U.S. President Donald Trump’s protectionist stance is likely to erode economic growth over the longer term and therefore demand for raw materials, the chief executive of the world’s biggest miner, BHP Billiton, said on Tuesday.
Mining stocks rallied on expectations Trump’s policies would lead to increased infrastructure spending in the United States and, just before Trump took office, Mackenzie had a meeting with the president-elect, which officials said was productive.
Andrew Mackenzie said it would be good news for the resources sector if Trump could unlock “the challenge of bringing more money into infrastructure”. But he said Trump’s protectionist stance was likely to be bad for growth and therefore ultimately for commodities demand.
“When you take the medium-term view, it’s hard to fault the value of free trade,” Mackenzie told reporters, adding it created, for instance, better sharing of ideas to cut costs for the consumer, therefore stimulating demand.
“Without a greater commitment to that (free trade), you’re not going to get back to 4 percent GDP growth and that’s the kind of growth rate you need to continue to lift people out of poverty and to fuel a decent demand for commodities going forward.”
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