On July 8, 2024, in the production workshop of a textile company in Binzhou, China, a worker was making textile export orders.
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Donald Trumpof election victory The election of Vice President Kamala Harris marks a historic return to the White House — an extraordinary political comeback that could have huge ramifications for the global economy.
Earlier Wednesday, Trump addressed his supporters in Florida explain “Unprecedentedly powerful mandate” will usher in “America’s Golden Age.”
The former president’s litany of campaign promises include high tariffs, tax cuts, Deregulation and push Withdraw from major global agreements.
Analysts said it was difficult to determine the extent to which Trump would seek to implement such measures during his second four-year term, but the consequences of any measures would have clear repercussions around the world.
Lizzy Galbraith, a political economist at asset management firm Abrdn, said it remains to be seen exactly what kind of presidency investors can expect when Trump returns to the White House.
“Congress has a very important role to play in this,” Galbraith told CNBC.European Squawk Box“Thursday.
“If Trump does have unified control of Congress, which seems likely and is what we expect to happen in the coming weeks and days, then he does have greater latitude to implement his cuts. tax agenda, such as his deregulation agenda, but we may also see some elements of his trade policy.”
Regarding tariffs, Galbraith said there are two schools of thought. Trump can either try to use them as bargaining tools to extract concessions from other parties, or he can follow through on his promises and implement them more broadly.
Trump’s favorite words
Trump has previously descriptive “Tariff” became his favorite word, calling it “the most beautiful word in the dictionary.”
To boost revenue, Trump suggests he could implement package of measures 20% tariff Imposing tariffs on all goods imported into the United States up to 60% For Chinese products and a Up to 2,000% On vehicles manufactured in Mexico.
Meanwhile, for the European Union, Trump said the 27-nation bloc would pay “big price“Because not enough U.S. exports are being purchased.
Former US President Donald Trump arrives for a “get out the vote” rally in Greensboro, North Carolina, United States, Saturday, March 2, 2024.
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“Now, I think it’s worth pointing out that we do think that in any scenario where Trump uses tariffs regularly, his primary focus is going to be China. And we don’t see Trump’s secondary tariff commitments — — that’s the baseline tariff, which will hurt European companies — because that’s entirely feasible,” Galbraith said.
She added: “So our base case is not necessarily that you see something like baseline tariffs really harming European goods, although it’s still possible that specific European products will be affected.”
Analysts have warn Trump’s plan to impose widespread tariffs is likely to raise prices for consumers and slow spending.
Europe
Ben May, head of global macro research at Oxford Economics, said that Trump 2.0 may have limited direct impact on economic growth in the short term, “but it masks the significant impact on trade, growth composition and financial markets. “
For example, May said that if the more radical aspects of Trump’s policy agenda were adopted, particularly on tariffs, the impact globally would be “very large.”
“A key unknown is whether a clean sweep will increase the risk that the Trump administration will pursue more extreme policy measures, such as larger, less targeted tariffs,” May said in a research note.
He added: “Uncertainty about Trump’s stance on conflicts in Ukraine and the Middle East also increases the risk of greater instability in both regions, which could have consequences for regional and global growth.”
The prospect of a second Trump term as president has long been seen as a negative for Europe and the EU more broadly.
However, analysts at Signum Global Advisors said in a research note on Wednesday that “the significance of this fact remains underappreciated.”
Indeed, they argue that several factors mean the EU could be the “biggest loser of a second Trump era”, citing trade tensions, continued frustration with key European policy decisions and Trump’s possible desire to Great America’s advantages in attracting capital for relocation.
Asia
Analysts at Macquarie Group said on Thursday that on the face of it, Trump’s election victory was “bad news for Asia and China in particular,” but the region was better off than it was in 2016, when Trump won the White House. “better prepared”.
On June 7, 2024, a cargo ship was sailing to a foreign trade container terminal in Qingdao Port, Qingdao Port, China.
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Analysts at Macquarie Group said in a research note, “A key tenet of Trump’s campaign was to increase tariffs. Although there are ample signals, the headwinds that may sweep across Asia, especially China, should It will heighten volatility and compress multiples as uncertainty prevails.”
“The counterbalance to this is likely to be an acceleration of China’s stimulus measures,” they added. “The Chinese government has outlined ambitions to support economic growth at the 5% level and address issues in the housing market to support domestic consumer confidence.”
Mitchell Rice, an American diplomat and distinguished fellow at the Royal United Services Institute (RUSI) think tank, said Trump’s strategy may be different this time.
“I think President-elect Trump has said that he wants to raise tariffs on China again until the playing field is leveled,” Rice told CNBC’s “Squawk Box Europe” on Thursday.
“What was interesting the last time Trump won was the number of China hawks in his administration. It was a very tough one in terms of personnel and how they viewed China as a rival to the south and an expansionist The government’s actions in the China Sea are contrary to the values of the United States and those of our friends and allies around the world,” he continued.
“So, I don’t think that’s going to change. I think our economic interaction with China may mitigate that a little bit, but I think it’s going to be a complicated relationship going forward.”
