On 8th November 2016, the American people elected Donald J. Trump the next President of the United States of America. Among the many changes that Mr Trump has promised to make in office to American policy is a radical shift in the US approach to trade.
According to a memo drafted by Trumps transition team, President-elect Trump will begin the process of re-shaping America’s trade policy on Day 1 of his administration. The plan includes, the re-negotiation or withdrawal from the North American Free Trade Agreement (NAFTA) and the withdrawal from the Trans-Pacific Partnership (TPP) . After many years of American leadership on the global free trade agenda, do we now see the end of trade?
What we are likely going to see is a radical shift in US trade policy away from pushing for large ambitious international trade policy towards a much more domestic focused economic policy. This includes on the one hand reforms in the areas of tax and energy as well as an increase in infrastructure investment, for example.
On the other hand, we are going to see a halt or delay of regional trade agreements. This is likely to include the Transatlantic Trade and Investment Partnership (TTIP) agreement whose negotiations have already been halted between the EU and the US. A failing of TTIP will be a major disappointment to all those Scottish businesses who have strongly advocated for such an agreement for many years.
With the UK’s vote to leave the EU we may see the opening up hopes for a bilateral trade arrangement between the UK and the US which is more likely now under a Trump presidency; but the details on this will have to wait until Britain has finalised its exit negotiations with the EU.
Mr Trump’s shift towards a more protectionist position is very concerning in a world that has become increasingly reliant on global trade flows . But it is by no means the end of trade: Nothing suggests that this will dampen the ambition of Scottish business plans to grow in the US. Quite the contrary, we are still seeing strong demand for Scottish businesses to grow in the US market. The Scottish and UK Governments have given encouraging signals that they will increase logistical and financial support for companies. As strange as it may sound, in these challenging times, there maybe not a better time to think about making the step into the US.
Scottish North American Business Council