Silicon Valley firms urged to quit Trump-led US, move to NZ

Global markets fell as it became clear Donald Trump was going to win, but have since bounced back (Getty)
Global markets fell as it became clear Donald Trump was going to win, but have since bounced back (Getty)

Economist Shamubeel Eaqub says the election of Donald Trump to the US presidency could be a good chance for New Zealand to poach tech firms from Silicon Valley.

Mr Trump won an upset victory in Wednesday's (NZ time) vote, winning enough swing states to carry the Electoral College, despite being losing the popular vote to rival Hillary Clinton.

Mr Eaqub says the result mirrors Brexit in that it was unexpected and driven by the "dispossessed", but the impact on the global economy will be much greater.

"America's 22 percent of the global economy and the UK is 4 percent," he told Paul Henry on Thursday morning.

New Zealand has "a lot of skin in the game" when it comes to the US economy, says Mr Eaqub, with 12 percent of our exports going there.

But Mr Trump's threat to tear up the Trans-Pacific Partnership trade deal is so small to be virtually irrelevant.

"The TPP was only going to add 1 percent over 40 years or whatever it was anyway, so let's not get too caught up in that," says Mr Eaqub.

"I think what's more worrying is his idea to dismantle NAFTA, his idea of imposing tariffs on China."

But will Mr Trump actually follow through with those threats? With the Republicans winning both the House and Senate, he probably could - but Mr Eaqub has his doubts.

"The speech he gave last night was far more presidential, relative to the bigoted, angry, horrible stuff he did during the campaign. We don't actually know what his economic policies are, because we haven't seen the detail."

Silicon Valley firms urged to quit Trump-led US, move to NZ

Shamubeel Eaqub

The west coast of the US voted strongly against Mr Trump. The country's biggest state, California, voted in favour of Ms Clinton 61-33. Mr Eaqub says if Mr Trump enacts protectionist trade policy, Silicon Valley firms with international customer bases might be tempted to move.

"That puts New Zealand in a good place, because we're an advanced economy with open markets... we're a good test case, like we were with China.

"My cheeky idea is that we should just have a special policy to bring in lots of firms from Silicon Valley into places like Whanganui and Palmerston North - regional development, immigration policy, economic development all rolled into one."

But with Mr Trump also threatening to pull back on the US' involvement in global security, trade involving tangible goods crossing borders could slow.

"America's played the global police force, and that's had a big impact not just in terms of geopolitical stability, but also in terms of protecting those very important trade routes," says Mr Eaqub.

Global markets fell as it became clear Mr Trump was going to win, but have since bounced back.

Newshub.

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