After a meeting with big business executives on border tax penalties for companies producing goods outside of the United States (source), Trump signs executive order for the United States to the leave the TransPacific Partnership (TPP) (source).
What’s happening with the early morning meeting?
- Big businesses (e.g., Ford, Lockheed-Martin, Under Armour Inc. etc) met with President Trump at a breakfast meeting
- Trump lament businesses that moves manufacturing jobs outside of the U.S. and then sells back in the U.S.
- Incentives for those who stay
- Tax penalties for those who relocate outside of U.S.
- President Trump also wants to roll back regulations on businesses including environmental ones
What’s happening with the TPP?
- The TransPacific Partnership includes 12 countries (US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru) that aims to slash tariffs and foster trade between these economies (combined, this covers 40% of the world economy) with a single new market (source)
- President Trump signs executive order not to ratify TPP and for the U.S. to pull out of the deal
President Trump will meet with Mexico and Canada later to renegotiate on the North American Free Trade Agreement (NAFTA).
So far, we are heading into protectionist/isolationist territory rather than a full member of the global economy. The United States may very well benefit from having more control over its dealing with foreign trade and businesses but that may also lead to greater chaos in the international business realm. Only time will tell whether this chaos will start with the renegotiation of NAFTA, U.S. exit from TPP, and taxes/tariffs on manufacturing businesses leaving the U.S.