Is Donald Trump a protectionist president? Globalisation benefited some Americans more than others. Consumers with money to spend enjoyed the low prices and the extra choice created by free trade. Big corporations, such as General Motors (GM), also benefited. GM closed down factories in the USA and relocated production to Mexico, where wages and regulatory costs were lower. The profits generated from offshoring flowed to the rich in the form of dividends.
But globalisation did not benefit everyone. Outsourcing to low-wage economies decreased the demand for blue-collar labour in the USA, causing unemployment to soar in America’s rustbelt. Most of those who managed to find a new job had to do so by accepting low pay and job insecurity in the service sector. The gap between the rich and the poor within the developed world grew as a direct consequence of global free trade.
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