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Graphic content – December; the countries most exposed to a rise in protectionism

President-elect Trump has suggested withdrawing from the North American Free Trade Agreement (NAFTA) and ending negotiations over the Trans-Pacific Partnership (TPP), albeit there is considerable uncertainty over what he will, or even can, do.

If one of the main consequences of the election of Donald Trump is US protectionism, it’s worth considering who stands to lose the most. We have considered countries’ exports to the US as a percentage of their GDP, in the belief that countries that trade most with the US would almost certainly be hurt the most.


As the gravity model of trade would imply, countries that are largest and closest to the US are most reliant on trade with it. Mexican exports to the US are considerable, and the role of NAFTA for increasing trade after 1994 is notable.

The Canadian economy comes second, but looks less reliant on exports to the US compared to 15 years ago. In fact, Canadian exports to the US now represent around 19 per cent of Canadian GDP, but its net exports to the US represent only 3.2 per cent of Canadian GDP.

Ireland, which exports predominantly healthcare and chemical products to the US, in addition to being highly exposed to potential US tax changes, also looks to be at risk.

Conversely, most of the market concern regarding US protectionism seems focused on China. While China is the biggest exporter to the US in total trade terms, the reality is that China’s economy in the past decade has transformed from one that was export reliant to one that is now largely led by domestic investment. Chinese exports to the US now account for only 4.4 per cent of Chinese GDP, versus almost 11.5 per cent in 2005.

If the US does resort to protectionism, it is very unlikely to be alone. Protectionism globally is most damaging to the GDP of countries whose economies are the most open, and probably more damaging to those economies that export more than they import. Large export-reliant economies that would therefore be most hurt by a rise in global protectionism include Germany, Saudi Arabia and South Korea. Meanwhile, large economies that would be much less affected include Brazil, Japan and the US.

Investing involves risk. The value of an investment and the income from it may fall as well as rise and investors might not get back the full amount invested.

Past performance is not a reliable indicator of future results. If the currency in which the past performance is displayed differs from the currency of the country in which the investor resides, then the investor should be aware that due to the exchange rate fluctuations the performance shown may be higher or lower if converted into the investor’s local currency. The views and opinions expressed herein, which are subject to change without notice, are those of the issuer companies at the time of publication. The data used is derived from various sources, and assumed to be correct and reliable, but it has not been independently verified; its accuracy or completeness is not guaranteed and no liability is assumed for any direct or consequential losses arising from its use, unless caused by gross negligence or wilful misconduct. The conditions of any underlying offer or contract that may have been, or will be, made or concluded, shall prevail.

This is a marketing communication issued by Allianz Global Investors GmbH,, an investment company with limited liability, incorporated in Germany, with its registered office at Bockenheimer Landstrasse 42-44, 60323 Frankfurt/M, registered with the local court Frankfurt/M under HRB 9340, authorised by Bundesanstalt für Finanzdienstleistungsaufsicht ( The information contained herein is confidential. The duplication, publication, or transmission of the contents, irrespective of the form, is not permitted.


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