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Case Code: ECON062
Case Length: 19 Pages 
Period: -   
Pub Date: 2017
Teaching Note: Available
Organization :
Industry :-
Countries : India 
Themes: Donald Trump/  
 Barack Obama/  
 US Economy/  
 NAFTA/Mexico/ H1-B Visa  
Case Studies  
Business Strategy
Human Resource Management
IT and Systems
Leadership & Entrepreneurship

US under President Donald Trump: A Protectionist Nation?

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President Roosevelt introduced several relief and reform measures aimed at mitigating the worst effects of the Great Depression in the 1930s, stabilizing industrial and agricultural production, creating jobs, and stimulating recovery. A permanent job program – Works Project Administration (WPA) – was built to employ more and more Americans. However, the economy could not achieve a full turnaround until after 1939. In 1939, World War II (WWII) propelled the American industry into another boom. The Great Depression fueled the rise of extremist political movements in various European countries, including Germany, which led to war breaking out in Europe in 1939. This time, the WPA worked to strengthen the military infrastructure of the US. Roosevelt supported Britain and France in the struggle against Germany and the other rival countries. As a result, the defense manufacturing sector experienced a boom and started creating private jobs. In 1941, when Japan attacked the naval base of the US at Pearl Harbor, the US declared war. .

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In January 2009, for the first time in the history of the US, an African-American, Barack Obama (Obama), took the oath of office as President of the US. Just two days later, Obama nullified one of the Bush rulings that allowed detainees in US custody to undergo certain enhanced interrogation techniques. These techniques were considered inhumane under certain conventions. Further, in order to boost economic growth in the country post recession, Obama signed a $787 billion American Recovery and Reinvestment Act in 2009 which resulted in creating nearly 3.7 million private sector jobs in just 23 months. According to some analysts, the recession ended in July 2009 when the country’s GDP growth turned positive for the first time after months of negative growth. Considering the huge losses caused by the collapse of the financial sector and its practices during the 2008 financial crisis, Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) in July 2010 to re-regulate the sector. The new law tightened the rules governing banks and other financial institutions so that chaotic bankruptcies could be avoided. .

US IN 2015-2016

Amidst the agreements and policies floated by President Obama, the US economy continued its strong rebound with a falling unemployment rate, growing wages, and increased consumer confidence. The unemployment rate came down from 10% during the financial crisis to 4.9% in 2015 whereas the hourly wages grew by 2.7%. At a White House briefing, Obama said, “After reaching 10 percent in 2009, the unemployment rate has now fallen to 4.9 percent even as more Americans joined the job market last month. Americans are working.” ..


On the one hand, the US government was planning to have free trade agreements with more and more countries, on the other, analysts believed there was growing protectionism in the US and many parts of the world. The World Trade Organization started monitoring G20 economies in 2009. The organization saw the worst phase of new protectionist measures being introduced from mid-October 2015 to mid-May 2016 when 145 such new measures were implemented. Further, it was found that since 2008, the G20 economies had introduced as many as 1,583 new trade restricting measures while removing just 387. In late 2016, the WTO announced that there was a dramatic slowdown of world trade because of the weak economic growth and low levels of investment in factories and infrastructure in China, Brazil, and North America. Further, the WTO estimate for 2017 trade growth was also cut down to a range of 1.8% to 3.1% from a previous estimate of 3.6%. ..


In early 2016, Trump, during an interview, stated that the country’s economy was not something he wanted to tackle and that it might head toward another recession in the coming years. He said, “I can fix it. I can fix it pretty quickly.” During the 2016 election campaign, he focused on “Making America Great Again”. During the initial campaigning days, he promised to focus on bringing stringent immigration reforms and building a wall between Mexico and the United States. He demanded the deportation of 11 million undocumented immigrants along with a focus on criminal undocumented immigrants..


Trump believed that after winning the elections, he had successfully negotiated the biggest deal of his life with voters being on his side. However, he and his administration were upset with the country’s media. The chief White House strategist, Steve Bannon, branded the mainstream media of the country as the opposition party. Describing many of America’s journalistic institutions as enemies of its own people and criticizing them for printing illegal leaks, Trump said, “I called the fake news the enemy of the people.


Trump was a successful businessman. However, he was yet to prove his worth in the President’s role. He was quick to sign orders, many of which shocked the Americans and the world. Trump’s policies and plans received mixed reactions from analysts, industrialists, experts, and economists..


The American voters’ decision to choose a businessman as their President brought along with it a number of challenges for the nation and for other countries. Analysts were of the view that the US under Trump was yearning to move in a conservative direction. Trump during the election campaigns had expressed his support for a paid family leave policy, increasing the minimum wage, and increasing taxes on wealthy Americans who were earning more than $250,000 per year. However, it was yet to be seen how the President of the country would fulfill his promises and convince his supporters. ..


Exhibit I:DJIA* Closing Prices
Exhibit II: Trump’s Cabinet.
Exhibit III: Top Sponsors for H-1B Visas in the US in 2016.