As the United States approaches a potential second Trump administration, global observers are keenly anticipating the composition of the incoming administration and the realisation of campaign pledges. It is important to clarify the confusion and concentrate on the policies that may significantly influence the economy and markets as you invest with Ndovu. It is therefore important to consider the ideas and policies that President Donald J. Trump will implement before investing under Trump.
What To Expect before Investing Under Trump
Trade policy
Alongside his proposed universal tariff of 10% to 20% on all imports, Trump has adopted an assertive position on trade with China, suggesting tariffs of 60%. Although the initial rerouting of commerce was advantageous for Europe, universal tariffs would adversely affect the continent, exacerbating the decline in industrial production and hindering economic recovery initiatives. In a multipolar world, "tariff adversaries" such as Mexico, China, and Europe are expected to intensify their reactions to offset US pressure, perhaps resulting in a prolonged tit-for-tat that adversely affects sentiment and economic activity.
Taxation.
In a red sweep scenario, Trump's individual and corporate tax reductions from the Tax Cuts and Jobs Act of 2017, scheduled to expire at the end of 2025, will likely be rendered permanent during his second term. Trump may additionally lower the corporation tax rate for domestic output and exempt some types of revenue from taxation. He may reinstate the state and local taxes (SALT) deduction, abolish renewable energy tax subsidies, and implement substantial new tariffs.
Antitrust legislation.
The Justice Department and the Federal Trade Commission (FTC) have actively sought to obstruct mergers and acquisitions throughout President Biden's administration. Conversely, Trump is expected to adopt a more hands-off and deregulatory approach, and it is anticipated that he will pick a Republican to succeed FTC Chair Lina Khan. Trump has exhibited a predominantly negative perspective on Big Tech and would likely be cautious regarding sector consolidation.
Government expenditure.
We anticipate that fiscal expenditure would likely stay high under Trump. Although the Inflation Reduction Act received no Republican support upon its enactment in 2022, we maintain that a complete repeal is improbable, considering the fiscal stimulus is positively impacting sectors generally aligned with the Republican agenda, as well as numerous districts and states represented by Republican lawmakers in Congress. Defence expenditures may increase under Trump.
Geopolitics.
Trump and a significant segment of the House Republican Conference have exhibited diminished support for Ukraine and are likely to reduce aid to the country, thus compelling Ukraine to acquiesce to a resolution of the conflict that entails a de facto loss of land. Iran is expected to face heightened pressure under Trump. The United States' broader trend to the right may also support analogous changes observed in certain regions of Europe.
Insights
Trump's reelection presents a multifaceted situation for global markets; yet, we perceive his victory as bolstering the robustness of US assets while undermining those elsewhere.
Historical precedents suggest that we might anticipate a rather turbulent atmosphere characterised by considerable uncertainty throughout Trump's second term. However, the Trump 2.0 playbook will likely look quite different from Trump 1.0. A Trump victory may be perceived as a temporary advantage for markets, evidenced by a significant rally in risk assets; nevertheless, the long-term outlook may differ substantially.
This coming year will be a great opportunity to look into the markets since there will be a lot of movement and Ndovu should be your investment partner. Our team of experts are always ready to help you navigate through the different assets from ETFs, Gold, S&P 500, Money Markets and more you wish to invest in. Download the Ndovu app now available on Android and IOS and maximize on the potential market changes this coming year.
Disclosure:
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Disclaimer:
All ETF products are subject to risk, including country/regional, liquidity, and currency risks. Market prices of securities within the ETF may rise and fall, sometimes rapidly and unpredictably.
While ETFs provide diversification through exposure to a basket of securities, they do not eliminate the risk of loss. Diversification does not ensure a profit or protect against a loss. These are non-cis products and are registered by the SEC.
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