After taking office, one of the first things on the table for President Trump is to abandon the Trans-Pacific Partnership (TPP) – an agreement that can supposedly strengthen economic ties between the U.S. and 11 countries by the Pacific Ocean.
Advocates of the pact hoped that through lowering trade barriers, the TPP can support productivity, economic growth and competition while maintaining transparency and higher living standards within the countries involved. However, Trump has a different view of the matter. Following his executive order to abandon the agreement, Trump referred to the situation as a “great thing for the American worker.”
He wanted to change the agreement and promote manufacturing jobs in the US. Trump’s vision included boosting the competitive advantage of the US like China.
What Small Business Can Take Away from the Situation
As Trump pushes for renegotiation, trade barriers will remain. These also include tariff and nontariff barriers. For countries involved, this means increased prices now. Depending on the industry, some businesses will find it hard to compete with foreign companies who can sell similar goods at lower prices.
Small business proponents of the TPP claim that the partnership can be beneficial to small- and medium-sized U.S. exporters. The agreement can reduce or eliminate tariffs that make products pricey. The reduced tariff could have helped small- and medium-sized businesses to stay competitive when doing trade with TPP-member countries.
However, this doesn’t mean there won’t be future negotiations to bring back the supposed benefits on the table. Small business owners must remain on the lookout for possible opportunities from upcoming agreements.