The US President Donald Trump on his first full day in
office, signed an executive order removing the US from the Transpacific
Partnership (TPP). This was right thing from the economic point of view, but
from the strategic point it would be disadvantageous. TPP gave USA influence in
the Asia Pacific region. This can allow the major Asian Powers to fill the vacant
seat in the region. The many policies taken by US President Donald Trump under
his “America First” agenda will be a threat to the international free trade.
Malaysian open economy is 35th largest in
the world. But due to US’s protectionist policies in the recent years, such as
import tariffs and renegotiation of Free trade agreements, will cause it to be
undermined. This is because US is Malaysia’s one of the major trading partners.
The US coming out from the pro-free trade to becoming protectionist country
will cause the volatility to increase on the world level. This will cause the Malaysian
companies to suffer. As Malaysia is one of the largest supplier of electronic
items to US, the increased tariffs will cause the trade to suffer.
This protectionist stance of US will cause the
Asia-Pacific countries to focus on RCEP (Regional Comprehensive Economic
Partnership) which is more Asia Specific trade Treaty. This Treaty will cause
the consumption in the Asia-Pacific region to increase which will help the consumption
driven sectors such as Transport, Logistics, Healthcare, etc.
India’s one of the major IT company Infosys Ltd. Announced
that it will hire about 10,000 Americans in the period of two years. This statement
came after US government criticized the Indian Information technology companies
over its hiring. US president has signed an executive order to review the H-1B
visa programme. Indian IT companies earn their major bulk of their income from
the US market and are major beneficiaries of the visa programme.