Donald Trump Presidency
Can it be! Trump President of united State of America! I suggest you get ready for it.
Like many, I could not believe that Trump candidacy can get even through the primaries. But here we are, he is only few points behind Hillary. Last night, I was watching his speech in Virginia and one can see he is changing his style and coming across more presidential. He dose not need to try hard. The American electorate does not want someone presidential and part of establishment. They have lost their trust on their political establishment (I can not blame them) and that’s Hillary’s main problem. All her life she has been part of this establishment. With Hillary you know what you’ll get, “continuity”, but the majority of Americans want a change. Her policies are fine and realistic but not exciting. Her slogan, “We are stronger together” what those this phrase mean? Yes we need all strength to get Hillary into the white house, but what’s in it for me the voter? What is going to change?
On the other hand Trumps campaign Slogan, “Making America Great again” is promising a big change. This slogan backed by Trump’s campaign promises, that any sane person would know they cannot be delivered, has made a resonance with the voters. They like what they are hearing and they are warming up to possibility of having Trump as their president. Finally it comes to who do you want to believe? Hillary talks sense, but people don’t believe her. Trump promises a heaven on earth, and we all want to believe it.
Is the American electrode ready and brave enough to take a chance with Trump?
I say yes.
In 45 days there will be enough of them to see Trump through to the White House.
American election is an Americans affair and it is for them to elect their next president. They are the ones who will face the consequence of their choice. We have no say in this election, but we (the world) also will be effected by their choice. Below I have outlined the key areas that will have an effect on people living outside USA.
Donald trump economic policy promises to deliver a high economic growth based on lower taxation, deregulation, reduction of the trade deficit, and changes to US energy policies.
Now can he deliver the super growth? Who can tell? But one has to assume that President Trump will try to bring about these policies and in doing so he will make a profound effect on the global economy.
International Trade Outlook:
US economy is the main driver of the global economy, so a high growth in US usually leads to higher international economic activity. But his promise of reduction of the American’s trade deficit ($800 Billion per year) can not be a good news for the US main trading partners, like China (-$343 billion defecit), Germany (-$74 Billion), Japan (-$67 Billion), Mexico (-$53 Billion), Canada (-$35 Billion), Ireland (-$26 Billion), South Korea (-$25 Billion), Italy (-$24 Billion), India (-$24 Billion) and more…
British cross atlantics trade with USA is in par, about $54 Billion either way. That cannot be said about the Chinese or Germans and the others. If Trump act on his promise of reduction of trade deficit and bringing back home the jobs lost in manufacturing, mining, steel, and so on, this should be worrying news for these nations.
The world has become dependent on the American’s dollar, and they have happily been lending them trillions of dollars to finance their consumption habit. But Trump promise of cutting down the trade deficit and the borrowing should be taken seriously; although many more before him have promised the same and none have delivered, but then none of them were like him.
US crude oil import from overseas has dropped from 14 million barrels per day in 2010 to 10 million barrels pre pay day in 2016 (source: EIA). In EIA’s Reference case projection (2015), petroleum consumption remains similar to current levels through 2040, and this is based on current policies. If Trump delivers on his campaign promises, like saving the coal industry, making more land (Outer Continental Shelf) available for oil and gas production, lift restriction on American energy increase, this means another major reduction on USA petroleum import.
So all those oil-exporting countries better to start recalculating their future budgets. As these policies are a lot easier to deliver compare to his trade ambitions, I guess we can expect the move on these policy in 2017. For those future traders, I will say be careful, we may be looking at oil price on decline for a foreseeable future.
Foreign Policy Outlook,
This is a difficult one to guess. Trump’s background as a businessman (old-fashion one), shows that he loves to drives a hard bargain with little consideration for the other party. This attitude is clearly apparent from his economic policy. He wants what he think is in the best interest of USA with very little concern about the rest of the world. Having said that, Trump is more of a negotiator than a businessman, and he believes that he can solve the world problems by negotiation and doing business. This is good, but I am sure the Washington establishment, defence lobby, oil companies, and other high stake players will teach him and bring him around and make him to understand. But I do not believe he will start any new wars and will resist more borrowing to finance more conflicts. Lets hope I am right.
My analysis and predictions are in no way to suggest the right or wrong of Trumps policies. This is the world trade outlook I expect under Trump’s presidency. Personally I think it is a lot better than what I expected before ready his site and doing the calculation. His presidency will be more effective than Obama’s, mainly due to the different chemistry of trump presidency and Washington reaction to it. Trump trade policy on one side of Atlantic and Brexit on this side will create a lot of uncertainty in the market for the next few years and it will be persistent as neither have any clue on how they are going to achieve their policies. I expect a lot of noise but not much action.