In case you hadn’t noticed, U.S. President Donald Trump has elected for an ‘American First’ approach that will favour national brands, citizens and spending priorities. Now while there is nothing necessarily wrong with this, the tone adopted by the President has been divisive in the extreme while causing racial tensions to rise nationwide.
Trump’s insular outlook is also bad news for globalisation, with the environment already suffering amid the President’s attempts to slash climate change. Make no mistake; the global economy may be about to follow suit, however, particularly interconnected entities such as the retail sector.
How Will Trump Impact on Retail and Lucrative Markets Such as Singapore?
When Trump outlined his philosophy and planned spending during a recent address to the nation, he did not specifically touch on retail as an independent entity. He has already maligned global retail partners during his brief tenure as President, however, with the Mexican sector struggling as a result of the President’s controversial objective to build a border wall and hike import taxes. In fact, firms such as Cath Kidston are already thought to have shelved plans to expand into Mexico, restricting both American companies and the global sector as a whole.
The negative impact of Trump’s presidency on the retail market is unlikely to end here, however, with Singapore also facing potential issues. Historically, Singapore exported goods in excess of $100 million per annum to the U.S., with retail favourites such as chocolate, cocoa and snack products dominant. This number had been expected to rise incrementally under the terms of the Trans-Pacific Partnership (TPP), until President Trump withdrew the U.S. from the ongoing agreement as part of his desire to increase the number of American jobs available to citizens.
The full affects of this move and its impact on Singapore’s trade relationship with the U.S. have yet to be seen, of course, but the nation’s export market is likely to shrink and have a negative impact on GDP for 2017. This news has dampened the enthusiasm that surrounded positive domestic figures in the region, with total retail sales in Singapore rising by 2.0% at the beginning of January and supermarket transactions increasing by as much as 13.0% during the same period.
The Last Word: Worrying Times for the Global Retail Sector
In some respects, Trumps approach may yet create a more competitive retail sector that benefits the customers. The President’s desire to create competitive U.S. exports have already caused the value of the USD to waiver in recent times, which in turn will drive market competition while aiding ailing currencies such as the GBP and the Euro.
Overall, however, Trump’s insular focus will destabilise the global economy and have a negative impact on worldwide trade volumes, and this is never likely to be good news for retailers. For countries like Singapore, there is little to do but focus on optimising the trade agreements that are in place with their global partners, while also leveraging domestic retail growth across all sectors.