Bob Baur
On January 20, 2017, Donald J Trump was inaugurated as the 45th U.S. president. The implications of his subsequent actions vary across the globe.
Principal Global Investors’ Chief Global Economist Bob Baur, Global Investor Strategist Seema Shah and Portfolio Manager Binay Chandgothia hold different views on Trump’s first month in office, but agree that the economic impact is likely to spread far beyond American shores.
U.S. Focus – Bob Baur, Chief Global Economist
“Thirty days in, we are still waiting to see whether President Trump’s first major economic policy will focus on tax and regulatory reform, or restricting trade in an effort to reduce the U.S. trade deficit. Tax and regulatory reforms have the potential to be a big stimulus to economic growth, jobs, and capital spending. Trade restrictions, on the other hand, could set back global growth and have negative consequences for the U.S. economy.”
“The actions taken by the new administration are so far very much in line with campaign promises. It does appear the tax and regulatory reform is being placed first on the agenda, with real positive potential.”
Europe Focus – Seema Shah, Global Investment Strategist
“President Trump certainly doesn’t waste any time! With most of his policy announcements and promises aimed at protecting U.S. trade prospects, Europe has experienced an unsettling 30 days. Talks about a potential trade deal between the United States and the European Union (EU) have already been declared dead.”
“While U.S. criticism of German external imbalances is not new, given Trump’s negative sentiment towards multilateral trade deals, there is certainly a risk of punitive action. On the other hand, Trump’s preference for bilateral trade deals may benefit the UK. He has shown a strong interest in signing a free-trade agreement with the UK. If this materializes, it would improve UK prospects at a time when most economists are forecasting tough times ahead.”
Asia Focus – Binay Chandgothia, Portfolio Manager
“While politics is incredibly hard to predict, the feeling gaining ground is that, Tweets and tough-talk aside, actual policy will not destroy the economic links built over the years. Impact will be largely sector-specific, which – in the context of relatively cheap market valuations and potentially higher global growth – could drive Asian equities higher.”
By Bob Baur, Chief Global Economist; Binay Chandgothia, Portfolio Manager and Seema Shah, Global Investor Strategist.
