Page 69 - Bloomberg Businessweek - November 19, 2018

Bloomberg Businessweek The Year Ahead 2019 Global Economics
Trade

▷ Trump’s attacks on the world trade order won’t bring globalization to a halt

Among those who favor free trade industrial might. None would exist even for Trump. Yes, in one of his first
and footloose capital, the lament without the human instinct to trade acts as president he yanked the U.S.
often heard these days is that we are and travel, or to seek out a bargain. out of the 12- country Trans-Pacific
confronting the end of an era of ever- In 2018 global trade grew more Partnership. Then he launched a poten-
greater economic integration. Yet slowly—but grow it did. World Trade tially destructive trade war with China.
the most surprising lesson of 2018 Organization economists estimate the But instead of ditching Nafta, as many
may be how resilient globalization volume of goods flowing around the feared he might, his administration
14
has proved to be, even in the face of world climbed a healthy 4 percent. A negotiated with Canada and Mexico to
Donald Trump’s “America First” poli- darker picture looms in 2019, and fears revamp the 14-year-old trade pact. It’s
cies. Will that hold true in 2019? of the impact of rising protectionism also laid the groundwork for new deals
The first point to remember is that on global growth are top of mind for with the European Union and Japan.
globalization is more of an enduring companies, economists, and investors. If anything, Trump’s zero-sum
force than an easily discarded ideol- But the reality is that even as pro- approach to trade has kicked off a
ogy. It’s a phenomenon that’s been tectionist sentiments have resurfaced, competition among nations to shape
with us for millennia. The spread of governments have continued to nego- the future of globalization. Here are
Christianity is as much a product of tiate the sorts of deals that grease the four major things to watch for in 2019.
globalization as the iPhone or China’s wheels of globalization. That’s true �Shawn Donnan

▷ Four forces reshaping global supply chains

① TRUMP’S TARIFF WALL and the two sides have erection of what former global supply chains.
a lot to lose if they don’t Treasury Secretary Hank That doesn’t mean it
The biggest threat to the strike one. Hopes have Paulson has dubbed a new would be impossible. Or
world economy in the year been raised by Trump’s “Economic Iron Curtain.” that Trump—and other
ahead is an escalation scheduled meeting with Xi Author John Pomfret, world leaders—shouldn’t
of the U.S.-China trade Jinping at the Group of 20 whose The Beautiful contemplate what would PHOTOGRAPH BY PIPPA DRUMMOND FOR BLOOMBERG BUSINESSWEEK; PROP STYLIST: AJA COON
war. There’s a very real conclave in Buenos Aires Country and the Middle undoubtedly be a painful
possibility that by the end on Nov. 30-Dec. 1. Kingdom documents process. “Everyone
of 2019 all commerce But there are plenty 240 years of economic can say: ‘You can’t stop
between the world’s two of China hawks in engagement between the globalization. You’re
largest economies will be Washington who want U.S. and China, says any destroying your own
subject to new tariffs. to see a long-term decoupling will be difficult economy,’ ” Pomfret says.
Trump has always left “decoupling” of the given how integrated “On the other hand, China
the door open to a deal, two economies or the China has become in has been really parasitic.