Trump and the Move to Penalize US Firms That Engage in Outsourcing!

[] Is President Donald Trump gearing towards delivering on his threat to penalize American firms that outsource jobs outside of the U.S. mainland?

Capital Economics, a UK based economic research firm, released a brief entitled “Winners and Losers from the Trade War,” where it is suggested that the growing trade war between the U.S. and China may emerge as a “major threat” to emerging economies in Asia.

Quote from “Winners and Losers from the Trade War”

“The trade war between the U.S. and China so far appears to have had a small negative impact on most of the region, although some countries, most notably Vietnam, look to be benefiting as U.S. demand has shifted away from China towards alternative suppliers… (In the event of a global trade war) A number of the region’s economies would be tipped into recession, while no part of Emerging Asia would escape unscathed.”

What About the Philippines?

According to Capital Economics, the Philippines has a thriving services sector to which American firms are major players.

Quote from “Winners and Losers from the Trade War”

“The Philippines would be the biggest loser if Trump followed through on his threat to punish American companies that outsource jobs abroad… The Philippines has a thriving business process and IT outsourcing sector, which last year brought in revenues equivalent to around 10 percent of its GDP.”

The London based research firm furthered that the effect of a prolonged China-US trade war would be more damaging to economies that primarily engage in the trade of physical goods, but, the consequences for economies with a strong service sector (i.e. The Philippines) is economic stagnation due to the re-imposition of trade barriers.

Quote from “Winners and Losers from the Trade War”

“The long-run consequences would be even bigger if the world also maintained barriers to trade in services and information, to foreign direct investment, and to migration. In this case, there may be a much bigger global downturn, or indeed a long period of stagnation.”

Fuck Free Trade

The US has placed higher tariffs on Chinese goods, which has started to negatively impact the exports of neighboring Asian countries to China. This is phase one of Trumps plan, will phase two target outsourced services next?