Globalization took hits in 2016; will 2017 lead to more?

LONDON, United Kingdom (AP) — 2016 was the year when globalization, the path that the world economy has largely followed for decades, took some hefty blows.

The election of Donald Trump as US president and Britain’s decision to leave the European Union have raised questions over the future of tariff-free trade and companies’ freedom to move production to lower-cost countries.

Borders are back in vogue. Economic nationalism is paying political dividends.

“We want our country back” was the rallying cry of those backing Brexit. A sound bite that had echoes in Trump’s “Make America great again.”

The rise of Trump and the triumph of Brexit had their roots in the global financial crisis of 2008. Eight years on, the world economy has still to fully get past that shock to confidence — people are nervous, some angry, and many are seeking novel solutions to their problems. Next year, there’s scope for more uncertainty with elections in France and Germany to name just two.

Trump and Brexit were just two of the year’s top stories in the world of business.

BREXIT SHOCK In what was a sign of things to come, Britain voted to leave the EU in a referendum in June. The decision came as a surprise — certainly to bookmakers and many pollsters who had consistently given the “remain” side the edge — and means Britain has to redefine itself after 43 years of EU membership. Prime Minister David Cameron has resigned and the new government led by Theresa May is planning to trigger the formal process by which the country exits early next year. There are many shades of potential Brexit, from an outright divorce that could put up tariffs on goods and services, to a more amicable parting that sees many of the current trading arrangements kept in place. The pound’s fall to a 31-year low below $1.20 at one point is testament to that uncertainty.

TRUMP CARD Pollsters and bookmakers got it wrong again a few months later when Trump defeated Hillary Clinton in the presidential election. Whether he translates his “America First” platform into action following his inauguration in January will help shape the global economy for the next four years at least. Trump has railed against long-standing trading agreements, including the North American Free Trade Agreement, punish China for the way it devalues its currency against the dollar, and tax US firms that move jobs overseas. He has also laid out plans to bring America’s creaking infrastructure up to 21st century standards, a new spending pitch that has the potential to boost jobs — but which could also lay the seeds of higher inflation.

MARKETS MARCH ON Trump’s victory did not cause the bottom to fall out of the stock market rally that’s been largely in place since 2009, when the world economy started to first claw out of its deepest recession since World War II. In fact, both the Dow and the S&P 500 rallied to hit a series of record highs. Stocks have also benefited from a raft of big corporate deals this year — executives are seeing takeovers as a fast way to generate growth in what is otherwise a low-growth global economy disrupted by non-stop technological innovations. Notable deals in 2016 included the announcement of an $85 billion merger of Time Warner and AT&T and the $57 billion takeover of Monsanto by Germany medicine and farm-chemical maker Bayer. The $100 billion takeover of SABMiller by Budweiser maker Anheuser-Busch InBev was also completed.