Unraveling Trump's Triumph: Domestic and International Repercussions Following His Election Win

In just over nine years, Donald Trump is set to return to the White House for his second term, starting on January 20, 2025. While the identity of his economic minister remains a mystery, we can anticipate a series of policy shifts that could have far-reaching implications for the US and the global economy.

One of the key areas of focus will be trade. Trump has pledged to revisit his tariff policy, particularly towards Mexico and Canada, with a 25% tariff on all imports proposed. This could potentially reshape the trade landscape, as Vietnam, which currently accounts for almost 30% of the US market, may experience a significant drop in GDP growth if a blanket 20% tariff is imposed.

China, too, is not immune to Trump's tariff agenda. He proposed a 10% additional tariff on all Chinese imports when he takes office. This could lead to increased volatility in the FX market, with currencies like the Chinese Yuan, Mexican Peso, and Euro potentially favouring the US dollar. However, China may respond by expanding exports into local regions, potentially undermining domestic production in Southeast Asian countries.

The tech sector is anticipated to benefit from Trump's presidency due to his deregulatory stance. Big tech firms saw a surge in stock markets following his election victory in 2016, and this trend could continue. However, Trump has also pledged to repeal Joe Biden's executive order on AI, which establishes safety and security standards. This move could introduce uncertainty into the tech industry.

In the realm of climate action, Trump's administration is expected to pose a significant threat. His cabinet includes climate sceptics, such as Chris Wright, CEO of fracking services company Liberty Energy, as Energy Secretary, and Lee Zeldin as administrator of the Environmental Protection Agency. As a result, the US could increase its carbon emissions by 4bn tonnes equivalent (GtCO2e) by 2030.

Trump's proposals on immigration, such as the promise of the largest mass deportation in US history, could depress wages and growth. On the other hand, his promise of a "manufacturing renaissance" has been met with a positive response from the auto manufacturing industry, although economists warn of potential inflationary risks.

Cryptocurrency markets reacted strongly to Trump's victory, with Bitcoin reaching its highest-ever valuation on election day. Elon Musk is expected to play a key role in the new administration, potentially benefiting crypto markets.

The Federal Reserve, meanwhile, is keeping a close eye on inflationary indicators to determine interest rates over the next year. The Reserve's decisions could help mitigate some of the potential risks posed by Trump's economic policies.

Trump's second term is expected to be a period of significant change, with potential impacts on trade, the tech industry, climate action, and the economy as a whole. As we move closer to 2025, these developments will continue to unfold, offering a fascinating study in economic policy and its effects on the global stage.

Unraveling Trump's Triumph: Domestic and International Repercussions Following His Election Win