While the world tries to deal with Donald Trump getting to be chosen US president‚ market analysts are beginning to take a gander at the ramifications of this for worldwide relations and exchange.
Sanisha Sanisha Packirisamy‚ economist at Momentum‚ said Trump’s win meant the US economy was expected to start looking inward.
“Mr Trump’s declared inward focus on US domestic stimulus‚ which is likely to incorporate massive transport infrastructure spend‚ as well as corporate and personal income tax cuts‚ should provide some focused support for construction and consumer related industries within the US‚ but its fiscal implications could be negative for the US sovereign bond market‚” Packirisamy said.
“While the full geopolitical ramifications are difficult to assess at this early stage‚ a full implementation of Mr Trump’s proposed changes to trade policies could result in a more isolated US economy as cross-border trade and immigration moderates.”
“If the economy backtracks on prior globalisation gains‚ overall growth prospects could weaken for the US economy‚ leading to capped gains on average American incomes. Given Mr Trump’s strong criticism of the North American Free Trade Agreement (Nafta) – which has been in effect since January 1994 and nearly eliminated tariffs between Mexico‚ Canada and the US – this could be renegotiated‚” she said.
She added that Trump had also been vocal on his view of currency manipulation by the Chinese and has proposed a 45% tariff on Chinese imports unless the the Chinese currency is allowed to float freely.
“With China accounting for 15% of total traded goods in the US between January and September 2016‚ Sino-US tensions could have significant negative global trade implications.” Packirisamy said Trump had previously accused the US Federal Reserve of being too political‚ expressing concerns that stock markets are in a bubble thanks to Fed policies keeping interest rates at ultra-low levels.
“Although increased uncertainty and volatility could derail a December interest rate hike scenario‚ Mr Trump’s earlier comments would imply that a more hawkish committee could replace the current Fed‚ particularly if an implementation of further tariffs raises the prospect of inflation.
“Fed chair [Janet] Yellen’s four-year term expires in January 2018‚ but we cannot rule out an earlier departure‚ particularly given Mr Trump’s public criticisms.”
The Presidency in South Africa has congratulated Trump on his victory over rival Hillary Clinton.
Zuma simply said that South Africa looked forward to working closely with the new administration in the United States in promoting peace‚ security and prosperity around the world‚ especially on the African continent.