As the world is still recovering from ‘the shock of the year’ following Donald Trump’s victory at the US elections, economists and financial experts ponder what his populist presidency will mean for global trade and financial markets.
Trump focused his campaign on putting America first and making it great again, something analysts have interpreted as a move away from globalisation and another step towards protectionism and the selfish slogan of ‘everyone for himself’, God for all of us’.
“The world is entering a new, populist-led era, meaning a pull back from globalisation and a move towards more isolationist policies,” Peter Brooke, head of Old Mutual Investment Group’s MacroSolutions boutique, said this week, as news of Trump’s unexpected triumph shook financial markets and brought down the Mexican currency (peso) by 13%.
However, South Africa-based Brooke warned that a move away from globalisation and towards isolationist policies was bad for trade.
“This hampers global growth and we expect the world to remain trapped in limbo with low growth, low rates and low returns,” he said, acknowledging that all around the world, populists were gaining on both the left and right.
Populist Trump, who reports said was backed by millions of less educated people and disgruntled unemployed fellows who no longer believed in the establishment, has made some ‘extraordinary’ promises to boost people’s livelihoods.
But a cautious Rian le Roux, Old Mutual Investment Group chief economist, said: “Promises are one thing, but actual implementation is quite another. What Trump will and can actually do remains to be seen.
“The global macro-economic impact is still unclear, including what this presidency will mean for growth, inflation and global policy settings over the longer term.
“But, the dust will settle over the next few weeks and comments from elected President Trump in the interim will hopefully provide some more clarity.”
Photo: Newly elected U.S. President Donald J. Trump