A second Trump term is not good news—either for the US or the world
Subscribe to enjoy similar stories. NEW DELHI : Former US president Donald Trump looks set to return to the White House, having secured 267 electoral votes, according to the Associated Press. The Republicans have also won a majority in the Senate.
This is not good news for either the US or the world. Trump has promised, besides cracking down on illegal immigrants, to cut taxes, impose steep tariffs on imports, stop the war in Ukraine in one day, allow Israel to complete its job in the Middle East, backtrack on American commitments on climate change, and force American allies in Europe and Asia to take greater responsibility for their own defence and security, so as to reduce the US fiscal burden for 'defending the free world’. Stock market investors are cheered by the prospect of lower corporate and income taxes.
Expect American stock prices to go up in the short term. The short-term prospects for US growth are positive, and those for inflation are muted. The Federal Reserve should be expected to go ahead with its interest rate cuts, boosting stock prices and encouraging more funds to flow to markets abroad, including India.
However, medium-term prospects are less bright. Trump’s tax cuts and giveaways will widen the fiscal deficit and create excess demand that pushes up inflation. Across-the-board tariffs on imports will further boost prices and reduce the availability of cheap goods, especially if Trump goes ahead with his threat of levying a 60% import duty on imports from China.
A curtailed supply of legal or illegal immigrants into the US would put pressure on the labour market and raise wages, adding another layer of inflation pressure. Trumpian tariffs would invite retaliatory measures by trade partners. A trade
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