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AAII Readers See Negative Impact of Trump Presidency on Global Economy

A little over a week ago President Trump signed an executive order to keep refugees from entering the country for 120 days and immigrants from seven predominantly Muslim nations out for three months. The countries affected are Iran, Iraq, Syria, Sudan, Libya, Yemen and Somalia. While the public backlash was swift and vocal, Trump’s order also sent shock waves through the business world community, especially the tech industry. Apple CEO Tim Cook denounced the executive order and promised to help employees affected by it, adding that without immigration “Apple would not exist.” Google warned employees with a visa or green card from one of the banned countries to cancel any travel plans. Facebook’s Mark Zuckerberg stressed the need for the U.S. to keep its citizens safe, but should focus on “people who actually pose a threat.” Since the executive order was signed, legal challenges have been filed and multiple courts have ordered the suspension of the ban. A federal appeals court has denied the U.S. government’s emergency request to resume the travel ban.

Given all the publicity surrounding this order, and the public condemnation of it by so many corporate leaders, we wanted to understand how our readers think this travel ban will impact U.S. companies.

AAII Weekly Survey Question

Specifically, we asked:

How significant of an impact do you think President Trump’s executive order restricting travel to the U.S. will have on U.S. multinational corporations?

Here are the results as of 6 a.m. (Central) on February 5, 2017:

Out of the 2,592 readers who responded, over half–56%–feel that the travel ban will have some negative impact on U.S. multinationals, including 18% who believe it will have a significant negative impact. A little over a third–34%–of respondents feel that the travel ban will have no impact on U.S. multinationals. Six percent of respondents feel that the travel ban will have a positive impact on U.S. multinationals while four percent as unsure of the impact.

Weekly Special Question

In the wake of the announced travel ban, shares of companies in multiple industries fell, including the airline and technology industries. This highlighted the impact that government action can have on the companies. So, as a follow-up question last week, we asked our readers the following:

How might the global economy change under the Trump administration?

In all, 265 readers provided responses and the majority of statements indicated they feel that the Trump presidency will be a negative for the global economy. In all, 66% of the responses and 80% of all respondents mentioned some negative impact on the global economy as a result of the Trump presidency. The responses ranged from higher tariffs and trade wars to isolationism and protectionism to a global recession.

The biggest singular results most-cited by our readers were a trade war or higher tariffs, as countries engage in a tit-for-tat implementation of tariffs and trade barriers. Close behind was the fear of increased isolationism or protectionism that would ultimately hinder global trade and make goods more expensive for consumers. The third-highest vote getter in the “negative impact” column was a recession either here at home or globally.

On the flip-side, 15% of our readers feel that the Trump presidency will have a positive impact on the global economy. Among these respondents, the most-cited reasons include more favorable trade agreements, less regulation and more favorable corporate tax rates.

There are also 5% of readers who said that it is too early to tell how the Trump presidency will impact global trade.

Here is a sampling of the responses:

  • “‘Might….may…..maybe’ … Time will tell the story of the Trump administration. “Might” will not!!!! The global economy is a stew that has to cook longer and be watched.”
  • “A time of great uncertainty leading to instability and fear.”
  • “Across the world, nationalism is taking hold. People are tired of the geopolitical elite telling them what to do.””Allow overseas profits from U.S. firms to be brought back to the U.S. at a low tax rate.”
  • “Don’t think anyone really knows! Including Trump administration!”
  • “I think it will promote protectionism and will have a negative impact on the global economy.”
  • “[The] U.S. will lose status and its influence … U.S. isolationism will deprive it of its growth potential.”
  • “I think he will create more jobs, which will stimulate the economy. Reduce taxes, along with the jobs will actually produce more revenue. Cut the cost of government and reduce our national debt.”
  • “There will be more economic growth with slightly higher inflation.”
  • “More balanced trade. China and Japan will have to be more accommodating to the US and open their markets or lose out of selling to US consumers.”

Everybody has an opinion! Why not give us yours? Participate in our weekly member poll, updated every Monday, and see the results online at http://www.aaii.com/memberquestion.

 

3 thoughts on “AAII Readers See Negative Impact of Trump Presidency on Global Economy”

  1. Why all of this commentary on President Trump? I don’t recall this negative approach to President Obama who actually did more to harm this country than any other president. I subscribe to this for investing information not for your political views hidden in the framework of investing. If this continues I won’t be a member for long.

     
  2. Trump has been a positive for investments as it is about time that we have an administration that is business friendly. I am all for compassion but there is no cure for personal stupidity.
    President Obama has done more to hold this country back than any president since our founding. He has encouraged divisive politics dividing our nation and weakening our security police and military.

     

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