Outside In | Hong Kong could be slammed under this dire global trade scenario
‘Any conflicts that disrupt regional trade will have immensely amplified impacts on our trade-dependent economy’
After two weeks of relentless “America first” rhetoric from the Pinocchio Apprentice, and a blizzard of proclamations, presidential memoranda, and executive orders that threaten trade, migration, international tax rules and global currency levels, there can hardly be a government worldwide – or a multinational business for that matter – that is not scurrying for the safety of a bunker while hastily re-reading Nassim Taleb’s Black Swans.
Except for Hong Kong of course, where we have been distracted by a little local election and the appalling abduction of a mainland billionaire from the safe haven of the Four Seasons hotel. While this distraction is understandable, my sense is that even Hong Kong’s distraction from the world’s “main event” can only be short-lived.
Our companies have yet to turn their thoughts to how they will best respond, but there must be a sense at present of a calm before a storm
From Mexico and Germany to Japan and China, top officials and their think tanks will be scenario-planning what can possibly happen next, and how best to respond to even the most improbable scenarios. If the Apprentice’s Art of the Deal aims at creating confusion and uncertainty as a starting point for any aggressive negotiation, then Donald Trump has succeeded in spades.
Thoughts go back to 1895 and Rudyard Kipling’s poem If: “If you can keep your head when all about you are losing theirs and blaming it on you… you’ll be a man, my son!”
Thoughts also go to Duterte’s Philippines, where he has been drafting his own version of Art of the Deal, and using unpredictability as a primary policy tool. Which may perhaps be playing with fire, since I fear the Philippines may be more in the Pinocchio Apprentice’s firing line than Duterte or others in the region currently recognise.
I am thinking in particular about the Philippines’ two main foreign exchange earners, and major contributors to the economy – overseas Filipino workers and business process outsourcing. Surely both of these pillars of the Philippine economy have to be vulnerable while the Pinocchio Apprentice is railing against migration, and the imperative to bring America’s jobs back home. Given the importance of both to the Philippine economy, the cause for concern must be high.
