The Trump

10 November 2016, 07:47
Nkechi Sonia Kanu
Trump’s election campaign was strongly critical of trade agreements including the Trans-Pacific Partnership (TPP) deal and even NAFTA and claimed that China and Japan and other countries had benefited from “terrible” trade agreements that had hurt the American economy.  As such, the market fears that Trump will make it harder to trade, potentially hurting growth abroad and USA companies exporting to global markets. Trump also proposed a vastly different attitude to global relations.  He suggested NATO was broken and Saudi Arabia and other countries may have to pay for US forces to provide support.  On the other hand, he suggested that he would be able to defeat Islamic extremism with implied more aggressive US involvement.  In a broad sense, he suggested that the US might tend to withdraw from engagement in global affairs.  This might be seen as opening the door for China to boost its influence in the Asia region and Russia to exert more influence in Europe and the Middle East.  These policy notions, while not particularly well-formed, pointed to a riskier geopolitical environment that might lead to increased conflict and greater uncertainty weakening investor risk appetite. Related to these notions on trade and international relations, Trump proposed a tougher immigration policy specifically for Mexican and Muslims.  He also proposed tougher monitoring of Muslim communities in the USA to address risks of terrorist acts.  These policies might increase the USA as a target for extremist acts, both from abroad and radicalized USA citizens.  It is debatable whether Trump’s policies might generate more or less risk of global terrorism.  But they generate greater uncertainty over global terror risks and those risks in the USA. In a broad sense, the USA Election has left the USA perhaps the most divided in decades. With Muslims and Latinos feeling like outsiders this time more than African Americans. Trump is seen as the champion of white lower and middle-income Americans.  Having stoked these divisions, Trump will struggle to generate a unified nation.  Social unrest will be a threat to confidence and growth. There are a number of risks to growth in the USA and globally from a Trump presidency.  However, they are only risks and the time-line to any potential fallout is extended and uncertain.  On the other hand, there are a number of reasons to expect Trump’s more immediate policy actions to boost growth in the USA specifically.”
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