Expectation Surrounds the Incoming Administration
Since 1937, the presidential inauguration of the United States has taken place on January 20 and this year is no exception. As President Trump takes his oath of office today, a great deal of expectation builds up worldwide around what is to come during 2017. The Stock Market has performed favorably over the last couple of months and major manufacturers have decided against the offshoring of operations in favor of staying in the US. This article explores the political and economic scenario into which President Trump is taking office.
Expectation Surrounds the Incoming Administration
A policy that is expected to be a central part of the Trump presidency is economic and commercial protectionism that emphasizes domestic manufacturing as well as fair trade over free trade. President Trump has already announced that he will formally start with the bulk of his policy implementation work on Monday, January 23, by issuing executive orders. Given the current political scenario in Washington, DC and the fact that the Senate has not yet confirmed any of President Trump’s cabinet picks, it is likely that there will be some delays in regards to the implementation of certain policy decisions. Nevertheless, international actors like the European Union and the nations from the Pacific Rim have already concluded that projects such as the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) will not materialize.
Earlier this week President Trump made public one his last cabinet nominations, that of Secretary of Agriculture. For this position, President Trump nominated the former Republican Governor of Georgia, George Perdue, who served from 2003 to 2011. Mr. Perdue is a lifelong businessman within the agriculture industry, particularly the grain and fertilizers sector. During his tenure as governor, Mr. Perdue imposed severe water usage controls to deal with one of the worst droughts of the Georgia’s history.
The vision that unites both President Trump and Mr. Perdue is that of protecting and enlarging the domestic agriculture industry in order to achieve food independence as well as increase exports. Given Mr. Perdue’s background, there should be no major policy changes regarding the use of genetically modified crops and chemical inputs in US agriculture. Furthermore, Mr. Perdue’s nomination is not without controversy, particularly from progressives and green activists, given the fact that companies currently or formerly held by the nominee received significant amounts of federal funding to promote the use of chemical inputs in agricultural production.
Nevertheless, Mr. Perdue as well as most of President Trump’s cabinet picks should be confirmed next week allowing the incoming administration to work on formulating and implementing policy. Finally, the Foreign Exchange market will play a key role in determining the success of President Trump’s policies. A strong US Dollar (USD) will limit the amount of US exports towards international markets, while a weak USD could hurt domestic consumers. Throughout the last several months, the USD has remained relatively steady in the Foreign Exchange and gained some strength against several currencies, such as the Mexican Peso.
(Read more about Economics and the Next Administration of the United States)