As the world keeps steering towards a hard right, global trade seems to be in a state of flux. During the election campaign, presidential candidate Donald Trump often tore into existing trade agreements, threatening to slap taxes on U.S. firms that shift operations abroad.
Netherlands somehow avoided electing right wing firebrand Geert Wilders last week, but France’s right wing leader Marine Le Pen leads the opinion polls by a sliver of a margin. And we are still waiting for the effects of Brexit to percolate into the British economy.
Global trade seems to be the biggest casualty of the growing protectionism around the world.
In a rare public speech in Beijing today, Apple’s CEO Tim Cook spoke out in support of globalization, saying that China should keep opening up its economy to non-Chinese companies:
“I think it’s important that China continues to open itself and widens the door if you will. The reality is countries that are closed, that isolate themselves, it’s not good for their people.”
Global Times, a state-run Chinese news agency, published an article a week after Donald Trump got elected, and briefly drew the contours of a Chinese response in case of a trade war between the world’s two largest economies:
“If Trump imposes a 45 percent tariff on Chinese imports, China-US trade will be paralyzed. China will take a tit-for-tat approach then. A batch of Boeing orders will be replaced by Airbus. US auto and iPhone sales in China will suffer a setback, and US soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the US.”
Cook seems to be asking China to stay open even if doors around the world keep closing. China will be more than happy to be the leader in global trade, but no one knows how things will be a year down the road. For now, global trade seems to be in an uncertain future, and China may well hold the key to its long term success.
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