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After Obama, what is the future of U.S. business and trade?

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Edward Ashbee, Copenhagen Business School, speaks on postelection trade and economic policies.

The 2016 U.S. presidential election was historic. The Democratic candidate, Hillary Clinton, was the first woman nominee of a major party. The controversial Republican Donald Trump drove some leading party figures to declare they would not vote for him. Both were unusually unpopular. In mid-October, Associate Professor of Business and Politics Edward Ashbee, Copenhagen Business School, reflected on the election.

Trump v. Clinton

“Clinton is the continuity candidate,” Ashbee says. She is a center-right, career politician with domestic and international experience as a New York state senator and U.S. Secretary of State. She’s expected to largely follow President Obama’s policies and face similar challenges.

“Large-scale, landmark presidential accomplishments are shaped by what can get through Congress,” Ashbee says. President Obama was hindered by a Congress controlled by the opposing party and a President Clinton will have the same barrier. Her solutions will also be the same: Explore options for unilateral presidential action. “A curious thing about American politics,” Ashbee says, “is how much latitude presidents have.” On trade, for example, they have executive and regulatory powers to impose tariffs, negotiate agreements, and take retaliatory action.

Candidates in the left-leaning Democratic party “generally make antitrade noises early in the election,” Ashbee says, and Clinton was no exception throughout the campaign season. She originally supported the 12-country Trans-Pacific Partnership agreement that is waiting for Congressional ratification, but campaigned against it because of an antiglobal U.S. political mood. Nonetheless, Ashbee expects a President Clinton to “do a 180” on the agreement at some point and generally be trade friendly.

Ashbee says that business organizations acknowledge that the U.S. economy is improving after the 2008 Great Recession, in part because of Obama’s stimulus efforts. At the same time, they say that U.S. environmental and other regulations are anticompetitive. These White House policies and their corresponding business responses are likely to continue in a Clinton administration.

A President Trump would be expected to have both executive power and legislative support from a Republican-led Congress. However, because U.S. political parties are “looser and more diffuse” than European parties, Ashbee says, Trump became the Republican nominee without adhering to party policies. Republicans traditionally are for free trade, but Trump is outspokenly protectionist, for example proposing 45% tariffs on Chinese imports. That made the policies of a Trump administration difficult to predict.

The post-Obama world

Ashbee writes about economic policymaking. He co-edited an essay collection, “The Obama Presidency and the Politics of Change, released this month. His big-picture analysis of the future of U.S. business and politics includes these points:

Any U.S. president will confront increasing demands on the federal budget. The U.S. is paying down its government debt through mechanisms imposed after the Great Recession. But like other Western countries, the U.S. population is aging, which means more people will need government services. In addition, basic repairs of roads, bridges, and airports are decades overdue. Regardless of the administration, Ashbee says, the president and Congress will eventually need to deal with these issues by raising taxes or reducing and reorganizing spending.

European politicians won’t copy Trump’s style. Trump has gained international attention for hard rhetoric against immigrants that even people in his party call racist. Although some European parties talk in similar terms, says Ashbee. “The Trump style is so far from European political discourse,” he says, “that even anti-immigrant politicians recoil. If Clinton is elected, expect a collective sigh of relief across Europe, from the far left to the far right.”

 

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