Trump, Tiktok and the new ‘America First’ presidency
Could the UK benefit from a Trump Presidency?
Fourteen days into the year and the world holds its breath, as Trump prepares to retake control of the White House with a very different policy agenda to Biden. Here is what we know so far about what he plans:
- Tax cuts are planned or extended, which are to be achieved through cutting Government spending. Already DOGE has been formed and Musk has targeted $2 Trillion in savings. Environmental programs are expected to be cut.
- Crypto is to be deregulated. With a new appointee at the SEC who is a crypto enthusiast, expect deregulation here to enable the USA to become the global leader in this space.
- Tariffs to be raised on companies importing into the USA. For example, 67% of cars manufactured in Mexico, are exported to the USA, from companies such as Toyota, VW etc. Similarly the EU has a significant trade surplus with the USA. Trump sees a trade deficit as ‘losing’ so expect him to penalize countries with a trade surplus.
- Greater pressure will be brought to bear on the Federal Reserve to keep interest rates low, even at the expense of higher inflation. Over time, this approach could lead to pressure on the dollar and see a greater move to commodities. Gold for example is already at record highs, but is forecast to go higher.
- ICE is to be strengthened and targeted to remove all illegal immigrants, even those without criminal records who have been in the country since being children. On top of that public schooling will be prohibited to children who are not US nationals. It is estimated the total number of illegal immigrants in the USA is 12 million.
- Drilling will be expedited and environmental protections to enable it will be stripped away. Meanwhile LNG export restrictions are to be lifted. This should lead to a boon for the Energy sector and the price of oil & gas should fall as a result.
- European countries within NATO are to be told to up spending on defense to 5% of GDP or risk the US diluting its commitment to Article 5. For countries who are increasing their spending significantly (such as Poland) the key beneficiary will be US Defense companies.
- China will be the centre point of foreign policy, hence recent comments regarding Greenland and Panama, as both are within the North American continent and receiving Chinese investment, which the Americans perceive as a security threat within their sphere of interest.
In terms of the economy overall, the USA should therefore continue to outperform other G8 countries, as the combination of tax breaks, deregulation and energy sector growth acts to boost GDP. However, the risk Trump faces is that his policies will be highly inflationary. For example, the plans involving mass deportation, where the majority of the jobs are being performed in the low wage economy. If employers no longer have access to this labour pool, inevitably they would increase costs, which has inflationary implications across Consumer Goods & Services.
The changes to how the SEC will handle crypto are interesting, and could well result in New York becoming the global centre of crypto. Also with Eric Adams now appointed as Mayor of the city, as a renowned crypto enthusiast, plans are afoot to introduce tax breaks along with the deregulation, so to make crypto more attractive to organize within the city, and the deep capital markets already in place give it natural advantages few other cities can compete with.
Finally, at a time when the geopolitical landscape is fraught, Trump risks alienating allies within Europe over NATO funding and his bombastic talk regarding Greenland, leaving the USA isolated at a time when the risk to Taiwan is increasing. And For clarity, given over 50% of all advanced microchips, used in everything from mobile phones and computers to military hardware are manufactured there, put simply, the west cannot risk Taiwan falling. Yet the current projections are that China will be in a position to take the Island during Trump’s presidency.
For the UK trying to navigate a course which entails close relations with both the USA and EU, there are some clear flashpoints, between the proposed tariffs which are planned, along with the US demands on defense spending increasing. None of this will be received well in Brussels, Paris or Berlin. The challenge that Starmer faces as that whilst his personal politics are closer to those of the European nations, their growth is stagnant, and has been for decades when compared to the USA. With the UK no longer within the EU, will there be an opportunity to negotiate closer economic ties with the US, with Trump at the helm? If so, that could be the golden ticket for a Government struggling to come up with a plan for how they create economic growth, at a time when the country is at risk of recession.
The international dimension is part of what we will be examining, at our exclusive event in London on February 18, which will be analysing all the industries within the UK economy and how they are performing. The session will be moderated by Ann Swain, Chief Executive of APSCo, and feature insights from Kalpesh Baxi, Partner at Baxfield and former SThree executive, as well as Matt Gallivan, Head of Sales at JobAdder.
This event is a must-attend for recruitment professionals looking to analyze 2024 trends and gain actionable insights for the year ahead. Spaces are limited, so we encourage you to register now to secure your place!
The data referenced above has been sourced from Vacancy Analytics, a cutting-edge Business Intelligence tool that tracks recruitment industry trends and identifies emerging hotspots. With 17 years of experience, we have a deep understanding of market activities in the UK and globally.
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