OPINION

Published 16:27 IST, November 6th 2024

Trump re-election entrenches global instability

Donald Trump won the 2024 US presidential election, defeating Kamala Harris and capping a stunning political comeback four years after he left the White House.

Reuters Breakingviews
Gabriel Rubin
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Donald Trump wins | Image: AP
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Golden goose. Donald Trump’s victory over his political opponent Kamala Harris ushers in a perilous new era for United States and rest of world. 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 furr question U.S.-led international order. That puts an alrey fraying global balance at even furr risk.

Over coming four years, businesses can expect a casce of tax breaks, regulatory rollbacks, and favorable court decisions. chances of Congress, which now includes a Republican majority in Senate, raising corporate tax rate above 21% during next year are now virtually nil; Harris wanted to raise it to 28%.

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Spending cuts to pay for or tax reductions are likely, as well, although control of House of Representatives remained up for grabs early on Wednesday morning. Divided government would make it harder for Trump to overhaul 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 crypto industry will likely get its long-sought regulatory legitimacy, a force multiplier for its potential growth. dollar, U.S. stock futures and bitcoin all rallied in anticipation of Trump’s victory.

But broen scope, and a second Trump presidency has consequences well beyond a short-term sugar rush in financial markets. former reality TV host – first U.S. president to be convicted of a crime – has promised to go after his political opponents, including media and business interests that may oppose his decisions. He has pledged to step up deportations and raids on companies that employ immigrant labor.

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Around 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 fight against climate change. He promises to supercharge growing confrontation with China, with 60% tariffs just beginning of possible disagreements between countries. He could strengn Russian President Vlimir Putin’s hand in war with Ukraine.

new ministration will also impose costs on world’s largest economy. Trump’s obsession with imposing across--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 d nearly $8 trillion in new debt by 2035, according to research outfit Center for a Responsible Federal Budget .

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Trump on Wednesday thanked Elon Musk , who went all-in on Trump’s re-election. Promises that Tesla co-founder will slice some $2 trillion from annual government spending shows outlandishness of plans: total discretionary outlays were $1.7 trillion in 2023. If Trump succeeds in rolling back Democrats’ climate legislation, emissions goals will fall furr out of reach, causing untold environmental damage and putting U.S. companies at a disvantage in developing renewable technologies.

Even greater than financial fallout, though, will be extent to which Trump undermines U.S. institutions. In a 2023 paper, Princeton University’s Layna Mosley examined economic risks of democratic backsliding, including in United States. Investors want long-term stability where y can count on legal accountability and fair treatment that doesn’t depend on which party is in power. Much about Trump’s next ministration is hard to predict. But his return to White House furr undermines that stability – in United States, and in rest of world.

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Context News

Republican Donald Trump won 2024 U.S. presidential election, defeating Democrat Kamala Harris and capping a stunning political comeback four years after he left White House. “America has given us an unprecedented and powerful mandate,” Trump said on Nov. 6. U.S. and European stock futures and dollar surged, while U.S. Treasury yields shot to a four-month high. euro fell 1.7% in early European tre.

16:27 IST, November 6th 2024

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