The Presidency of Donald Trump has heard many promises and seen many actions in the first few months, but perhaps none bigger than bringing jobs back to the United States. The question the came to mind was what effect will this have on the global economy. There is no way to predict this with complete accuracy, but we can have an idea of what areas will benefit and what areas will suffer. There are many factors within this question, but the three I believe are very critical and talked about are how is President Trump going to bring jobs back to the U.S., are companies going to be on board, and is this realistic.
President Trump intends to cut taxes on businesses and renegotiate trade deals (mainly NAFTA). This is no secret Trump has been preaching this since the beginning of his run for Presidency. Taking us out of NAFTA was a big point, but would that alone really have a risk? Robert E. Scott of the Economic Policy Institute states that roughly 300,000 manufacturing jobs have displaced to Mexico from NAFTA. At first look I believed these numbers to be enough alone to justify the leaving of NAFTA. Apparently this number is not even.3% of our total jobs according to J. Bradford Delong, so even with such a high number of manufacturing jobs were being lost to Mexico this is such a minuscule percentage of our jobs. This alone is not going to have the difference I initially thought it would.
Trump's corporate tax cuts is an interesting idea, the idea is that the companies will reinvest the money from the tax cuts into the company itself to grow and create jobs. This plan puts a lot of trust that the money from the tax cuts will be used and reinvested, if the businesses don't react as planned it could have little to no effect on the economy and unemployment. There is also another view on this plan, A study by University of Pennsylvania's Wharton School and the Tax Policy Center says that "in the long-run the Trump tax plan increases federal debt more than current policy, resulting in less economic growth". This plan can have a positive effect in the beginning, but will create more federal debt and in the long run this plan may not be able to keep the benefits outweighing the negatives. I am not against the idea based on this information, but I believe that this plan needs to be planned out with this in mind and it must be flexible to adapt to different situation that may occur.
Companies such as GM and Hyundai are on board with trump and are bringing their manufacturing to the United States. According to Matthew Rocco GM says they "will move axle production from Mexico to Michigan, joining Hyundai in announcing billions of dollars in new U.S. manufacturing investments as President-elect Donald Trump turns up the heat on automakers", GM also stated that they will invest $1 billion in new vehicles, technology, and components, which will create more than 5000 jobs. With companies of this size investing and bringing manufacturing and jobs to the U.S. to keep U.S. companies improving the U.S. economy. The even more impressing one is foreign companies bringing work over to the U.S. as well. Mathew Rocco also brought up Hyundai announcing they "have allocated $3.1 billion for supporting their factories in Georgia and Alabama", which is up $1 billion from the previous 5 years. With initiatives like this from U.S. and foreign companies this is a great step for Trump's plan and the economy as a whole.
Is Trump's plan realistic and will the effect on the economy actually be substantial? Yes trump's plan is realistic, but this plan alone will not have a substantial effect on the economy with just these points alone. The plan is realistic and has already begun. Now will this solve the issues of unemployment and improve the economy, no but it is a start. I believe this plan is the right plan for right now, but needs improvement and the ability to adapt to stay effective. There are many other factors affecting the Economy, so these changes and plans are not going to take over the economy, but it's a start in the right direction. A great sign so far is the approval and cooperation of foreign companies to take advantage of Trump's plan and improve the U.S. economy. This starts in the U.S., but the effects will be felt globally and can improve the global economy as a whole.
Rocco, Matthew. "Trump Effect? GM, Hyundai Pour Money Into America." Fox Business. Fox Business, 17 Jan. 2017. Web.
Scott, Robert E. "Heading South." EPI Briefing Paper (n.d.): n. pag. Economic Policy Institute. 3 May 2011. Web.
DeLong, J. Bradford. "NAFTA and Other Trade Deals Have Not Gutted American Manufacturing - Period." Vox. Vox, 24 Jan. 2017. Web.
Nunns, Jim, Len Burman, Ben Page, Jeff Rohaly, and Joe Rosenberg. "An Analysis of Donald Trump's Revised Tax Plan." Tax Policy Center. N.p., 18 Oct. 2016. Web.
Article Source: Ezine
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