The future president of the United States has reaffirmed his intention to take on all of America’s commercial competitors. Protectionism will be the guiding principle of his economic policy. It remains to be seen how China and the eurozone will respond.
The construction tycoon aims to restore the prestige of American industrial activity.
His stimulus program, based on a massive corporate tax cut, the elimination of estate taxes, and a $1 trillion infrastructure investment plan, is expected to boost employment in the industry.
To initiate this move, he will implement high import tariffs, stop the Trans-Pacific Partnership (TPP) agreement—a multilateral free trade treaty signed in February 2016—build a wall between the United States and Mexico, and demand an end to China’s manipulation of its currency to undervalue it.
Relations between Beijing and Washington are likely to worsen, especially as the yuan has appreciated since 2007 and has been heavily defended by the Chinese central bank during the various episodes of capital flight observed since August 2015.
In this context, it is difficult to envision global economic development with certainty. Will confidence remain high when new geopolitical tensions arise worldwide with an America determined to fight to assert its uncontested and unquestionable position as a global leader?
Will the European Union remain powerless and unaffected by Trump’s attacks?
The member countries alone will not be able to do much. But the eurozone must seize the opportunity presented by Brexit and Trump’s aggression to raise its voice and ensure its economic sustainability by maintaining a social model that is generally improvable but feasible.
