The Force of Change in the US
On the 20 January 2017, Donald Trump became the 45th President of the United States. The majority of U.S. citizens supported Trump essentially due to his protectionist agenda with the slogan “Let’s Make America Great Again.”
His election marks a new era for the U.S. and the rest of the world. Trump’s biggest legislative accomplishment, the tax cuts, came late 2017 though it may lead to inflationary conditions and the end of the nine-year bull market for the equities.
Trade agreements have been targeted from the beginning as the goal is to mainly secure US jobs from competitive countries. Donald Trump withdrew from the Paris Climate Agreement, but left the door open to re-engaging if the terms are improved for the United States. Moreover President Trump is changing America’s role in the global economy. The U.S. withdrew from the Trans-Pacific Partnership as Trump canceled the agreement for a sweeping trade deal with Asia that he once called a “potential disaster.”
Early March of 2018, Trump’s stormy announcement on implementing taxes on steel and aluminum upset the global community including traditional U.S. allies. The decision to raise steel import taxes by 25% and aluminum by 10% could hurt not only those industries directly, but also carmakers and construction firms which use the raw materials. Trump’s tariffs on metals are ‘like an atomic bomb’ for European firms.
The White House is now considering imposing tariffs, among other measures, on China for suspected intellectual property theft. It is now believed that Trump’s tariffs on Chinese imports could reach up to $60 billion and will target the technology and telecommunications sectors. It is important to note that President Donald Trump already imposed steep tariffs on imported washing machines from South Korea and imported solar panels from China.
Trump's administration has been marked by a series of exits from high-ranking officials. Some of the appointments that were expected to last for years have only made it a matter of days, ending in chaotic departures. An analysis of the rate of departures found that Trump's staff turnover is the highest from the five previous presidents and more first-year departures than any other president in at last 40 years. The White House has seen 24 departures in Trump’s first 417 days - a rate of around one senior position every 17 days.
Among the administrations’ policies is the weak dollar that could boost exports though analysts said it could halt the built up of the economic momentum since the president was elected. Moreover, Trump is proud of the stock market and from time to time he tweets on the 40% surge of equities since he took office.
Following the drama from the White House, any announcement that comes out creates volatility in the markets and investors look to grab those opportunities. Even Trump’s tweets can sometimes upset or boost the markets.