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Strategic Alliances: High Profile Alliances such as leading trade partners and OPEC , NATO and understated ones such as the African Union

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Why is it important?

Strategic Alliances: The African Union The Trump Administration not only crowned the first year of its anniversary with record highs on Wall Street but may also have created irreparable damage and shifts in strategic alliances with one of its most trusted and loyal allies – the very much understated African Union. On the 12th January 2018, a week which is set to precede and commemorate the annual Martin Luther King Day celebrations, the United States President is alleged to have made insulting remarks about several nations – with references to such allies as “ shit hole” nations. The President is known to be vocal about his opinions – a characteristic which to a considerable extent, earned him admiration, the position and key to the White House – demonstrating to many supporters during the race to the White House, his reflection of their beliefs and frustrations (which many politicians would not even dare to make publicly known). Even though remarks relating to immigrants, the Mexican border still prove controversial, and even though he escaped the judgment and repercussions that could have been expected during the US Presidential elections, could the President have scored an irreparable “own goal” as a result of the degrading comments made in respect to those nations referred to on the 12th January 2018? The extent of the United States’ growing isolation from the rest of the globe was made all the more evident on the same day when reactions to the President’s decision to decline an invitation to London in February 2018, were made public – as expressed through many Londoners – as well as Europeans. Whilst it is hoped that a state visit in the UK will eventually occur – as well as an extension of an invitation to the Royal wedding, other issues relating to the Paris Global Climate Summit, Iran sanctions, the recent acknowledgement of Jerusalem as the capital city of Israel, are matters which have not gone down too well with the global community. Perhaps the United States will find greater solace with its competitors – China and Russia – who ironically, the African Union is increasingly engaging with. Meanwhile, having recently withdrawn also from the Trans Pacific Partnership, the future of the North American Free Trade Area (NAFTA) Agreement also hangs in balance. Only time will tell whether the widely respected and renowned brands of Coca Cola, CNN – and even its highly respected film industry, will continue to be patronized on the same scale as previously – following the revelations made on the 12th January 2018.

Perspectives

The tariff hikes appear to be taking their intended effects – probably discouraging domestic producers from relying on assembly chains in China and relocating these to jurisdictions not impacted by the imposed tariff hikes. However, it appears that some measures are being relaxed given the potentially short term devastating effects for domestic producers – who eventually may have to pass greater proportion of costs to consumers. This is reflected by the current decision to withhold/delay some tariff hikes, a so called “Tactical Tariff Retreat” such that consumer spending is not impacted around Christmas the period.

Prof Marianne Ojo
Northwestern University

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This page is a summary of: The Impact of Incoming US Administration on Global Trade Relations, IGI Global,
DOI: 10.4018/978-1-5225-4131-8.ch002.
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