Donald_Trump

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Donald Trump the Fate of Global Retail Donald J. Trump the 45 th President of the United States of America is sure to be a game changer for the global retailers. He has been quite popular for his views on trade with China and on creating jobs in the manufacturing sector. While the world awaits more clarity on his trade policy speculation is rife based on his campaign rhetoric. We believe it is safe to assume that some massive changes in the tax labour immigration policy and trade agreements with other countries are on their way. Here are our two cents based on all Donald Trump has claimed during his election campaign. Renegotiation or Withdrawal from NAFTA and TPP Many times during the campaign we have heard Mr. Trump’s views on the North American Free Trade Agreement or NAFTA and the Trans-Pacific Partnership. He termed NAFTA as “one of the worst things that ever happened to the manufacturing industry.” He also mentioned that he will negotiate for a better deal for the American workers and if not he will walk out of them. In case he decides to walk out of NAFTA there will be a 35 tax on all imports made from Mexico. This will lead to severe escalation in the prices. Major companies like IBMGM and Coco-Cola will be under the axe as they manufacture their products in Mexico and ship them back to the United States.

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Source:https://assets.donaldjtrump.com/_landings/contract/O-TRU-102316-Contractv02.pdf The Trans Pacific Partnership or TPP proposes to remove trade barriers between Australia Brunei Darussalam Canada Chile Japan Malaysia Mexico New Zealand Peru Singapore Vietnam and the United States. During the election campaign Mr. Trump has referred to TPP as “a rape of our country”. This is because if the TPP comes into place the American markets will be flooded with goods produced elsewhere. Mr. Trump has shown strong opposition to this fact all throughout the campaign. He has promised to the American voters that he will withdraw from the TPP. Ifthis happens the prices of all the products imported from these 12 countries will skyrocket forcing consumers to look for cheaper alternatives at home. After the election of Mr. Trump news has emerged that the Obama administration has given up on pushing the TPP agreement and its fate now rests with the incumbent Trump administration. Import duties and Taxes Mr. Tump called China a “currency manipulator” and has made it clear that there will be an additional 12 tax on all goods imported from China. This might be a huge blow to price conscious retailers such as Walmart. The consumers have to face higher prices due the increase in the taxes which will push them to look for other alternatives. Opposition to Automation All throughout the election campaign Mr. Trump has vehemently opposed automation. If he continues to impose restrictions on automation in order to protect the American working class we will see a major slowdown in the American economy. This will also have a huge impact on global e-commerce as they rely heavily on selling mass produced goods from cheaper sources.

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Tax Reforms This comes as a huge relief for retailers as Mr. Trump has promised to bring about massive reforms in the tax structure especially in areas such as child care and elderly care and offered tax relief to the middle class. With the reduction in taxes and job creation retailers are hoping that the purchasing power of the people will increase. Now it is clearly evident that President Trump has trained his guns for a Trade War with China. However we do need more clarity on how his actual trade policy will look like in order to understand the full economic implications on the retail trade.

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