Trump In The White House: What's Next For The People, Economy, And Environment?

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It's nearly upon us.

Soon Donald Trump will be inaugurated as the 45th President of the United States in a grand ceremony in Washington DC. The 58th Presidential Inauguration happens at noon local time (5 pm GMT) on Friday 20 January.

Presidential inaugurations are a daylong ceremony. Hundreds of thousands of people are expected to visit the District of Columbia, though spots at the official events are, of course, limited. Traditionally, the day begins with a morning worship service. After that, the new vice president takes the oath of office, followed by the president. Trump's 35-word swearing-in - will happen on a 10,000 square foot specially-built platform in front of the Capitol that holds 1,600 people. After they’re sworn in, Trump will give his inaugural address speech. Once evening falls, the presidential family will attend several formal events around town, including the Inaugural Ball.

While the presidential inauguration is a day of pomp and ceremony, and intrigue, dictated by tradition stretching back decades which makes it an all-American parade, most people agree that Donald Trump will not exactly be a traditional president.

As a candidate, the President-elect made bombastic statements which would spell a dramatic shift in American foreign policy. Markets have struggled to predict what a Trump administration could mean for the economy, and his comments on the environment could have profound implications for the planet as a whole.

So, how is he going to Make America Great Again? And how will his election affect the world? We did a little research for you and compiled the popular analysis predicting the prospective impacts of Trump's presidency on the global economy, politics, and the environment:

1. Global economic impacts

If Trump’s aggressive rhetoric on trade and protectionism is backed up by action this could have a domino effect on commerce around the world.

The potential for trade disputes with large partners, such as Mexico or China, poses a risk of disruption to global supply chains, which would weigh on corporate profits, trade, and global economic activity.

“Trump might turn out to be a double-edged sword for global growth. Although his preference for policy easing will help to stimulate the world’s largest economy, any wider benefits could easily be undermined if his aggressive protectionist rhetoric is backed up by action.” Michael Henderson, Lead Economist

Over the long term, Trump’s policies might also threaten America’s standing as the global financial hegemon – and hence the dollar’s status as the world’s reserve currency.

High Chance US Dollar will weaken vs Pound, Euro, and Yen following Trump inauguration.

Donald Trump will be inaugurated as the next US President on January 20th and so far the dollar has risen strongly thanks to his manifesto that includes pro-growth fiscal policy, overseas capital repatriation policies, and trade protectionism.

"The dollar rally is being driven by enormous investor expectations that the relatively strong US economy will accelerate even further under the leadership of Donald Trump who is expected to stoke growth through fiscal stimulus and deregulation. Mr. Trump’s policies will take months to be put into effect, but in the meantime, the markets will need to key off the US data. Given the very high expectations, the possibility of disappointment is high," says Boris Schlossberg at BK Asset Management in New York.

History shows the US Dollar virtually always moves in the same direction after the inauguration of the new president on January 20th.

But will the rally continue?

There is a statistically significant probability that the dollar will depreciate after the January 20 inauguration and for the two months that follow.

Nordea Market’s Head of FX Strategy Martin Enlund suggests that either of two things will happen – the current bullish consensus will be wrong, “at least temporarily,” or that, “this time it’s different,” and Trump’s unusual policy agenda will keep the dollar rising.

2. Implications on the world politics.

Mr. Trump has been particularly critical of President Barack Obama's foreign policy, calling it a "complete and total disaster" more than once.

He plans an "America-first" strategy, which includes threats to walk away from NATO allies if they fail to carry more of the cost of protecting America and themselves.

He has suggested that Japan and South Korea should have nuclear weapons.

His relationship with Russian President Vladimir Putin has been scrutinized at length.

He has spoken favorably of the Russian leader and suggested the two countries would "get along well."

Europe during Trump's presidency:

Prospects for concluding the Transatlantic Trade and Investment Partnership (TTIP) between the US and EU were already extremely poor, but in light of Trump’s anti-trade platform, the deal stands virtually no chance of being agreed.

“Even if Trump turns out to be a more moderate president than candidate, his ‘America first’ stance will be a massive headache for European leaders." Florian Otto, Head of Europe Research.

Trump’s success will embolden populist anti-establishment parties across Europe, particularly the French Front National, which also seeks to upend French politics when the country elects a new president in April/May 2017. While the shock victory will strengthen the FN’s confidence, it also holds the potential to mobilize the support of centrist parties should Trump’s presidency get off to a chaotic start.

Trump vs. Latin America:

“The relationship with Latin America will be highly unpredictable, but the fact that the region does not pose a geopolitical threat to the US means it will not gain prominence under the next administration. However, a spike in US protectionism will hit the main regional economies and could help fan a resurgence in nationalist, anti-American sentiment ahead of key elections in Argentina, Brazil, and Mexico.”

- Jimena Blanco, Head of Latin America Research

Given that, Mexico has the most to lose if Trump acts on his promise to pull out of the NAFTA agreement, as such a move would kill its export based economy. However, putting an end to NAFTA would be unpalatable for US exporters and intense lobbying by US companies may moderate Trump’s stance on this issue.

Middle East:

Trump’s proposed a temporary ban on Muslims entering the US will put relations between the US and most of the MENA region on the worst possible footing. Trump’s position on the Israeli-Palestinian conflict will be a wildcard, with the next US president declaring himself ‘neutral’ on the issue. Ultimately, however, foreign policy – particularly in the Middle East – is very unlikely to be among Trump’s key priorities.

“The reality of a Trump presidency will be met with near universal alarm across the Middle East. Aside from the very real threat to the nuclear agreement with Iran, the most immediate impact will be a reinforced sense of fear among US allies that the country is disengaging from the region and their interests.” - Torbjorn Soltvedt, Head of MENA Research.

One possible exception will be the fight against the Islamic State. A lot will depend on the success of ongoing operations against the group during the rest of 2017, but closer coordination between the US and Russia is a likely outcome next year. While this could place the group under greater pressure, an aggressive US-Russian operation also risks polarizing the conflict in Syria and Iraq further.

Asia:

The biggest source of tension between Beijing and Washington under Trump will be bilateral trade. The imposition of punitive trade tariffs would hurt Chinese exporters, particularly in the electronics sector, and it will likely result in tit-for-tat trade barriers being imposed by Beijing.

“Trump’s pledge to bring jobs back to America spells bad news for Asia, the world’s primary manufacturing hub. If the new president reels back US commercial and strategic interests in the region, expect China to grab the opportunity to shore up its position as chief power broker.”

 - Guo Yu, Head of Asia Research

3. Trump vs. Environment:

2016 was the third year in a row that global temperature records were set, while ice coverage at both poles reached record lows.

Records are being set at an accelerated pace. The warming effect of ice melting is self-reinforcing. The more ice that melts, the more ocean is exposed, the more water vapor there is. Water vapor acts as a greenhouse gas, trapping heat.

Unfortunately, matters are set to get worse. Donald Trump is about to be sworn in as president of the United States and will appoint a climate denier as head of the Environment Protection Agency.

Is the Arctic warming up for Trump?

While Trump says Global warming is a HOAX, this Christmas, the Arctic had a heatwave, scoring record high temperatures, even in the dark. A chunk of ice the size of the United Kingdom thawed due to the warmth.

Just days after the Paris Agreement on climate change came into force, the election of Donald Trump is a nightmare scenario for those wanting to advance the world’s decarbonisation pathway. A Republican-controlled Congress is unlikely to stand in the way of his plans to strip back domestic environmental regulation and pull out of the agreement.

“Tackling climate change was already a tough ask before the US elected a man who appears to believe it’s all a hoax. But physics hasn’t changed overnight, global ambition remains unaltered: this isn’t the death knell for environmentalism it’s been made out to be.” - Will Nichols, Senior Analyst – Environment and Climate Change.

The problem is, the impacts of climate change can be even worse than we think.

Most of our assumptions have been based on the expectation of incremental change, with sea levels rising by centimeters over the next hundred years or so. A recent report by the Intergovernmental Panel on Climate Change has global sea levels rising at less than a meter by 2100 on the most pessimistic estimate.

These effects are likely to become far worse. Crop yields will diminish. A review of 130 studies suggests that one in six species faces extinction. A review of over 600 studies suggests that the warming of oceanic waters will cause "species collapse from the top of the food chain down."

However, the falling cost of renewable technologies makes green investments more economically viable with each passing year. These cost savings may prevent such investments from being dropped in the absence of federal support.

States and cities such as California and New York City are likely to continue to pursue strong carbon reduction policies regardless.

If the US reverts to a more carbon-heavy energy mix, China, India, and other nations have less of an incentive to cut their emissions, which in turn brings forward the risk of dangerous climate change outcomes: Filthy air, rising seas, and ongoing droughts...

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