Editorial: One Election, Many Consequences

For the finance world, 2017 opens with more questions than answers.

DECEMBER 2016 | VOL. 30 NO. 11

To those who thought the Brexit vote in the UK would be the biggest surprise of 2016, the American voters have sent an even bigger shock. The election of

Donald Trump as president of the United States is a turning point; it takes us into unknown territory.

As we write this letter, most of the new president’s cabinet has not yet been named. It is impossible to know how many of Trump’s campaign promises will become reality in the next few years. Will there be a return of some forms of protectionism? Are we going to see the dissolution of trade treaties? Should we expect new and unusual international alliances? The list goes on and on, and includes serious geopolitical as well as domestic issues.

The global role of the United States for the past 70 years and its current relevance force all governments and their institutions, together with many private companies and citizens, to keep an eye on the new American reality.

We simply do not have answers yet.

Although uncertainty is high, it is a pretty sure bet that there will be major policy differences from the eight years of Barack Obama’s presidency. The signs are already there. Ludovic Subran, group chief economist at trade credit insurer Euler Hermes, reminded us recently that while global trade is up in total volume over the past two years, it has contracted in value, and regardless “will not go back to the 14% annual growth of a while ago,” due to incipient protectionism and trade wars.

We decided to dedicate a cover story to the future of globalization well before the American elections. The results validate our decision and the relevance of this discussion. It will take a while to understand the severity of the threat to globalization, but there is no doubt that roadblocks already in place present a serious challenge.

Andrea Fiano | Editor