So America has decided to elect a presidential candidate with no political experience, who has been declared bankrupt several times and who is a habitual litigator who allegedly according to some media outlets likes to get his own way by shouting down anyone who stands against him. Alternatively, they have elected a hardworking honest businessman and a shining example of the American dream, which he wants everyone else in the USA to share. White knight or global pariah – only time will tell.
His allegedly isolationist approach seems to be the flavour of the month, at least in 2016, with Trump’s campaign rhetoric mirroring that of the successful Brexit campaign. Seemingly high on hyperbole but light on specifics. Even Trump himself referred to his campaign as being Brexit +++. The question on everyone’s lips though is, does he actually have a plan and if so what is it? Trump often flip-flopped on his proposed policies during his campaign. While this at least keeps his options open it does mean there is now an even greater sense of economic uncertainty. The only thing we can be certain of is that Trump will put America first and that this could lead to a trade war with China, the EU and beyond.
The promise of tax cuts and jobs following a time of deep austerity is an easy vote winner. Delivering on that however may not be as easy as Mr Trump believes. Some commentators are already predicting a recession in the USA in 2017 caused by lower oil prices and higher import costs as trade negotiations bog down with key trade partners. A recession in the USA will inevitably percolate out to the EU and Asia. No matter how strong our “special relationship” is with the USA, the UK will not be immune.
In reality I suspect nothing much will change in the short term. It will be interesting to see how much of a free reign the Republican controlled Senate and House of Representatives allows Mr Trump to have.
The world of capital, growth and recovery we inhabit is rarely a stable and predictable environment. To be sure, the US election has thrown a curve ball into the mix but perhaps that only underlines the need for good advice when business circumstances change. We’ll wait and see whether our clients with US interests are overly impacted by the new President from either a capital fund or an advisory perspective.
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