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

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

Country Overview: Slovenia

Slovenia became the first 2004 European Union entrant to adopt the euro (on 1 January 2007) and has experienced one of the most stable political and economic transitions in Central and Southeastern Europe. With the highest per capita GDP in Central Europe, Slovenia has excellent infrastructure, a well-educated work force, and a strategic location between the Balkans and Western Europe. Privatization has lagged since 2002, and the economy has one of highest levels of state control in the EU. Structural reforms to improve the business environment have allowed for somewhat greater foreign participation in Slovenia’s economy and helped to lower unemployment. In March 2004, Slovenia became the first transition country to graduate from borrower status to donor partner at the World Bank. In 2007, Slovenia was invited to begin the process for joining the OECD; it became a member in 2012. Despite its economic success, foreign direct investment (FDI) in Slovenia has lagged behind the region average, and taxes remain relatively high. Furthermore, the labor market is often seen as inflexible, and legacy industries are losing sales to more competitive firms in China, India, and elsewhere. In 2009, the global recession caused the economy to contract – through falling exports and industrial production – by 8%, and unemployment to rise. Although growth resumed in 2010, it dipped into negative territory in 2012 and the unemployment rate continued to rise, exceeding 12% in 2012.

Read more here and leave us your opinion in the comments.