Jose Luis Rojas: “Trump’s victory could slow the way out of the crisis”

CASE Ih – New Holland

From the management of Agro-food cooperatives in Castilla-La Mancha, it is expected that the recent victory of Donald Trump in the United States presidential election could slow the end of the crisis, generating adverse effects for the economy.

In an article published on the website of this organization, its director, Jose Luis Rojas Sánchez notes that although the United States is not a destination of the most important for food products in Castilla-La Mancha, the foreseeable changes of course of Trump management in trade, environmental, economic, monetary and foreign policy, which now generate uncertainty and concern, could become more difficult to overcome the crisis: growth slowdown, market volatility, unforeseen monetary changes, Financing difficulties, protectionism and non-trade barriers and, in short, a general climate of mistrust. In his view, “in this scenario, the difficulties for the regional agri-food sector would be much greater and with very negative effects”.

According to the article, the director of Agro-alimentary Cooperatives of CLM points out, within the consequences that the victory of Donald Trump could have for commercial policies, both global and European, affecting the agri-food sector, following:

– A shift towards greater protectionism, increasing both tariff and non-tariff barriers to imports, including food products. In that sense, it draws attention to the fact that the US market is the main destination for EU exports, although it is the eighth for Castilla-La Mancha, with slightly less than 150 million €/year, of that only a little less than half are of agri-food products, reason why, quantitatively, the impact in that autonomous community will be limited.

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For Rojas, any change in US domestic trade policy may hinder entry of EU products and, as a result, lead to new markets

– Anti-globalization, which has presided over the entire campaign of Trump, based on arguments such as globalization and trade agreements have led to the relocation of US companies and the massive import of goods, causing job losses. “Although the references to TTIP have been scarce in the election campaign, we will have to see how these Trump statements and what their trade policy will be applied in practice,” he adds.

In that sense, he recalls that the US is one of the biggest exporters of goods and services and that any withdrawal towards greater protectionism can give China the position as the world’s leading trading power, a circumstance that, according to the director of Agro- Food industry, “will not be to the liking of the new US president.” “In any case,” he continues, “the TTIP will be in dead time for a while, waiting to see what position the US administration takes, but it will also be slowed down by EU countries after almost CETA failure (its ratification journey is not over yet) and the crucial elections in Germany, France and the Netherlands. ”

Regarding environmental policy, José Luis Rojas has referred to the rejection throughout his campaign that the republican candidate has shown about accepting the scientific evidence of climate change, attributing it to a strategy of China “to undermine the competitiveness of the US”. A policy that, in his view, could affect the future of the recently ratified Paris COP21 agreement, where the vast majority of countries in the world (including the most polluting ones) pledged last December to establish measures that would not increase the global temperature of the Earth by 2ºC, which would have irreversible consequences for the planet, according to scientists.

According to Rojas, Trump could decide to leave the Paris agreement COP21, “crucial for the agrarian and agri-food sector, since it would emanate policies of emission reduction, circular economy etc., that will affect agriculture”

In economic and monetary policy, US macroeconomic parameters, which have given stability to global financial markets, could be threatened, according to the director of CLM’s Agro-Food Cooperatives, for Trump’s commitment to lower taxes, which could leading to a decline in revenues, an increase in public debt and the deficit and the destabilization of markets characterized by greater volatility.

“International markets affected by a greater US deficit would hurt the still weak growth of the EU, especially the euro zone, leading to the need for further adjustments,” warns Rojas

As for foreign policy, Trump’s intention that the US give up its role as a “world gendarme”, advocating that each country adopt measures to protect itself and solve its problems, will make the EU “more vulnerable in the world”, according to Jose Luis Rojas, who states that “it will be necessary to see very carefully how the crucial relationship between the US and Russia is concretized and how it affects the current conflicts, especially Ukraine and Syria. We must not forget that the Ukrainian conflict depends on the Russian embargo on EU food products and its outcome is crucial for our sector”.

In that connection, he drew attention to the fact that after the victory of Trump one of the first decisions of the EU has been to convene a Council of Foreign Ministers to analyze the consequences of the results of the US elections.

In line with all of the above, Rojas says that “Trump’s triumph inflates oxygen to the Euro-Phobos before the elections in France, Holland and Germany, crucial for the future of the EU as we know it, further increasing the uncertainty in the agro-food sector, which is not exactly the best climate, as is known, for business and international trade”.