I've lived outside the United States for about two-thirds of my life, and now I live in the southeast Asian city of Singapore. When I return to the U.S. to visit family and friends, I see things from an outsider's perspective.
In my most recent visit, after being away for a year, there are three things that struck me. The country is remarkably affordable, but there is significant distrust in trade deals and economic globalization that helps keep prices low by removing or minimizing the effect of tariffs and other barriers. Its transportation infrastructure, including its roads and bridges, is falling apart. Many people do not trust their government.
America is Cheap
Maybe it's because I currently live in the world's most expensive country, but other than in some of the big cities on the east and west coasts, things really don't cost very much.
In many place, real estate is relatively cheap, especially compared to Singapore and Hong Kong. Thanks to lower taxes, cars are inexpensive. In Singapore, a car can easily cost four times what it costs in the U.S., mostly due to taxes. Food, whether eating out or at the grocery store, is cheap. And Wal-Mart, Costco, Home Depot and outlet malls offer an unbelievable variety of goods at what are arguably some of the lowest prices in the world.
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So what? America enjoys low prices on a lot of stuff thanks to globalization. Asia, and other parts of the world, have been America's factories for decades, exporting low prices to the U.S. But there is a wave of anti-globalization rising all over the world, whether it's from Donald Trump or Brexit.
Trump has implied he'll launch a trade war with China if he is elected president. And the Trans-Pacific Partnership, which will ease trade between 12 Pacific Rim countries that make up about 40% of the world's economic output, is being talked down by both presidential candidates. It may end up not being approved by the U.S., at all.
And Britain, the world's fifth-largest economy, has decided to leave the EU, the world's largest trade bloc. None of this bodes well for globalization.
Asia is not the only potential loser from this trend. In fact, one of the biggest losers from reduced globalization is the American consumer. This is because less globalization will mean higher prices for a lot of stuff in the U.S. And if Americans start buying fewer things because prices are climbing, it will hurt global economic growth. After all, the American consumer has been one of the main drivers of economic growth worldwide.