Trump effect

The rest of the world needs to keep a close tab on what Trump does to keep more jobs back in the US


Donald Trump. Photo: Reuters
Donald Trump. Photo: Reuters

There are around 160 million workers in the US. A thousand jobs is just a drop in this vast ocean. However, the recent decision by the management of Carrier to go back on its decision to move its factory from Indiana to Mexico is important because it offers us some clues about the revival of industrial policy in the US under Donald Trump.

All this comes nearly 25 years after Ross Perot campaigned on the issue of how a free trade agreement with Mexico was hollowing out the manufacturing base in the US.

The rest of the world needs to keep a close tab on what Trump does to keep more jobs back in the US, especially on whether he does anything to prevent the effects of his expected fiscal stimulus from leaking jobs to the rest of the world.

It is interesting that rust belt industries like steel are gaining ground in the stock markets because of expectations that Trump will spend to rebuild infrastructure in his country.

The big question: Will protectionism trump free trade?

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