Donald Trump’s election victory over Vice President Kamala Harris is seen as a historic return to the White House, signifying a remarkable political comeback with potential significant implications for the global economy. In a speech to his supporters in Florida, Trump emphasized the mandate he received, predicting the onset of what he called “the golden age of America.” His campaign promises encompass a range of policies such as imposing tariffs, tax cuts, deregulation, and withdrawing from international agreements.
The extent to which Trump will implement these policies in his second term remains uncertain, but the repercussions are expected to reverberate worldwide. Analysts are closely monitoring the potential impact of Trump’s agenda on various sectors. Lizzy Galbraith, a political economist at Abrdn, highlighted the role of Congress in shaping the outcome of Trump’s policies, especially in areas like tax cuts, deregulation, and trade policy.
Regarding tariffs, Galbraith outlined two possible scenarios: using tariffs as leverage for negotiations or implementing them extensively as promised. Trump’s affinity for tariffs is evident in his past statements, where he described it as his favorite word and proposed significant tariffs on imports, particularly from China and Mexico. The European Union could also face consequences for its trade practices under a Trump administration.
Economists caution that universal tariffs could lead to increased consumer prices and reduced spending. Ben May from Oxford Economics emphasized the potential impact of Trump’s policies on trade, economic growth, and financial markets. Uncertainty looms over the implications of Trump’s stance on global conflicts and the subsequent impact on regional and global growth.
The EU is anticipated to face challenges under a second Trump presidency, with concerns over trade tensions and policy decisions. Analysts predict that Europe could be significantly affected by Trump’s policies, potentially leading to capital relocation and trade disputes. In Asia, particularly China, Trump’s victory is viewed as unfavorable, with expectations of increased volatility and market uncertainty.
Experts suggest that China may respond with stimulus measures to support economic growth and consumer confidence. Mitchell Reiss, a diplomat and fellow at RUSI, anticipates a continuation of tough policies towards China under Trump’s administration. The relationship between the U.S. and China is expected to remain complex, influenced by economic considerations and geopolitical tensions.
