U.S. President Donald Trump and Russian President Vladimir Putin have been placed in the limelight once again when Russia was accused of tampering with the U.S. election hacking controversy. But their talks at the recent G-20 summit in Germany cleared the issue where Trump acknowledged that Russia has nothing to do with the hacking.
The talk between the two world leaders is a good sign that the relationship between the two countries improves. It also serves as an encouragement for other countries that worked with them under the global trade.
Their agreement was relevant because maintaining a diplomatic relation among countries is important. Diplomatic relation helps improve the trade policies between nations. It also helps the economic security improvement of each country. In fact, economic security was on the agenda of Trump and Putin.
Earlier this year, Trump addressed that his government would boost wages. He also planned to increase job opportunities for the workers in his country. On the other hand, Putin signed a decree last May focusing on the approval of his country’s economic strategy until 2030.
The agenda of the world leaders aim to counteract financial insecurity. This is a good thing for just about any industry, whether it’s best selling Tissot watches, top rated citizen watches, underwear or even beverage industry.
Based on the survey published by the U.S. Census Bureau, 57 percent of Americans are not financially prepared. The survey showed that 55 percent break even each month or spend more than they make. The survey revealed that 33 percent have no savings.
With the figures revealed, no wonder why Trump attempted restoring the processing industries. It may decrease the high unemployment rates, which is one of the factors of financial insecurity.
Trump’s vision to increase job offers is in-line with the traditional manufacturing process. He also wants to adopt an import-substituting industrialization policy. He perceives that it’s a better approach for the economy structure’s transformation.
Import-substituting Industrialization Policy
Import substitution industrialization policy a.k.a. ISI aims to reduce foreign dependency. It aims to produce domestic products replacing foreign imports.
Although the policy’s effectiveness is ambiguous, the policy could increase labor productivity. An empirical research result suggested the emergence of new industrial complexes as well as increased competitiveness. On the contrary, the world economy showed that there was no universally accepted strategy for such policy.
According to Neale & Newman, LLP, a law firm that deals in matters like this a lot told us that the policy faces challenges due to two factors. The challenges include low investment activity and the import of foreign equipment. Without investors, the industry needed to get a loan from financial institutions. However, some institutions offer high-interest rates.
On the other hand, the challenge for the importation of foreign equipment is the high tariff. High tariff affects the balance sheet of local industries. Consequently, manufacturing companies lay off some of its laborers. This somehow defeats the main goal of job creation.
The solution perceived is the establishment of balance trade among countries. The industrial policy among countries can also help improve the economic security. The creation of universal tool can also benefit the manufacturing industry worldwide.
Although tools are effective, a diplomatic relation is still necessary to achieve economic security.