2024 Election Super Cycle: The Impact of the US and Other Global Elections on Business, Investment and Economy
In this extensive panel discussion, experts analysed the reasons behind Donald Trump’s decisive electoral victory and the implications for both the United States and the global community. They delved into themes of political dissatisfaction, economic realities, and the anticipated "America First" policies that will shape Trump's second administration.
Key Themes and Insights:
1. Reasons Behind Trump’s Victory
- Widespread Dissatisfaction: A significant majority of Americans believe the country is on the wrong track, with 73% expressing dissatisfaction. Historically, such widespread discontent often leads to the incumbent party’s loss, contributing to Trump’s win.
- Shift in the Working-Class Vote: Trump successfully captured the working-class vote, a demographic that once largely supported the Democrats. The panel highlighted the Democrats' focus on urban, educated voters ("people who shower before work") and their neglect of blue-collar workers.
2. Expectations for Trump’s Second Term
- Consolidation of Power: Trump is anticipated to be one of the most powerful U.S. presidents, controlling the House, Senate, and Supreme Court. This administration will be more ideologically aligned with his "America First" agenda, eliminating previous checks like the so-called "deep state".
- Prepared for Action: Unlike his first term, Trump's team has spent years planning, with over 300 executive orders ready to be implemented across various sectors, including immigration, trade tariffs, fintech, and blockchain.
3. Economic Realities and Perceptions
- Economic Paradox: Despite voter dissatisfaction, the U.S. economy is performing relatively well, with 3% growth, low unemployment, and near-target inflation. However, perceptions lag behind economic recovery, affecting public sentiment and voting behaviour.
- Global Tariff Impact: Trump’s proposed tariffs, especially a 60% tariff on Chinese goods, could slow growth globally. Retaliatory tariffs and a potential global economic slowdown are anticipated, creating a ripple effect that impacts countries like China, Japan, and South Korea.
4. Geopolitical Implications
- U.S.-China Relations: Trump’s policies will likely escalate tensions with China, including higher tariffs and stricter trade measures. The impact could slow China’s economic growth, complicate global supply chains, and lead to widespread retaliatory measures.
- Concerns for Allies: Countries like Japan and South Korea are scrambling to adapt. Japanese Prime Minister Ishiba, unlike his predecessor Abe, lacks the same influence and personal rapport with Trump, complicating negotiations. Trump has also demanded that allies pay more for U.S. military support.
5. India’s Complex Position
- Optimism and Concerns: While India sees potential benefits from Trump’s hard stance on China, it is wary of tariffs and immigration policies that could affect trade and the Indian diaspora. Despite personal rapport between Trump and Modi, India must navigate a complicated geopolitical landscape.
- India’s Balancing Act: India maintains strategic independence, engaging with diverse global powers, including Russia and China. The panel emphasised that India is unlikely to be a formal U.S. ally but will continue to seek economic and geopolitical advantages.
6. Implications for Southeast Asia and Decoupling
- No Unified Policy for Southeast Asia: The Trump administration will focus on bilateral relationships rather than multilateral strategies, treating countries based on trade deficits and other metrics. Vietnam, for instance, could face tariffs due to its trade surplus with the U.S.
- Decoupling from China: The panel discussed the challenges and extent of U.S.-China decoupling. While it has progressed more than expected, complete decoupling remains complex. Southeast Asia and India have benefited from shifting supply chains but must prepare for potential economic disruptions.
7. Uncertainty and the Future of Global Order
- Symbolic Moves and Volatility: Trump’s administration may make high-profile, symbolic decisions, especially on immigration, to satisfy his base. The inconsistency and unpredictability of Trump’s policies remain significant concerns.
- Transactional Geopolitics: The panel emphasised the shift towards a transactional world order, with countries prioritising self-interest over alliances and multilateral cooperation. This approach could reshape traditional military and trade alliances, leading to a more fragmented global landscape.
Closing Thoughts
The panel concluded with reflections on the unpredictable nature of Trump’s leadership and the global impact of his policies. Experts stressed the importance of watching key appointments, trade decisions, and geopolitical strategies in the coming months. The overarching message was clear: Businesses and governments must prepare for a more volatile, transactional, and uncertain world order.
Speakers:
- Barkha Dutt, Television Journalist & Author, MoJo Story
- Clay Chandler, Executive Editor, Asia, Fortune
- Dr. Gillian Tett (speaking virtually), Columnist and Member of the Editorial Board, Financial Times
Moderator:
- Steven Okun, Chief Executive Officer, APAC Advisors & Senior Advisor, GPCA, Global Private Capital Association