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An inward-looking US could cause a world of hurt

Trump's narrow-minded agenda threatens the progress brought by globalization

TOKYO -- The inauguration of U.S. President Donald Trump and his "America first" policy have rattled a corporate world long accustomed to the globalism once so fervently embraced by the world's biggest economy.

"Mr. Trump often uses the word 'world.' For Americans, the U.S. is the world itself," said a former executive at a major Japanese company, reflecting on his stint in the U.S.

The fact that Major League Baseball calls its championship the "World Series" is probably a manifestation of that brand of thinking. Americans view Europe, Japan and any other place outside U.S. borders as "the rest of the world," a term often used in daily conversation.

Nation of immigrants

The tolerant U.S. immigration policy, which has served as a magnet for people from across the globe, is probably one reason Americans have come to feel that their country is the world itself. But with the Trump administration's strict clampdown on immigrants, it appears as though the U.S. has abandoned that view and become aware of being a country.

Many of the U.S. companies behind the nation's economic vigor -- such as Google, Starbucks, Apple,, Facebook, Netflix and Airbnb -- have spoken out against Trump's controversial immigration policy. That is hardly surprising given that many of those companies were founded or are headed by people from Russia, the Middle East and elsewhere.

Trump has made clear his intention to pursue only the interests of the U.S on the trade front as well, withdrawing from the Trans-Pacific Partnership free trade agreement and dredging up old automotive trade issues with Japan that were resolved in the 1990s.

Some observers say American automakers are behind the renewed trade friction between Japan and the U.S. They claim that the carmakers want to draw Trump's attention away from China, the world's largest car market and a far more lucrative arena than Japan. In other words, the U.S.-Japan tension is merely a distraction aimed at protecting their cash cow.

But there are concerns that China might also adopt an inward-looking trade policy sooner or later in response to the changing atmosphere in the U.S. If China threatens to levy a "border tax" on imports, as Trump has, or comes up with a policy that favors domestic companies, the terms closely associated with globalization, such as "horizontal division of labor" and "flattening," will eventually die out.

Taiwan's Hon Hai Precision Industry, also known as Foxconn, has achieved remarkable growth through its strong manufacturing presence in mainland China. Shortly after Trump's inauguration, Foxconn unveiled plans to set up a production base in the U.S. Its chairman, Terry Gou, is spearheading the move. Is he doing so because he detects signs that the world is moving toward "localization" and "vertical integration?"

The inward-looking turn happening in the U.S. is also probably being driven by the renewed competitiveness of American manufacturing due to the evolution of artificial intelligence and advances in shale gas and oil technologies. But the Trump administration's plan to build a wall and lock the U.S. inside it will not necessarily benefit American companies.

There have been news reports of a Mexican campaign to boycott cars made by U.S. automaker Ford Motor, which canceled a plan to invest $1.6 billion in the country due to pressure from Trump. In stark contrast, Toyota Motor has reportedly won kudos in Mexico for refusing to ditch its investment plan there.

It is a shame to see the close relations built between the Japanese and U.S. industries erode after so many years of hard work.

Threat to innovation

Shuhei Abe, president of Sparx Group, a Tokyo-based company aggressively investing in AI-related venture businesses around the world, stressed the importance of cooperating with American companies.

"Japanese technologies are still at the highest levels in the world," Abe said. "But if Japanese companies are to succeed in business, the efficient way to do so is to cooperate with American companies, which have both global experience and strategies."

The free movement of people, goods and money is essential not just for technological innovation but also the development of new industries. Four years of stagnation brought by narrow-minded and anachronistic policies in the U.S. is something that should be avoided at all costs. 

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