Global economic order and globalization

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Globalization can be characterized as a permanent shift toward greater international cooperation in ideas, politics, cultural values, economics, and information sharing (Payne & Askeland, 2016). Globalization has been a common characteristic in the twenty-first century. Modern technology, especially the internet, has become the most important medium for globalization to occur. Interdependence among nations has increased dramatically in areas such as transport, commerce, connectivity, and political policies. Globalization has facilitated the free flow of resources across continents, expanded free trade, and resulted in increased substantial foreign investment (Payne & Askeland, 2016). People from different nations are now, more connected than ever before, goods and services from one part of the world are now easily available in other regions of the world and travel has become more frequent. Globalization has both advantages and disadvantages to all the nations in the world. During his campaigns, the united states Donald trump advocated for a shift of policies and improvement in domestic economy which all had effects on globalization now and in the future. Further, the economic consequences of the trump presidency are enormous, and the policy changes are likely to have effects on the future of globalization and the global economic order.

The Advantages of Globalization

Globalization leads to the reduction of trade barriers inform of export and import restrictions, tariffs, and value-added taxes hence resulting to free trade (Seyoum & Seyoum, 2017). These leads to numerous benefits to consumers and economies such as enjoyment of greater choice of goods and services as foreign companies are in a position to offer their products. Further, they benefit from a greater variety of products and lower prices since competition drives the overall prices down. Further manufacturers can benefit from larger export markets as they can be in a position to sell their goods in a variety of countries as opposed to a single country. In addition, through free trade, a nation can specialize in the production of high-quality products that best suits them at significantly lower prices (Seyoum & Seyoum, 2017). This is made possible by the fact that globalization allows for importation of product from diverse nations fast and efficiently.

Globalization also allows easy and free movement of labor from one state to the other (Payne & Askeland, 2016). The free movement gives the sufficient conditions for the marketing of skill, which contributes positively to the economy of the country where people migrate. The free flow of labor also gives economies an opportunity to fix the gaps that exist in the labor markets (Seyoum & Seyoum, 2017). For instance, a country with the shortage of nurses can hire them from abroad to fill positions left vacant by shortages in local labor. Besides, foreign countries through globalization can be able to hire laborers through online telecommunications and tools, which was previously impossible. Through globalization, there has been an advancement in the transport system, which makes nations all over the world closer to each other (Seyoum & Seyoum, 2017). This also makes the movement of goods and services from one part of the world to the other possible and much easier including the remote areas.

Disadvantages of Globalization

Globalization can cause a lot of harm to economies that are at their early stage of development (Crane & Matten, 2016). For instance, free trade requires that all nations compete at even playing ground, which puts less developed countries at a disadvantage since it puts them behind the developed countries. Hence, this brings about the paradox of free trade that states that free trade is only possible if the growth of developing countries is allowed under a certain degree of economic protection. Also, globalization widens the gap between the rich and the poor, since it continues making the rich richer while the poor become poorer.

Globalization results to the flourishing of corporations and diminishing of the middle class and small companies. The corporations such as Exxon and Google are the decide what is bad and what is good for people and no one opposes due to lack of power to do so (Crane & Matten, 2016). Consequently, as a result of globalization, small firms are forced to follow the trend created by large enterprises and cannot set up their own. Further, the corporations exploit tax havens and avoid paying taxes in countries where they generate their profits from since they can be able to trade in a particular country while based in a different one (Crane & Matten, 2016). Further workers in these corporations in developed countries face unjust pay cut demands by the employer and threaten to export jobs to other nations. Globalization has also given multinational corporations more power and is now influencing most political decisions. Concisely, due to globalization, the multinationals have shifted from commercial activities to politics and even there is a threat of them ruling the world in future.

Globalization and President Trump's Impact on Global Economic Order

During his campaigns, the current United States President Donald Trump gave his stance on various issues including economics and improving the economy of the United States (Patterson, 2016). To do this, he advocated for a change of policies and the way the government conducted business. Some of the areas of the economy he touched on that needed improvement included renegotiation of the trade agreements and restructuring of the United States debt abroad (Patterson, 2016). He also threatened a tax slap on United States companies that were investing overseas, come up with taxes that would discourage companies from off-shoring jobs and production, suspend terror-prone region immigrants and expel migrants exceeding two million from the country. He also reaffirmed that within the first a hundred days in office he would build a wall to hinder immigrants from accessing the United States and label China as a manipulator of currency (Patterson, 2016). Most of the policies that trump advocated would have a great impact on the future of globalization and would likely reverse the milestones achieved in trade liberalization.

Given that the United States is the third most populated country in the world, the largest economy in the world and is measured by market dollars, this means that its withdrawal from the global economy would lead to globalized flows and stocks due to its large size (Patterson, 2016). Despite the fact that the country holds the largest foreign capital stocks, global trade and migrants, relative to its size, the country is less globally integrated compared to most countries. Hence, the areas where the direct effects of the presidency of Donald Trump on globalization could be felt most theoretically are areas where the country is most globally intertwined (Payne & Askeland, 2016). These areas include foreign capital stocks, trade, and migration. The United States has a footprint in global commerce that is usually understated since it imports a lot of final products which are produced along the international supply chain (Patterson, 2016). However, in global capital markets the country play a much fuller role, and within these markets, the foreign direct investment in the area that would be most affected by trump's policies. Regarding openness towards immigration, the country is more globalized compared to other nations. Currently, the United States acts as the home to more than 19 percent of the migrant stock in the world and accounts for just percent of the total global population. As such, the restriction of future entrants and expulsion of the high number of immigrant would, therefore, alter this aspect of the global economy directly.

Further, the policies set out by president trump could have effects on the behavior of other countries, as they would be forced to change. Some of the countries may retaliate against the America’s protectionist policies, which could result in precipitation of a trade war by Trump. These effects have already begun to be experienced by different countries, for instance, Nicolas Sarkozy a presidential candidate in French suggested that the European Union limit the participation of foreign companies in public contracts of the European Union and impose a tax on products from the United States (Payne & Askeland, 2016). China also started by imposing tariffs on imports from the United States and would limit the number of students studying in the United States. Other countries may decide to imitate the policies agendas by Trump. Hungary, Italy, and Greece have embraced the victory as justification for the policies, which will reverse the globalization policies. Further, others may choose to repudiate institutions and global norms that underpin the globalized economy in case they feel that the United States no longer commits to uphold the liberal economic order. This signifies the brief that the stability of the current existing economic order is dependent on the example demonstrated by the United States as the longstanding global economic hegemon (Acharya, 2017). This may overshadow chaos with the era of global trade coming to a stop. Further, the rules and membership of WTO at certain un-convections regarding the treatment of the refugees and migrants may soon be put to the test. The election of Trump may also bring along more rushed transition while the emerging markets that have benefited from the open economy come to defend it (Crane & Matten, 2016). This type of realignment is already evident for instance; the TPP is already planning to patch a deal in the absence of the United States.

Donald Trump threatened to impose high tariffs on imports from Mexico and China the major trading partners of the United States (Moran & Oldenski, 2016). He also threatened to terminate or renegotiate the NAFTA (North American free trade agreement that was meant to improve trade within close allies to the United States. Further, he threatened to pull out of WTO (The World Trade Organization) and withdraw from TPP (Trans-Pacific Partnership) among others (Moran & Oldenski, 2016). All these organizations and agreements such as NAFTA and WTO alongside globalization have contributed to enormous benefits to the economy of the United States. Their termination and imposition of trade restriction would cause foreign retaliation, which would in turn damage the firms in the country leading to job loss. In addition, it would hinder free trade among the United States and other nations, which would result in lack of specialization in production of goods and services and less market for exports by different countries that were depending exporting to the country.

The election of Donald Trump would lead to the injection of high levels of uncertainty, which has a direct effect on future of globalization (Moran & Oldenski, 2016). The policy of breaking globalization by the US president is an apparent source of uncertainty of itself and in itself. First, it is assumed that he will deliver on his anti-globalization agenda. However, it is not clear whether trump will pursue the program in full and whether any constraints will arise regarding its implementation. Secondly, it remains unclear how he will respond to various unanticipated occurrences during his presidency through his anti-globalist perspective prism (Payne & Askeland, 2016).

Trump is also likely to increase expenditure on infrastructure and defense such as building a wall to keep off immigrants (Moran & Oldenski, 2016). Further, the deportation of a vast number of immigrants and detaining people will add on to the expenditure of the country. He is also likely to cut down taxes dramatically. The policies will also result in discrimination of some countries such as China and Mexico as they will not be subjected to the same protectionist strictures as countries such as Taiwan and South Korea (Payne & Askeland, 2016). These changes in policies have a likely hood of causing variations in the distribution of economic gains. Further immigrants and citizens from other countries will have difficulties changing jobs, asking for higher pay and proper treatment and also their ability to move will be reduced. Cooperation between America and most developing countries could also be undermined. Consequently, in future, their globalization will experience stabilization or occur at a more modest past than ever before.

There have been declines in the demand for globalization related services and a shift in exchange rates for United States companies and plunging of commodity prices (Moran & Oldenski, 2016). The effects of these policies on global growth and development may be terrible and substantial. This is because Trump may reverse the globalization process that has already kicked off. Hence, he will heighten the extent to which the global economy is viewed as a zero-sum competition hence raising the risk of political conflict (Moran & Oldenski, 2016). Economies that are developing will not be in a position to use trade as a booster of growth and will also be hard for them to send laborers to richer countries. Further, the international cooperation, which in the past provided the cushion against economic and financial hardships in developing world, could also be undermined by trumps policy and eventually break down.

Conclusion

Globalization has led to increased interdependence among nations in areas such as trade travel, communication, and political policies. It has also enabled the movement of capital across borders, increased massive foreign investment and increased free trade. In addition, because of globalization, people are now more connected, and products from one part of the world are easily available on the other side. Globalization also has adverse effects such as overpowering multinationals and undermining the economies of developing countries in favor of the established ones. The election of President Donald Trump meant a change in the future of globalization and the economic order. Trump came up with policies that would lead to change in globalization. His policies changed the behavior of most nations such as the imposition of tariff by China on US produced goods and services. The policies have also resulted in uncertainty, affected the trade, migration and foreign capital markets, and caused substantial effects on the global growth and development. Concisely, the election of Donald Trump as the president of the United States has changed the future of globalization and decreased the chances of open global economic order enduring.

References

Acharya, A. (2017). After Liberal Hegemony: An Advent of a Multiplex Worlds Orders. Ethics & International Affairs, 31(3), 271-285.

Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenships and sustainability in the age of globalization. Oxford University Press.

Moran, T., & Oldenski, L. (2016). How offshoring and global supply chains enhances the US economy. Policy Brief PB, 16-5.

Patterson, J. (2016). Native American Struggle Between Economic Growth and Culturals, and Religious, and Environmental Protection: A Corporate Solution. Notre Dame L. Rev. Online, 92, 140.

Payne, M., & Askeland, G. A. (2016). Globalization and international social works: Postmodern changes and challenges. Routledge.

Seyoum, B., & Seyoum, B. (2017). US foreign trade zones and import intensity examining determinants of import intensity in US foreign trade zones. European Business Review, 29(1), 103-122.

November 23, 2022
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