What Will Trump’s ‘America First’ Approach Do For the Global Retail Market?
In this article (5)
In case you hadn’t noticed, U.S. President Donald Trump has elected for an ‘American First’ approach that will favour national brands, citizens and spending priorities. Now while there is nothing necessarily wrong with this, the tone adopted by the President has been divisive in the extreme while causing racial tensions to rise nationwide.
Trump’s insular outlook is also bad news for globalisation, with the environment already suffering amid the President’s attempts to slash climate change. Make no mistake; the global economy may be about to follow suit, however, particularly interconnected entities such as the retail sector.
How Will Trump Impact on Retail and Lucrative Markets Such as Singapore?
When Trump outlined his philosophy and planned spending during a recent address to the nation, he did not specifically touch on retail as an independent entity. He has already maligned global retail partners during his brief tenure as President, however, with the Mexican sector struggling as a result of the President’s controversial objective to build a border wall and hike import taxes. In fact, firms such as Cath Kidston are already thought to have shelved plans to expand into Mexico, restricting both American companies and the global sector as a whole.
“have yet to be seen, of course, but the nation’s export market is likely to shrink and have a negative impact on GDP for 2017.”
The negative impact of Trump’s presidency on the retail market is unlikely to end here, however, with Singapore also facing potential issues. Historically, Singapore exported goods in excess of $100 million per annum to the U.S., with retail favourites such as chocolate, cocoa and snack products dominant. This number had been expected to rise incrementally under the terms of the Trans-Pacific Partnership (TPP), until President Trump withdrew the U.S. from the ongoing agreement as part of his desire to increase the number of American jobs available to citizens.
The full affects of this move and its impact on Singapore’s trade relationship with the U.S. have yet to be seen, of course, but the nation’s export market is likely to shrink and have a negative impact on GDP for 2017. This news has dampened the enthusiasm that surrounded positive domestic figures in the region, with total retail sales in Singapore rising by 2.0% at the beginning of January and supermarket transactions increasing by as much as 13.0% during the same period.
The Last Word: Worrying Times for the Global Retail Sector
In some respects, Trumps approach may yet create a more competitive retail sector that benefits the customers. The President’s desire to create competitive U.S. exports have already caused the value of the USD to waiver in recent times, which in turn will drive market competition while aiding ailing currencies such as the GBP and the Euro.
Overall, however, Trump’s insular focus will destabilise the global economy and have a negative impact on worldwide trade volumes, and this is never likely to be good news for retailers. For countries like Singapore, there is little to do but focus on optimising the trade agreements that are in place with their global partners, while also leveraging domestic retail growth across all sectors.
Questions & Answers
Q.How has the 'America First' approach already impacted the retail sector in specific countries?
How has the 'America First' approach already impacted the retail sector in specific countries?
The Mexican retail sector is struggling due to plans for a border wall and hiked import taxes. Cath Kidston, for example, is thought to have shelved plans to expand into Mexico.
Q.What effect did President Trump's withdrawal from the Trans-Pacific Partnership have on Singapore?
What effect did President Trump's withdrawal from the Trans-Pacific Partnership have on Singapore?
Singapore's export market to the U.S. Is likely to shrink, potentially impacting its 2017 GDP. This reversed expectations of incremental growth under the TPP agreement.
Q.Are there any potential positive outcomes for the retail sector from Trump's approach?
Are there any potential positive outcomes for the retail sector from Trump's approach?
The President's desire for competitive U.S. Exports has caused the USD to waiver, driving market competition. This could aid struggling currencies like the GBP and the Euro.
Q.What advice is given to countries like Singapore in response to these global retail challenges?
What advice is given to countries like Singapore in response to these global retail challenges?
Countries like Singapore should focus on optimising existing trade agreements with global partners. They also need to use domestic retail growth across all sectors.
Reader pulse
How concerned are you about Trump's policies?
23,587 votes so far