When Colm Kelleher, chairman of UBS, sat down with Scott Bessent in recent months to discuss uprooting the bank's headquarters from Zurich to New York, it was more than corporate maneuvering. It was a signal flare for the financial world under Donald Trump's second term. Bessent promised a regulatory bonfire that could slash compliance costs and open the floodgates for American finance. The reported talks underscore a broader shift: the United States is apparently positioning itself as the unassailable hub of global capital, drawing in institutions like UBS with tax breaks and lighter oversight. Yet this allure comes at a steep price for emerging markets, where wage growth is already fragile. What looks like a boom for American workers masks a quiet trap, one that could deepen the divide between rich nations and the rest.
Bessent's vision, laid out in private conversations and public hints, paints a picture of American exceptionalism reborn. He has warned of a "perfect storm" of inherited inflation and supply disruptions from the Biden years, now to be tamed by aggressive deregulation and targeted tariffs. In one recent interview, he blamed soaring beef prices on a mix of migrant-driven cattle issues and lingering policy failures, framing Trump's agenda as the corrective force. The rhetoric is folksy, but the policy is sharp: roll back rules that hobble banks, lure foreign firms stateside, and shield domestic industries with import duties. UBS's flirtation with relocation fits neatly here. Across the Atlantic, Trump offers relief: no more endless stress tests, faster mergers, and a friendlier tax code. If UBS moves, it could save hundreds of millions annually in regulatory overhead, funneling those gains into higher bonuses for its New York traders.
This is not isolated. Other European lenders are weighing similar shifts. The draw is clear: America's labor market, bolstered by reshoring, promises wage hikes for skilled workers in finance and tech. Entry-level analysts in Manhattan could see annual raises of 5 to 7 percent, outpacing inflation, as firms consolidate operations. Trump's team projects this will add 1.5 million jobs by mid-2026, many in high-wage sectors. Bessent, a hedge fund veteran who made his fortune betting on currency swings, sees it as a virtuous cycle: more capital inflows mean more lending, more investment, and fatter paychecks for the middle class.
But turn the lens southward, to the factories of Vietnam, the call centers of India, and the assembly lines of Mexico. Here, the same policies spell stagnation. Trump's tariffs, announced in early November and partially rolled back on commodities like beef and coffee just days ago to ease domestic inflation, still target manufactured goods with duties of 10 to 20 percent. The exemptions are tactical, aimed at grocery bills, but the core assault on electronics, autos, and textiles remains. Emerging markets, which supply 40 percent of U.S. imports in these categories, are set to take a direct hit. Early modelling by trade economists suggests significant downside risk to electronics exporters such as Vietnam. That translates to lost orders, idle workers, and frozen wages. Factory hands in Hanoi, earning around $300 a month, will not see the 3 percent gains economists once forecast; instead, vulnerable export hubs risk stagnation or decline if orders fall
India tells a starker story. Its IT services sector, which employs 5 million and fuels middle-class dreams, depends on U.S. outsourcing deals. Tariffs on components could inflate costs by 8 percent, prompting clients like JPMorgan to pull back. Wages in Bengaluru, stagnant at 4 percent growth since the pandemic, may flatline entirely. Mexico, Trump's neighbor and largest trading partner, faces the cruelest irony. Nearshoring boomed under Biden, with $35 billion in new factories. Now, 25 percent border duties threaten to unwind that. Maquiladora workers in Tijuana, averaging $450 monthly, could see real wages erode by 5 percent as U.S. buyers seek alternatives in the heartland.
This is the mirage: U.S. growth at the expense of emerging markets. Trump's plan, for all its talk of fair trade, accelerates deglobalization. Supply chains, painstakingly woven over decades, will fray as firms chase the lowest-risk path. The Atlantic Council tracks over 50 tariff actions since the inauguration, each chipping away at cross-border flows. J.P. Morgan Research now cuts its 2025 global growth forecast to 2.7 percent, with emerging economies bearing the brunt at 3.9 percent, down from 4.5 percent. Wages follow suit. While American finance swells, the global south's labor surplus grows, suppressing pay in export hubs. The International Labour Organization warns of a "lost decade" for developing nations if trade volumes drop 10 percent, as projected. Inequality widens not just within countries, but between them, echoing the K-shaped recovery we saw post-COVID: the top accelerates, the base stalls.
Bessent and his peers may dismiss this as collateral, but Americans are not powerless. Voters, consumers, and civic actors can exert pressure on Congress and the administration to ensure that trade policies and deregulation take global labor impacts into account, whether through public letters, petitions, or targeted campaigns. Citizens can influence corporate behavior by favoring companies that maintain fair labor practices abroad and by holding firms accountable for their supply-chain ethics. Engagement with NGOs and civic groups that monitor U.S. trade decisions offers another avenue to shape outcomes. In contrast, advocacy for multilateral frameworks promoting fair wages and sustainable trade- through U.S.-based organizations and think tanks - can reinforce American leadership and credibility. These efforts not only support workers abroad but also protect the United States’ legitimacy in the global economy, reducing the risk that its firms and policies provoke backlash.
Bessent's perfect storm is no inheritance from Biden. It is a deliberate gale, one that lifts American sails while grounding ships in distant ports. UBS may thrive in New York, but the workers it leaves behind in Zurich, and those it displaces in Asia, will pay the toll. Global finance cannot afford such zero-sum games. The storm breaks soon; better to seek shelter together than watch the divide grow.
Imran Khalid is a physician, geostrategic analyst, and freelance writer.
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