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

US Senate Committee Approves TPA Bill

The U.S. Senate Finance Committee has approved the Trade Promotion Authority (TPA) bill which gives the White House “fast track” authority to streamline the passage of international trade deals through Congress. It was approved on a 20 to 6 vote. If passed by the full Senate and the House in the coming weeks, the bill would require Congress rather than amending trade deals, by changing details to vote either up or down only. Such a bill is vital to finalizing the Trans-Pacific Partnership (TPP) deal between the U.S., Canada, and 10 countries in the Asia-Pacific region.

In addition to the TPA bill, the committee also approved three other bills “to bring new transparency, enforcement, and labor protections to trade agreements.” This includes provisions to beef up rules against countries found to be manipulating their currencies.

U.S. President Barack Obama has made the TPP a major focus of his efforts to boost U.S. economic investment in Asia. Many Democrats and labor union fear that it would not benefit the nation.

New trade agreements and partnerships with Asia and Europe, such as the Trade Promotion Authority, the TPP and the Transatlantic Trade and Investment Partnership (TTIP) are useful. But there needs to be stronger domestic support for these agreements so they can kick start the U.S. contribution to the global economy.

Source: http://www.ibtimes.com/us-senate-finance-committee-approves-trade-bill-key-finalizing-trans-pacific-1893420

Related articles on TPP:
• It’s not double or nothing for trade
• Trade opportunities beyond the Americas

The U.S.-Korea Trade Agreement: One year later

Acting U.S. Trade Representative Demetrios Marantis marked the first anniversary of the U.S. – Korea Trade Agreement. Within this year, U.S. exports of transportation vehicles increased significantly, achieving a 48% rise.

The Office of the USTR expects that by 2016, 95% of U.S. exports to Korea will be completely duty free. Ambassador Marantis said, “One year in, I am pleased to see that the U.S. – Korea Trade Agreement is already producing promising results for U.S. businesses and workers in America’s factories, farms, and firms. As both of our economies improve, we look forward to seeing America’s growing exports to Korea support even more jobs here at home.”