At Trump’s first State of the Union earlier this week, he was silent on trade relations, saying at most 80 words on the subject. His one-liners were predictably vague — “The era of economic surrender is totally over.” On the campaign trail and during the beginning of Trump’s presidency, “America First” and “avenge the theft of manufacturing jobs” was the drumbeat, and anti-globalization sentiment was seemingly sparked. Foreign economies and businesses were unsure of how to respond or what was to come. While he recently imposed heavy tariffs on washing machines and solar panels, his movement has been much more moderate than he promised his base. With one year in, it is still uncertain if his trade policy is all rhetoric, or action that will end globalization as we know it.
Action or not, public narratives can shape perception, which in turn can shape economic reality. Business and economic leaders can react to the perceived future in their decision-making processes, putting the immense positive gains from globalization at risk. Globalization has lifted living standards and created measurable benefits for consumer choice, household wellbeing, business competitiveness, and government’s ability to serve its constituents. Since 1950, trade liberalization has created $18,131 in GDP per American household, and, from now until 2025, would create an additional $4,400. Becoming protectionist would jeopardize these tangible rewards and stifle growth. The conversation needs to be both about redistributing the theoretical economic pie and how to grow it.
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