Protectionism Exposes the Pitfalls of US Corporate and Economic Short-Termism
Economic optimism levels of US corporate insiders and small business owners continue to flourish in Q1, despite higher levels of financial market volatility and the emergence of protectionism.
Protectionism will disproportionately impact US CEOs through lower profits and consequently stock prices, thereby highlighting the crucial role of outsourcing in boosting operating margins.
The US has always had a feisty trade relationship with Asia, but the most severe sanctions have hitherto been imposed on Japan compared to recent measures against China.
Tariffs are not guaranteed to attract new capital to industries protected by the Trump Administration’s protectionist measures due to the lack of certainty about future improvements in companies’ operating performance.
In contrast to Germany and Japan, the US has struggled to cope with the economic and social displacement associated with deindustrialisation due to the absence of an industrial strategy.
Rising protectionism could produce headwinds for Asian countries hoping to make a smooth transition from developing to developed nation status by producing premature deindustrialisation.
DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the intention of delivering independent global macro investment insights and new thematic long-term ideas to investors, along with an agnostic opinion of the markets.
Said DeSaque has over 29 years of experience working as a professional economist in financial services, primarily based in London. His working role has involved extensive travel around the world, bringing him into contact with investors of different cultural backgrounds and investment requirements. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist and Investment Strategist at US banks Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he became Head of the London Economics Department in 1996. This role allowed him to engage with senior investment professionals, alongside regulators and provided a unique perspective of market intelligence at work.
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