Attitudes around the world may have tilted towards nationalism as of late, but General Electric still sees globalization as an undeniable order of business.
Although the U.S. and governments around the globe are beginning to mount economically protectionist pressures, GE (GE) is positioned to weather the storm, CEO Jeffrey Immelt wrote Monday in the top executive’s annual letter to shareholders.
GE, which gets 60% of its product orders from outside the U.S., has forged many joint ventures in other countries over the years, giving the company a strong presence in many local markets around the world. The foothold will enable GE to continue the global expansion that has driven its growth over the last few years, no matter how hard of a line President Donald Trump takes against globalism, Immelt said.
“Today, our globalization is driven by a desire to access fast-growing global markets,” Immelt wrote. “We still see substantial opportunity to grow around the world by investing, operating, and building relationships in the countries where we do business.”
Trump, who wasn’t named specifically in the letter but whose policies were obviously referenced, has repeatedly harped on the need to bring manufacturing jobs back to the U.S., adopting “America First” as a mantra. In January, he withdrew the U.S. from the Trans-Pacific Partnership deal, the first in what is expected to be many moves to try to protect American jobs by putting roadblocks in front of imports. He has also proposed a tariff on all imports from Mexico, one of the U.S.’s biggest trade partners. And at times seemed to support a wider border tax on all imports.
The sentiment isn’t limited to the U.S. The surprising result of the Brexit vote in the U.K. shows that nationalist attitudes have proliferated, which is a bad sign for economic growth around the world, and potentially large multinational’s like GE.
“To be clear, our preference is for multilateralism and free trade,” he wrote. “But in this period of nationalization, GE’s competitive advantage will grow. We don’t need trade deals, because we have a superior global footprint. We can export from multiple countries that give us access to their funding.”
Immelt also noted that he while he was mindful of how a nationalistic policy would affect trade, he was hopeful that the Trump administration would rectify some of the government’s antiquated economic policies that Immelt said have held back U.S. manufacturing during the last few decades. Among the problems he hopes are addressed are tax policies that favor imports over exports and the inadequate infrastructure spending by the government.