that the protectionist policy was intended to achieve. In summary, we see a significant move towards protectionism that still proves unable to generate enough jobs to re-build the US industrial sector and which is generally not positive for Australia.”
“The economic impact of using potential measures already on the US statute book ranges from fairly minor to presenting quite a shock to established economic patterns.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.