Free Trade

The Beginning of the End for Globalization

  • Why it matters

    Why it matters

    Globalization is seen as a major problem, and a reason behind various populist votes and nationalistic policies.

  • Facts

    Facts

    • According to researchers, the global economy is expected to grow by 3.25 percent in 2017.
    • But trade is only expected to increase by 1.75 percent.
    • The global economy is threatened by the gap between debt-driven growth and the search for new and sustainable economic expansion.
  • Audio

    Audio

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Donald Trump
President-elect Donald Trump at a rally of supporters in North Carolina, one of the states affected by globalization. Source: AP

The best hope for the global economy in 2017 also happens to be its biggest threat: Donald Trump. This apparent contradiction is reflected in the disparate reactions to the celebrity real-estate investor’s election victory.

The financial markets love Mr. Trump. Since he became the U.S. president-elect in November, the Dow Jones stock index has risen by 9 percent, creating $260 billion (€245.6 billion) in wealth on the stock exchange.

“If Trump follows through on his promises for massive tax cuts and infrastructure investment, it would provide a large, temporary boost for the U.S. economy,” said Clemens Fuest, head of the German economic research institute Ifo.

This kind of stimulation, so the optimistic theory goes, could have a positive effect on Europe and the rest of the global economy. After all, the United States is still the planet’s biggest economic powerhouse, and both Europe’s and China’s most important export market.

But at the same time, leading economists around the world are warning against the enormous risks a Trump presidency could pose for the global economy.

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