This presentation talks about USA's changed approach for international Business and trade multilateral trade agreements, under Trump's regime.

1. New Protectionism in
International Business and role of
USA
PREPARED BY: ANSHUMAN SOLANKI

2. Trump “sees trade as a zero-sum game, and sees anyone ‘beating’ the United States as a threat.”

3. Introduction
 Post Obama regime newly elected Trump administration has shown a
paradigm shift in US’s International Business policies.
 Trump administration has officially stepped out of many treaties and alliances
stating US interest.
 US has also created hard business scenario for foreign cooporations by
imposing tariffs and duties.
 The economic reasons for the US to leave and renegotiate transnational
agreements seem fairly compelling but From a strategic standpoint, however,
the US may be giving up much of its dominance in different regions.

4. Agreements and treaties
 TPP( Trans-pacific Partnership Free Trade Agreement )
• trade agreement between Australia, Brunei, Canada, Chile, Japan,
Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam signed on 4
February 2016.
• After the United States withdrew its signature, remaining nations
negotiated a new trade agreement called Comprehensive and
Progressive Agreement for Trans-Pacific Partnership.

5.  North American Free Trade Agreement (NAFTA)
• The United States commenced bilateral trade negotiations with Canada
more than 30 years ago, resulting in the U.S.-Canada Free Trade
Agreement.
• Tariffs were eliminated progressively and all duties and quantitative
restrictions.

7. Reasons
 since free trade supported by these treaties allowed relaxation in duties
and tariffs, foreign corporations were able to easily penetrate into lucrative
US market.
 South-east Asia provides workforce at very less wages compared to US,
which made US companies to invest and employee people from these
cheap labour regions.
 These cheap labour markets resulted in less job creation In US economy.
 Because of low or negligible tariffs, tax losses, revenue deficit was a
threating outcome for US economy.
 President Trump is reported as having said there are more BMW and
Mercedes on Fifth Avenue than there are Chevrolets in Germany.

8. facts
 Monthly wages in Vietnam, can be as low as $120 USD per month, in Mexico
average wage was 4.25$, while US factory workers earn around $2,000 a
month.
 after China entered the WTO, there was a loss of 2.8 million manufacturing
and high-tech jobs in US.( source : International Business Times)
 since 2011 the US dollar is up 26%, essentially making US products 26% more
expensive on foreign markets and making foreign imports cheaper at home
and abroad.
 BMW, Daimler and Volkswagen, all have production facilities in Mexico to
build cars and parts for the American market. President Trump’s proposed 35%
tariff would most likely make this business model non-Profitable, and directly
or indirectly 1,00,000 people are employed with these facilities.

9. Implications
 US exit from trade agreements, has created an opportunity for China to
renegotiate trade deals with Agreement allies to gain trade volumes and
establish global dominance in trading.
 Initially US will observe a gradual decline in its trade volumes.
 US’s status of global leader in free trade will be challenged by rival nations
like China, Russia.
 In long term these policies might have both positive and negative
impacts, and US might be forced to renegotiate trade deals.