If Donald Trump wins the presidential election, the global economy could be in for a rough ride. Many experts are convinced it would face a challenging fate. According to Reuters, citing analysts’ studies, the Republican’s tariff policies could disrupt the global financial system. The potential victory of the billionaire in the upcoming US election has stirred serious concerns about the future of the world economy.
Experts interviewed by Reuters warn that a second Trump presidency could “upend the global finance system with massive tariff increases, trillions of dollars more in debt issuance, and a reversal of work to fight climate change in favor of more fossil fuel energy production.”
Kazuo Ueda, head of the Bank of Japan, commented that leaders from various countries are worried about the rising uncertainty over who will become the next US president and what policies they will pursue.
Previously, Mehmet Simsek, Turkey’s finance minister, noted that further increases in the US budget deficit would mean higher debt, leading to high long-term interest rates. Against this backdrop, the dollar would likely strengthen significantly. “High long-term interest rates in the US and a strong dollar don't serve emerging markets well,” Simsek emphasized.
Many analysts and market participants are anxious about a possible trade war between the US and the European Union, in which, according to Germany’s finance minister, Christian Lindner, there would only be losers. Lesetja Kganyago, head of South Africa’s central bank, agrees, predicting that a tariff standoff would drive up prices and worsen the fight against inflation.
Reuters also reminded that Trump has vowed to introduce a 10% tariff on imports from all countries and a 60% duty on imports from China.
Earlier, analysts at The Wall Street Journal forecast a sharp rise in inflation in the United States after the election. The most concerning for experts are Trump’s plans, including new tariffs on imported goods, worker deportations, and pressure on the Federal Reserve to lower interest rates.
