Professor Tommy Koh's Speech: President Trump In Office: What Can Singapore Business Expect?
January 20, 2017
Professor Koh's Speech at the Singapore Business Federation and American ChamberElephant Replaces Donkey
I want to draw your attention to the tie I am wearing. The elephant is the symbol of the Republican Party. I am wearing my elephant tie because in a few hours, the elephant will replace the donkey as the reigning animal in Washington D.C. The Republican Party will, not only control the White House, but also the Senate and the House of Representatives.
Tribute To Ambassador Kirk Wagar
I want to take this opportunity to pay a tribute to the outgoing US Ambassador to Singapore, Kirk Wagar. He is a personal friend, a good friend of Singapore and a champion of US and Singapore business. For 3½ years, Kirk has represented the US in Singapore with great distinction. He has left a positive legacy on the strength of the US-Singapore relationship. Thank you Kirk.
I want to register three caveats before I share my thoughts with you. First, it takes a new administration at least six months to organise itself and to develop its policies. We are trying to discern the Trump Administration’s policies even before it takes office. I am therefore compelled to speculate on the evidence before us. Second, we should not make the mistake of treating campaign rhetoric as policy. It is an honourable US tradition for a new US President to choose whether to honour or disregard his campaign promises. Third, the US has certain permanent interests in the world which no occupant of the Oval Office in the White House can afford to ignore. This explains the large element of continuity in US foreign, security and economic policies no matter which party is in power and the personal preferences of the President.
Is Trump Good For Business?
The question which I have been asked to answer is whether President-elect Trump is good for business.
As an optimist, I will begin with the positives. First, I have noticed that the global equity markets have responded positively to President-elect Trump’s election. The Dow has gone up. Investors have pushed the yield on the 10-year US Treasury bonds to a level not seen since January 2016.
Second, business will benefit if President-elect Trump carries out his promise to:
(i) increase government spending on domestic infrastructure projects as a driver of economic growth and job creation; and
(ii) reduce corporate tax from 35% to 15% and implement a one-time tax rate of 10 percent on the repatriation of offshore corporate profits.
Third, Singapore companies which plan to invest in America and create jobs for American workers will be warmly welcomed by the Trump Administration. One of his priorities is to create jobs, especially in the Rust Belt and other economically depressed parts of America. Singapore is already the fourth largest Asian investor in the US, after Japan, Australia and South Korea. I expect the upward trend to continue.
Uncertainties and Worries
It would not be credible if I did not balance my three positive points with some of my worries and uncertainties. First, we do not know what President-elect Trump will do with the TPP. We note that his nominee for the post of Secretary of State, Rex Tillerson, has said that he does not oppose the TPP.
Second, I worry about the future of US-China relations. A trade war between the US and China would hurt both economies and be a disaster for the world.
My conclusion is that we should meet again six months or 12 months from now when the picture will be clearer. I want however to end on a positive note. For over 70 years the US has played a positive and leading role in and benefitted from the stability and prosperity of the Asia Pacific. The US has certain permanent interests which no President can ignore. Singapore has worked productively with five Republicans and four Democratic Administrations. We look forward to working closely with the 45th President and his Administration, to advance our shared interests and to strengthen peace and promote prosperity in the Asia Pacific.