Trade Policy and International Marketing Under Reagan and Trump: An Abstract

Featured

The following is an abstract of a new piece I have been working on with my colleague Professor Gary Knight. I hope you enjoy it and please feel free to leave your comments below.

Michael Czinkota, Georgetown University, Washington, DC, USA, czinkotm@georgetown.edu
Gary Knight*, Willamette University, Salem, OR, USA, gknight@willamette.edu

                                                                  ABSTRACT

We investigate the international marketing implications of the international trade policies of US Presidents Ronald Reagan (‘Reagan’) and Donald Trump (‘Trump’). Today, in international trade, tariffs are low, averaging about 3% in the advanced economies and 10%-15% in the emerging markets. The average tariff across all goods worldwide is about 6%, down from 18% in 1990.  Meanwhile, world trade has increased consistently. China is now the most important trading partner of the US, providing both a huge market and supplying a great variety of products.


In the 1970s, a goods trade deficit emerged in the US and persists to the present day. In our research, we found that the administrations of both presidents sought to reduce the US trade deficit, and defend and enhance the international marketing performance of US firms.  In the early phase of his administration, trade policy under Reagan was restrained but became more assertive. Reagan focused on the trade deficit with Japan and on enhancing international market opportunities for US firms. But Reagan’s policies fell short of their goals. Today, the US faces a much larger trade deficit, primarily with China. Trump adopted policy goals similar to those of Reagan. Trump’s approach has been more assertive. Like Reagan, however, Trump’s policies have fallen short of achieving the intended goals.

In this paper, we provided empirical background and discussed the policies and outcomes of the policies of Reagan and Trump. We highlighted implications for firms’ international marketing efforts and performance, and as well as directions for future research.  We pointed to research opportunities for scholars. Research might investigate better, smarter trade policy, and examine benchmarking by reviewing various trade policy approaches, of the US and other nations, and then examining those successful in achieving intended goals.  Scholars might seek to identify appropriate strategies and tactics for enhancing the performance, of nations and of firms. 

Implications suggest that companies need to increase their competitive advantages in global trade. The US needs to increase its national competitive advantages by improving national factors of production and implementing smarter economic policies that promote US business. Public policymakers should emphasize investing in infrastructure, for example, in communications technologies that can increase the effectiveness of the management of firms’ value chain operations. Broadly, firm strategy and public policy should aim to improve performance on in the areas of entrepreneurship, innovation, and productivity, in order to make US companies more competitive in the global marketplace. An important research step will be the anticipated identification of trade policy shifts and the concurrent effects on business planning and policy development. Looking forward, the Biden administration will have to juggle its promise of bolstering domestic investment in infrastructure and US firms while also growing US importance within World Trade.

Keywords: International trade policy; International marketing; Tariffs; Protectionism; Public policy

References Available Upon Request

Together for more and better

Featured

Michael R. Czinkota

On a recent holiday, I had six teeth extracted. The insights I gathered during this process seemed relevant to current policy and election travails. My dentist’s office was closed, but he kindly came in to see me. Of course, his staff did not, since it was a holiday, but that did not worry me since I wanted my doctor’s skills, not those of his staff. After a lengthy procedure, my dentist gave me a pain prescription. Kind reader, please keep in mind – our local jurisdictions consist of the District of Columbia,  the Commonwealth of Virginia, and the State of Maryland. Each state has different pharmaceutical rules and laws, and political leadership. 

My dentist resides in Washington, D.C.; I live in Virginia but have to drive through Maryland to get home. My daughter kindly offered to pick me up from the appointment, and as my pain was growing, we stopped at a pharmacy to purchase the medication on the way home. But with little luck. “We don’t supply this medication,” we were told. Little matter, we drove to the next pharmacy a few miles away in Maryland, where my daughter trains to be an emergency medical technician. But since the prescription was in my name, and I am a Virginian, we again obtained no medication, but growing pain from my teeth.

Onwards then to Virginia. Yet here I was informed that the pain medication was a narcotic which in Virginia needed to be personally signed by the issuing doctor who, due to the holiday, had long ago left his office. Back to the car, with surging pain, we aimed for my home pharmacy where they know me. I always admonish my daughter to drive cautiously, but now I asked her to drive as fast as possible. It took 45 minutes, but finally, the home village came into sight.  About one kilometer before the town, we heard a horn behind us and saw a blue emergency light. It was a visiting state trooper who stopped us for driving at an excessive speed. I started to explain, but his gestures made me quickly recall the saying of ‘tell it to the judge’. Besides, I just wanted to get to the pharmacy.  

The trooper was quite meticulous, but 40 minutes later, we were on the road again. At the pharmacy,  we were immediately recognized and the prescription was, of course, filled right away. Apparently, word had gotten around regarding my earlier visits to other pharmacies since the pharmacist told me in confidence that ‘next time, just come here directly.’ The pills worked, and I thanked my daughter for her help, also promising to pay for all her expenses. In the end, the bills for speeding, lawyers, court cost, regular fees, speed measurement all added up to more than $ 1,300.

All this is truly not earth-shattering but of major impact nonetheless. Lack of collaboration may start out by discomforting life, but given time and repetition, can lead to growing social gaps.  America has, for more than one and a half centuries, principally drawn strength and a good life through success from its cohesiveness. Nevertheless, there have been shortcomings, apathies and neglect which require repair.

We must recognize and adjust our lives to cope with the growing complexity of the world today. Breaking up links and relationships is a bad idea. We continue to have an unsurpassed capacity for communication and analysis. We can find ways that allow for curative marketing or restitution for past or current wrongdoings. There clearly is room for improvement, be it for pain pills, jurisdiction, or treatment of people. Let’s take steps for the pursuit of happiness, which supports us all.– the Declaration of Independence has made a promise, but we as individuals need to deliver on it.

———————————

Professor Michael Czinkota (czinkotm@georgetown.edu) is emeritus faculty of international marketing and trade at Georgetown University. His forthcoming book is International Business, 9th edition.