If only a few days can Donald Trump have been selected as America’s next president.
While a Hillary Clinton victory in the mainly will mean “business as usual” and relatively small changes for business, industry, labor, tax and public spending, are associated with far more uncertainty as to how Trump will throw about on the policy and what consequences it gets.
In a note taking chief analyst Erik Bruce at Nordea Markets for themselves what are the consequences of the united STATES, and the choice can get for the world economy:
1. Full trade war?
Bruce believes Trumps trade policy is probably the area where he can affect the world economy the hardest.
Trump’s main point is that trade kills american jobs. Cheap imports and outsourcing has been blamed for many groups has been hanging in the velstandsutviklingen.
Bruce shows that Trump has used the expression that that he will “tear in pieces” the existing trade agreements.
He points out that within the foreign and trade policies has the president more freedom to act than otherwise.
– A straffetoll in the order of magnitude Trump has mentioned, will affect China and Mexico hard, and in all probability, nations will respond with straffetoll and other handelshindre on american goods. Thus also will the united STATES be hit hard by the measure. China and Mexico account for a quarter of the Us foreign trade, writes Bruce.
– a Bit like in the 1930s
That there may be a full trade war is also something Hege Medin, senior researcher at NUPI, consider that a worst-case-scenario.
She points out that Trump has gone out against trade agreements – that he is against Stillehavsavtalen (HTTP) as the united STATES has negotiated, that he is skeptical about a possible agreement between the EUROPEAN union and the united STATES (TTIP) and that he is in the worst case, have the desire to change the Nafta agreement.
Nafta agreement is a frihandelsavtale between the united STATES, Canada and Mexico.
at the same time he has said that he will increase tariffs, including against China.
It can lead to a trade war where countries build up handelsbarrièrer, which can have serious consequences for the world economy. It is a bit like in the 1930s, when there was a period of increased protectionism that worsened the economic situation, ” she says.
2. Increased financial turbulence and weakened growth in the global economy
Several times has Trump proposed sharp tax cuts, but from other things he has said, there is no corresponding cut in government spending, points out Bruce in the note.
– Attempt to calculate the effect of what he has said suggests a sharp increase in the public deficit in the next few years, he writes.
Thus will national debt increase, which will lead to increase in the key rate, which also will lead to greater issuance of government bonds.
– Both speaks for a relatively sharp increase in long-term interest rates, not only in the united STATES. Rising long-term interest rates and increasing uncertainty about developments in the u.s. government debt is sustainable will probably give increasing financial turmoil and reduced risikovilje. It will be able to weaken growth in the world economy, thinks Bruce.
That growth will be weakened, is also something the british forskningsfirmaet Oxford Economics has come forward to, also in the light of the increased customs duty rates:
the Growth in the Us economy will slow to 0.3 percent annually, which is the worst since the financial crisis, mean the british.
Moody’s Anaytics chief economist Mark Zandi, who was the economic advisor for John McCain when he was a presidential candidate, believes that the budget deficit may actually cause recession in the u.s. economy, according to CNBC.
at the same time shows research from Oxford Economics that economic growth globally will go down to 2.2 per cent annually if Trump becomes president, against the current forecasts that are on the 2.9 per cent.
3. Wages and prices to rise
Something that has been a central theme in the election, Trump’s statements about migrants. Here he has both stated that muslims should be denied to immigrate to the united STATES and that the 11 million illegal immigrants should be thrown out of the country.
– In a situation where unemployment in the united STATES is approaching the affected area with it to throw 11 million immigrants provide the labor shortage, declining production and increasing wages and inflation, thinks Bruce.
He believes that this inflation rate will result in rising long-term interest rates, and that this, together with the financial turmoil will cause significant effects beyond the Us borders.
In a blog in the Washington Post also pointed out that the Trumps politics will give wage – and price inflation. Here are both tollbarrièrer and expulsion of immigrants who reasons that this will happen.
4. The market’s response to Trump-says
A last element Nordea Markets-analyst pulls-up is how the market will react when the Trump possibly being elected president.
He thinks it may be it be red number on the stock exchanges.
But the turmoil need not be long-lasting. As at the Brexit-the vote is it possible the situation calms itself after a few days and the markets are waiting to see what Trump actually want to do, he writes.
What the market thinks about the presidential election, is something that is been investigated.
During the first debate between Hillary Clinton and Donald Trump over a month ago triggered what was referred to as the Clinton-says the positive impact on several financial markets.
On the markets in the united STATES, the united Kingdom and Asia increased the price of crude oil and the currency of the United states ‘ closest trading partners, Mexico and Canada went up.
This displays the surveys done by Justin Wolfers, an economist at the University of Michigan and Eric Zitzewitz, an economist at Dartmouth College.
– This is the enkelthendelsen in this year’s election campaign that has had the greatest consequences, is the name of the article to the two economists.
