Donald Trump began his trip to Saudi Arabia this week with a record $US110 billion armaments sale and pundits note that he is not the first U.S. leader to hold that “what’s good for General Motors is good for the country.”
But in general, is the president’s “pro-America” business posture actually benefitting the American economy? Have gains in any U.S. sector emerged in the wake of Trump’s campaign tweets (“Don’t do business with Mexico”), the headline-grabbing cancellations of plans to build U.S. factories here and the weakening of the peso?
To put it poetically, is American business soaring like an eagle as the “bad hombres” get a whooping?
To put it succinctly, no. True, a strong Trumpian stock market and looser environmental rules will favor certain sectors of the U.S. economy. But indicators show that such sectors as travel, universities and even auto manufacturing may be in a “Trump slump,” a phrase coined by travelmeister Arthur Frommer. (Travel and universities, admittedly, do not rise to the level of armaments. In a 2013 list of the world’s 10 top-selling arms makers, U.S. firms sold over five times more than manufacturers of any other single nation, and the recent sale to Saudi Arabia can only boost U.S. dominance in this sector.)
Tourism comprises eight percent of the U.S. gross national product and Trump’s badmouthing of Mexico, widespread coverage of mistreatment of tourists in U.S. airports and the weaker peso are all raining on Mexican travel to the United States, and probably causing the boom in Americans traveling to Mexico.
Mexicans and Canadians, both smack against U.S. borders, traditionally comprise the lion’s share of inbound tourists. But the drop in the peso that accelerated as Trump maligned Mexico and Ford and Carrier abandoned plans for Mexican plants has had wide effects on travel to the United States.
“Mexicans used to buy electronics in the States,” said one frequent northbound traveler. “But with this exchange rate, we don’t.”
Tourist magnets such as Disneyland and Disney World, traditionally a huge draw for Mexicans, have also lost their luster. Guadalajara teacher Amelie Guerra says her students used to adore vacations to Disney attractions. But Trump’s election discouraged them and their desire to travel north evaporated.
Similarly, the flight packager Kayak reported a 23 percent drop in searches for flights from Europe to the United States after Trump jarred the world with bans on travelers from majority-Muslim countries.
“Experts … are warning that masses of tourists are being scared away [from the United States] and the loss of tourism jobs could be devastating,” warned Frommers.com in March. At the same time, a tourism report from Anahuac University saw a surge in Mexican tourists heading to Canada – flights to Canada rose a hefty 82 percent between December and March.
Likewise, northbound Mexican business travelers report that dismal airport experiences deter travel.
“I was pulled aside after I went through immigration. I don’t know why; my documents were in order,” said a shaken Mexican traveling from Guadalajara to Chicago for a multinational tech company. “They detained me for two hours.”
Now permanently living near Chicago, the tech worker reports that her employer warns Mexican staff not to travel back to Mexico unless necessary.
Meanwhile, in contrast to tourists entering the United States, outgoing, southbound tourism is booming due to the same peso-dollar rate that is drying up northbound tourism: pesos don’t buy much in the United States, but dollars buy a lot in Mexico. Thus, as Anahuac University reports, the number of Americans coming to Mexico jumped 11.4 percent in 2016.
Mistreatment of foreigners at U.S. airports is likewise afflicting “conferences that involve people coming from other countries … really the whole of international tourism to the tune of many hundreds of millions, if not billions, of dollars,” said former U.S. diplomat Dan Turnquist, a Guadalajara resident.
José Luis Montañez, a Guadalajara nephrologist, tells of a Mexican colleague who recently decided not to attend a medical conference in Philadelphia.
“People who have money are deciding not to spend it in the United States if they’re going to be treated badly there,” he said.
Universities are very attractive to foreign students and are a mainstay of the U.S. economy (three cents of every dollar spent goes to higher ed, triple the amount in 1962, reports The Economist). But higher ed has been hurt by Trump’s election, says a 2017 report by U.S. analyst AACRAO. In November, the University of Michigan reported a drop of about 30 percent in foreign applications. Worried applicants are mostly from the Middle East and Asia but Latin Americans also fret about visa uncertainties and a hostile climate.
“If I were thinking of sending one of my two kids to an American university, I’d decide against it,” said Dr. Montañez.
With airport horror stories and scrappings of planned Mexican factories on overdrive, will new, non-American businesses take up the slack?
Knowing nearly 80 percent of their exports go to the United States, sparks flying out of the Trump camp are prodding Mexico to set its sights farther away. Perhaps picking up the perceived problem in manufacturing, Mexican magnate Carlos Slim recently announced a deal with Chinese automaker JAC Motors to make cars in Hidalgo state.
In travel, China Southern Airlines has announced a direct route between Mexico City and Guangzhou, meaning Mexicans no longer need fly through intermediary U.S. airports to reach China.
This shift extends to Mexico-Europe flights. As Sven Clyde, a resident of Italy and frequent flyer to Guadalajara reports, “Recently … for the first time the direct Iberia flight [from Spain to Latin America] was cheaper than the ones that fly via the U.S., so I took it.”
Travel, education and manufacturing ... based on this emerging picture of an aggressive shake-up that appears to be harming the aggressor, can we hope for more intelligent policies?