One of the key uncertainties surrounding global trade in 2017 is the stated trade policies of the new US Administration, some highlights are as follow:
- US has announced its intention to pull out of the Trans-Pacific Partnership Agreement, a geographical area that covers 40% of global economy
- US will seek to re-negotiate the terms of the North American Free Trade Agreement (NAFTA)
- the Administration's stated goal to impose a border adjustment tax on imports into the US
- the Administration's preference for bilateral trade deals
- the new slogan of "Buy American, Hire American" indicate a shift in incentives to bring manufacturing jobs back to the US
- Administration officials have conveyed the message that US is not bound by World Trade Organisation's decisions
The upshot of all these is that the Trump Administration will be closely scrutinising trade terms with all major trading partners. This will add to the uncertainties of global economic growth in 2017.