Home / Knowledge / News / Textiles / Shift in US policies could affect trade and FDI: Moody's
Shift in US policies could affect trade and FDI: Moody's
17
Nov '16
US president-elect Donald Trump's campaign proposals indicate that there could be a shift in policies of the world's largest economy once he assumes office. Any shift in US' international orientation, at a time when global trade is muted, could challenge output growth and potentially constrain policy space for trade-reliant and FDI-supported countries.

In addition, a tightening of immigration rules in the US -- as proposed by Trump during the election campaign -- would over time dampen growth in remittances from foreign workers, which are significant for some economies in Latin America and Asia Pacific, Moody's Investors Service noted in latest report 'Sovereign Monitor -- Focus on the Pacific Rim'.

While Moody's expects trade agreements that have already been implemented to remain in place following the change of presidency in the US, policies going forward could incentivise onshoring -- the repatriation of jobs at overseas-based suppliers back to the US -- and a focus on domestic production and sourcing. In such a scenario, Costa Rica and Mexico would be most vulnerable as these countries are most reliant on exports of high value-added goods and services.

Meanwhile, India and the Philippines could also suffer in the event of policies that disincentivise foreign sourcing of business services.

If demand from the US, the largest importer globally, were to slow markedly and durably as a result of a shift in government policies, international and intraregional trade would amplify the economic impact. The most open economies would be particularly vulnerable. However, Moody's considers the probability of this scenario to be very low.

Over a longer period, a more insular climate in the US could also crimp FDI outflows. FDI from various countries finances a large proportion of the current account deficits among Latin American sovereigns, helping to reduce the region's dependence on more volatile portfolio inflows.

Moody's notes that worker remittances also provide a stable source of foreign-currency earnings that support current accounts, and underpin consumption and domestic economic activity. For sovereigns with wider current account deficits and thinner foreign reserves, or where growth is subdued, a slowdown in remittances would exacerbate such challenges. (RKS)

Fibre2Fashion News Desk – India


Interviews View All

Manfred Mentges, Sedo Treepoint GmbH

Manfred Mentges
Sedo Treepoint GmbH

We see a higher demand in colour management systems, as customers see big...

Viral Desai, Zenitex Mill Pvt Ltd

Viral Desai
Zenitex Mill Pvt Ltd

Full of green energy

Top executives, Textile industry

Top executives
Textile industry

GST has levelled the playing field to an extent

Sham Shah,

Sham Shah

Shamal and Shamal Pvt Ltd is into manufacturing and sales of textile...

Iacopo Pardini,

Iacopo Pardini

Founded in 1953, Italian engineering company Arioli Spa started...

Spring Chang,

Spring Chang

A specialist in manufacturing printing machines, <b>Wenzhou Changs</b>...

Wolfgang Plasser, Lenzing AG

Wolfgang Plasser
Lenzing AG

The Lenzing Group is an international company headquartered in Austria...

Marcel Alberts, Eurofibers

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Andreas Lukas, Andritz Nonwoven

Andreas Lukas
Andritz Nonwoven

With forces in engineering and process development, Andritz Nonwoven...

Sidharth Sinha, Sidharth Sinha

Sidharth Sinha
Sidharth Sinha

<b>Sidharth Sinha</b> has contributed to the successful rebirth and...

Igor Chapurin, Chapurin

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Bani Batra,

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


November 2019

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

Follow us on instagram

Follow

Follow Fibre2Fashion On


Advanced Search