There is a heightened risk on “trade protectionism” under the Trump administration. For several Asian economies, as well as Canada and Mexico with strong trade ties to the US, including the emerging markets, open borders and freetrade agreements are of paramount importance. But also, for the rest of the world, protectionism will have serious implications that will impact on the performance of their economies.
Overall, a surge of protectionist measures would not only undermine the recovery in global trade, it would also disrupt global supply chains and limit international factor movements, for both labour and capital. A protectionist backlash would not just have an adverse near-term cyclical impact, but also a negative long-term structural impact on potential growth.