Impact of Trump Administration on the World Economy,

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By underlining Trump's impulsivity, unpredictable nature, his combative tone as president, and his departure from accepted norms in international relations, Rothwell and Diego (2016) issue a warning that the Trump administration poses a threat to the world economy (Rothwell & Diego 2016, p.19). With Donald Trump's victory in the presidential election of 2016, America entered a time of change. Hot-button issues like economy, foreign policy, and legislative nominations as well as civil rights issues came to the forefront throughout the bitterly contested election. Trump's opinions on each issue helped persuade voters to support or reject him, but his declared views on a number of them or against him, his expressed dedication to national economic development received considerable support amongst the body of enfranchised citizens (Noland, Hufbauer, Moran & Robinson 2016).

Trump’s determination of bettering the U.S. economic climate is primarily influenced by fundamentally altering the way that the governing administration carries out its business. The U.S president mentioned ideologies - such as the restructuring of the United States’ financial obligations in foreign countries and trade agreements renegotiations- sent surprising waves through the entire economic community. Throughout his run for the presidency, Donald Trump defined some crucial aspects of the economy which were going to be aimed at for advancement. In the course of his campaign trail, Trump reported high rates of unemployment, out-of-control administration shelling out along with the adverse United States trade equilibrium as incongruous facts. As a countermeasure to these issues, Trump endorses a policy of “United States economic independence” (Noland, Robinson & Moran 2016, p.17). A comprehensive change in the United States business routines both nationally and internationally has been significant aspects of his strategies to attain economic independence. Based on the public record, (Bledon, Casey & Benson 2017, p.230) the U.S president details seven steps which he is going to consider promptly so that he can promote prosperity as well as economic development in America:

Enforce tariffs as well as taxes on nations actively manipulating their currencies to exploit the United States, and brand China a currency manipulator

Apprise the American Trade Representative to provide trade cases against the Chinese administration addressing infractions of the World Trade Organization (WTO) guidelines and standards

United States’ disengagement from the Trans-Pacific Partnership (TPP)

Employ stringent trade negotiators

Renegotiate, and perhaps pull away from, the North American Free Trade Agreement (NAFTA)

Lead his treasury secretary to recognize infractions of trade contracts, and utilize American and intercontinental regulation to get rid of any violations

Impose extreme tariffs towards nations promoting illegitimate exercises, like the theft of the American trade confidential information (Chow, Sheldon & McGuire 2017, p.18).

The principal concept of the mentioned plans is to restrict the effect of globalization on the economic climate of the United States. By considering an extreme position towards withdrawing earlier trade agreements like NAFTA, KORUS (South Korea/US) and averting access into the Trans-Pacific Partnership, the Trump administration is going to accomplish economic independence using minimizing the trade debts (Bergsten 2017, p.30).

As witnessed by the globe’s financial markets within the aftermath of the immediate election, the possible effect of Trump’s guidelines to the international commerce is predominately arguable. Depending on a person’s point of view, recommendations to restructure global trade agreements, enforce strong tariff structures and implement WTO rules can be viewed as either negative or positive (Alim & Widodo 2017).

Although Trump’s recommended steps could be perceived to increase value towards the American production industry, the trading areas of Latin America and Asia may associate them to monetary drop. In case they are enforced, rigorous tariff frameworks may raise a concern about the viability of the exportation of products to America from third world countries. If the tariffs are fixed on imports from nations that actively devalue their currency, the value generated from the production of goods in these countries will be extenuated (Alim & Widodo 2017). Consequently, a lot of transnational organizations may decide on relocating their manufacturing establishments.

A number of Trump’s monetary manifesto was unclear, but his mindset to China was crystal. He is going to direct the Secretary of Commerce to brand China as a currency manipulator; he is going to bring cases against China to the WTO and reckon enforcing a trade tariff of 45% on the imports from China into the United States to level the competitive field for American businesses. The United States is the most significant marketplace for exports from China, constituting to approximately 20%. The extreme United States trade guidelines may pose a risk towards the global economy since it could lead to a marked collapse within China’s development along with a loss of production employment.

Confronted with that likelihood, China might have two options. It may consider an emollient path, assuring to raise primary investment into America as a means of backing Trump’s effort to reconstruct the United States economic climate. Nonetheless, the Chines administration would have to conform to a hostile, nationalistic position. China does not lack financial weapons, considering that it has accumulated a massive stock of the United States Treasury bonds recently. The Asian state is poised to encounter significant monetary transformation in case Trump’s guidelines are put into action (Elms & Sriganesh 2017, p.247). To preserve trade associations with the United States, the Chinese administration is likely going to have to concede. Despite the fact that the final bargain may be simple, even a temporary shrinkage within the Gross Domestic Product of China could bring about extensive modifications within global markets.

From the standpoint of the United States, modification of NAFTA and KORUS as well as non-entry into the TPP can be viewed as beneficial advancements associated with improving the balance of trade. Typically, being considered as a consequence of NAFTA, the united states has encountered a trade shortfall with Mexico for over two decades. Since the year-end 2015, the deficit amounted to approximately US$60 billion. Since the formation of KORUS, American trade shortfall with South Korea has elevated by 114.6% and, since the year-end 2015, the trade deficit accumulated to US$28 billion (Pierce 2017, p.26). The trade agreements renegotiation with the Mexican and South Korean states within the Trump government is going to act as templates through which potential deals are formulated. Efforts to minimize the American trade debts under Trump’s guidelines are most likely going to benefit American employees and strengthen the growth of the Gross Domestic Product, at least for a while. The vast implications resulting from a stunning shift of guidelines from globalization to monetary independence are controversial.

Time will tell if the guidelines put in place by the Trump administration are executed, efficient, and play a role in the growth of the global economy and affluence. Although a large percentage of his enthusiasts refer to the importance of requisite economic transformation as their fundamental basis for supporting him, it continues to be seen in case the policies laid out in his seven-point strategy is going to offer the expected effect on the trade stability. (Gostin 2017, p.685). The procedure of renegotiating current trade deals, as well as the enactment of intercontinental regulation on economic superpowers like China, is going to offer a lot of unique difficulties. Even though the implementation of Trump’s guidelines may enhance the economic climate of United States, the capacity to physically sanction its tenants on trade associates might end up being a massive endeavour.


Alim Rosyadi, S. and Widodo, T., 2017. Impacts of Donald Trump’s Tariff Increase against China on Global Economy: Global Trade Analysis Project (GTAP) Model.

Bergsten, C.F., 2017. Currency Manipulation and the NAFTA Renegotiation. The International Economy, 31(3), p.30.

Blendon, R.J., Casey, L.S. and Benson, J.M., 2017. Public Opinion and Trump’s Jobs and Trade Policies. Challenge, 60(3), pp.228-244.

Chow, D.C., Sheldon, I. and McGuire, W.H., 2017. A Legal and Economic Critique of President Trump's China Trade Policies.

Elms, D. and Sriganesh, B., 2017. Trump's Trade Policy: Discerning between Rhetoric and Reality. Asian J. WTO & Int'l Health L & Pol'y, 12, p.247.

Gostin, L.O., 2017. How Will President Trump’s Policies Affect Domestic and Global Health and Development?. Jama, 317(7), pp.685-686.

Noland, M., Hufbauer, G.C., Moran, T. and Robinson, S., 2016. Assessing trade agendas in the US presidential campaign. Peterson Institute for International Economics.

Noland, M., Robinson, S. and Moran, T., 2016. Impact of Clinton’s and Trump’s Trade Proposals. 16-6 Assessing Trade Agendas in the US Presidential Campaign, p.17.

Pierce, R.J., 2017. The Effects of President Trump's Reversal of President Obama's Climate Policies are Greatly Exaggerated.

Rothwell, J.T., and Diego-Rosell, P., 2016. Explaining nationalist political views: The case of Donald Trump.

February 01, 2023

Government Economics

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