Deglobalisation in the Global Economy

 

 REUTERS/Yuriko Nakao
via World Economic Forum; Image:REUTERS/Yuriko Nakao

It had been predicted a while back that electing Donald Trump for president would bring rise to uncertainty in the markets, causing the US dollar to sink and the global market to crash within the first few hours. They were absolutely right.

The result of the US presidential election is more than disappointing. It is devastating – for multiple reasons. Those privileged enough to overlook the damage the Trump effect has wrought on marginalised groups to focus on his “policies” believe they will “Make America Great Again.” For the sake of the world they carry on their nation’s shoulders, I hope to God they’re right. Because based on those policies, that is not what many have come to believe.

As I have stated in this article, the International Monetary Fund (IMF) has predicted a slow growth of the global economy in the coming year. This is attributed to the slow development and progress in the world’s largest economies such as China. Global terrorism has also played its part in growing uncertainty and recent developments have taken its toll on global trade.

However, the slowing growth has also been attributed to the isolationist ideals perpetuated by Brexit as well as the 2016 presidential election. Should these ideals persist as they have, the effects would not benefit anyone in the international community.

Globalisation has brought trade and the rise of multi-national companies into the playing field. The suggestion to tighten, practically close, borders with the promise of “bringing jobs back” is both problematic and risky. Such has been said with Brexit, multiple times, denying free movement of labour restricts access to the single market. This would make business difficult, profits would not come as quickly due to losses in trade and companies would not be as successful. Hence, jobs still might not be readily available for all. The xenophobic notion some hoped would bring good to the job market and economy will not necessarily help anyone, let alone Americans themselves.

Trade has done its damage, yes. But it has been proven that only 1 in 5.5 million manufacturing jobs lost was due to competition with China. Even if trade were the main culprit of the problem, the benefits, though difficult to see, outweigh the costs for Americans as well as the rest of the world. With effective action by the government, these benefits can be used to aid and compensate those affected by trade and the rest of the world’s economy does not have to suffer.

Imposing tariffs on Chinese imports would affect China’s newly stabilised economy. And in turn, companies may relocate their factories to other countries, not back to the United States. Americans will only suffer at the hands of that policy- not gain. As a result of China’s affected economy, other countries such as Cambodia (which relies heavily on trade with China), Singapore, and Malaysia are dependent on trade and should the global trade be limited, the hit to their economies would be unmistakeable. Depressed economies of other countries affect those they trade with due to lower demand.

We are inevitably linked to one another in a web of markets and pretending otherwise is useless.

When America sneezes, the rest of the world catches a cold. When hateful sentiments slip out the mouths of those with influence, it goes into the ears of people continents away. The international community must work as a community because we can no longer separate ourselves from each other without causing irreparable damage. We should learn from trade agreements such as the recent one between the European Union and Canada. Supporting people whose ideals are the reason the global economy is not in a reassuring place will not do anyone any good.

At this point in time, the economy is not the main concern, nor should it be. However, for those who thought “policies” such as these were the answer to your problems, think again. With the right strategy, we would have been able to recover from trade with an advantage. We can only hope the same recovery can be made from the likes of Donald Trump.

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