Christian Manrique’s new post
As July comes into an end, in the heat of the summer in the Northern hemisphere, this is Christian Manrique’s last analysis in English on the “Putin and Trump’s World” series of articles. Trump’s Administration has been running for six months and Donald Trump still carries on with his attitude. Yesterday, July 26, he announced that Transgender People will not be allowed in the Military. We will have to wait to find out if his policy works and leads him towards a second Presidential Term or if he leaves Office.
(Although this is a time for holydays, the blog will maintain its regular activity, offering different points of view on a wide range of subjects, always focused on economy, connectivity, technology and social changes, as usual. Christian Manrique’s way).
Trump’s Administration management analysis and business opportunities
A month after Donald Trump took power in January, initial perceptions were highly polarized and were more negative than positive. Last national poll by Pew Research Center, in February, concluded that Trump’s job approval was lower than previous presidents in that same period. Only 39% approved his job.
As Christian Manrique states, this high disapproval rate is higher than Barack Obama’s high disapproval rate at any time during his eight years presidency. The only time in which George W. Bush highly disapproval was higher than Trump’s was in December 2008 right at the end of his Administration.
Despite Russia’s economic situation, President Putin was still getting a high rate of public support (at the time this article was originally written in Spanish), going up to 86,8%, as VTSIOM (Russian Center for Public Opinion Research) points out. As VTSIOM underlines, 57% of Russians would re-elect Putin by 2018. Notwithstanding, Russia is seen in a complete opposite way from the international point of view.
Therefore, Russia should have taken care of its relationships with its main trade partners in order to be perceived not as a threat, but as a positive partner.
Trump’s protectionist policy had from the beginning two different outcomes. In the United Sates stock markets raised up due to his promises about re-industrialization and cutting down on taxes and Administrative obstacles. On the other hand, in other countries his policies were seen as a threat on tariff raises, specially from Mexico and China (he tried to set up a deal, a bilateral agreement, with Germany) and this could lead towards a trade war affecting trade transactions.
As Chrisitan Manrique underlines, Trump’s Administration took advantage of a very well spread believe all over the United States that NAFTA and China were responsible for USA losing thousands of jobs to impose its nationalistic policy and force multinational enterprises to invest in the country to boost employment. He did it with Ford, General Motors and Toyota. Unfortunately, what he has not told his fellow American consumers is that prices will rise. Besides, automatization is possibly dealing with all those activities that are being done outside the US and that not even Americans want to do. Russia, at that that time, bought a set of Boeing aircrafts and never claimed that those planes had to be bought within its boundaries or threatened the American company with high tariffs.
Taking unemployment rate in the US into account, it’s has been going down for the last years.
But another factor has to be taken into consideration. As baby boomers will retire, potential manpower will decrease and immigrants will play a key role on future population growth. This will mean that there will be more adults in the USA born from immigrant parents, rising up to 24.6 million by 2035 before 11.1 million in 2015. Current USA policies on this area do not allow immigration flows, but the USA Administration will have to face this reality in a few years.
As Christian Manrique pointed out previously, American protectionism and tariffs increase will diminish global economic growth, affecting all economies, including Russia’s. This could open an opportunity in Russia for American companies within power and energy development within Russian Arctic. Oil fares depend in many more factors than twenty years ago. Therefore, the turning point is that American producers have improve productivity and the barrel at 50 UDS is already profitable for them.
In a global economic deceleration scenario, there is a series of international items that could lead towards global uncertainty and instability, opening a window of hope for Russia.
Economic protectionist policies implemented by the USA, rising of populism and Brexit are factors that can set a path. Therefore, a new global political and economic order could arise, not without risks. As Christian Manrique warns, this situation could increase economic deceleration. Within this context Russia could recover and retake some world influence with China playing a key role.