Trump re-election entrenches global instability
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Gabriel Rubin
WASHINGTON, Nov 6 (Reuters Breakingviews) -Donald Trump’s victory over his political opponent Kamala Harris ushers in a perilous new era for the United States and the rest of the world. The former president promised a “golden age for America” after his third election campaign produced his most convincing victory. But any short-term gains for corporations and investors must be set against his authoritarian instincts and willingness to further question the U.S.-led international order. That puts an already fraying global balance at even further risk.
Over the coming four years, businesses can expect a cascade of tax breaks, regulatory rollbacks, and favorable court decisions. The chances of Congress, which now includes a Republican majority in the Senate, raising the corporate tax rate above 21% during next year are now virtually nil; Harris wanted to raise it to 28%.
Spending cuts to pay for other tax reductions are likely, as well, although control of the House of Representatives remained up for grabs early on Wednesday morning. Divided government would make it harder for Trump to overhaul the Affordable Care Act, after Republicans failed to do so during his first term. Wall Street will cheer new appointees for major banking and markets regulators who are sure to be friendlier than outgoing President Joe Biden’s. And the crypto industry will likely get its long-sought regulatory legitimacy, a force multiplier for its potential growth. The dollar, U.S. stock futures and bitcoin all rallied in anticipation of Trump’s victory.
But broaden the scope, and a second Trump presidency has consequences well beyond a short-term sugar rush in financial markets. The former reality TV host – the first U.S. president to be convicted of a crime – has promised to go after his political opponents, including the media and business interests that may oppose his decisions. He has pledged to step up deportations and raids on companies that employ immigrant labor.
Around the world, American allies will have to deal with a president who has cozied up to enemies like Russia, has been skeptical of European alliances, and has weakened the fight against climate change. He promises to supercharge the growing confrontation with China, with 60% tariffs just the beginning of possible disagreements between the countries. He could strengthen Russian President Vladimir Putin’s hand in the war with Ukraine.
The new administration will also impose costs on the world’s largest economy. Trump’s obsession with imposing across-the-board 20% tariffs on all imports, even if modified, will directly transfer to higher prices for consumer goods. If he appoints a dovish or sycophantic Federal Reserve chair in 2026, inflation could return. If implemented, Trump’s policies would add nearly $8 trillion in new debt by 2035, according to the research outfit Center for a Responsible Federal Budget.
Trump on Wednesday thanked Elon Musk, who went all-in on Trump’s re-election. Promises that the Tesla TSLA.O co-founder will slice some $2 trillion from annual government spending shows the outlandishness of the plans: total discretionary outlays were $1.7 trillion in 2023. If Trump succeeds in rolling back Democrats’ climate legislation, emissions goals will fall further out of reach, causing untold environmental damage and putting U.S. companies at a disadvantage in developing renewable technologies.
Even greater than the financial fallout, though, will be the extent to which Trump undermines U.S. institutions. In a 2023 paper, Princeton University’s Layna Mosley examined the economic risks of democratic backsliding, including in the United States. Investors want long-term stability where they can count on legal accountability and fair treatment that doesn’t depend on which party is in power. Much about Trump’s next administration is hard to predict. But his return to the White House further undermines that stability – in the United States, and in the rest of the world.
Follow @Rubinations on X
CONTEXT NEWS
Republican Donald Trump won the 2024 U.S. presidential election, defeating Democrat Kamala Harris and capping a stunning political comeback four years after he left the White House.
“America has given us an unprecedented and powerful mandate,” Trump said on Nov. 6.
U.S. and European stock futures and the dollar surged, while U.S. Treasury yields shot to a four-month high. The euro fell 1.7% in early European trade.
Graphic: Trump’s tariff push continued under Biden https://reut.rs/4egRK84
Editing by Lauren Silva Laughlin, Peter Thal Larsen and Ujjaini Dutta
الأصول ذات الصلة
آخر الأخبار
إخلاء المسؤولية: تتيح كيانات XM Group خدمة تنفيذية فقط والدخول إلى منصة تداولنا عبر الإنترنت، مما يسمح للشخص بمشاهدة و/أو استخدام المحتوى المتاح على موقع الويب أو عن طريقه، وهذا المحتوى لا يراد به التغيير أو التوسع عن ذلك. يخضع هذا الدخول والاستخدام دائماً لما يلي: (1) الشروط والأحكام؛ (2) تحذيرات المخاطر؛ (3) إخلاء المسؤولية الكامل. لذلك يُقدم هذا المحتوى على أنه ليس أكثر من معلومات عامة. تحديداً، يرجى الانتباه إلى أن المحتوى المتاح على منصة تداولنا عبر الإنترنت ليس طلباً أو عرضاً لدخول أي معاملات في الأسواق المالية. التداول في أي سوق مالي به مخاطرة عالية برأس مالك.
جميع المواد المنشورة على منصة تداولنا مخصصة للأغراض التعليمية/المعلوماتية فقط ولا تحتوي - ولا ينبغي اعتبار أنها تحتوي - على نصائح أو توصيات مالية أو ضريبية أو تجارية، أو سجلاً لأسعار تداولنا، أو عرضاً أو طلباً لأي معاملة في أي صكوك مالية أو عروض ترويجية مالية لا داعي لها.
أي محتوى تابع للغير بالإضافة إلى المحتوى الذي أعدته XM، مثل الآراء، والأخبار، والأبحاث، والتحليلات والأسعار وغيرها من المعلومات أو روابط مواقع تابعة للغير وواردة في هذا الموقع تُقدم لك "كما هي"، كتعليق عام على السوق ولا تعتبر نصيحة استثمارية. يجب ألا يُفسر أي محتوى على أنه بحث استثماري، وأن تلاحظ وتقبل أن المحتوى غير مُعدٍ وفقاً للمتطلبات القانونية المصممة لتعزيز استقلالية البحث الاستثماري، وبالتالي، فهو بمثابة تواصل تسويقي بموجب القوانين واللوائح ذات الصلة. فضلاً تأكد من أنك قد قرأت وفهمت الإخطار بالبحوث الاستثمارية غير المستقلة والتحذير من مخاطر المعلومات السابقة، والذي يمكنك الاطلاع عليه هنا.
