In a historic political comeback, the former 45th President Donald Trump reclaim the White House as the 47th President of the United States. His election would bring a mix of policy continuity and new pressures to the global economy, affecting trade, international relations, energy policy, and tech regulation. While Trump’s “America First” doctrine gained traction among his supporters in the United States, it also sparked significant shifts in global trade dynamics and geopolitical relations that could intensify. Here’s a look at the key economic issues likely to be at stake in a potential Trump second term.
The first key issue in the list is the United States-China relations and trade policy. Under President Trump’s first term, the United States-China relationship transformed from cautious cooperation to open rivalry. Aimee Picchi, economic and political analyst of CBS News stated that his administration placed tariffs on billions of dollars of Chinese goods, accusing China of unfair trade practices, intellectual property theft, and economic policies harmful to American industries. Despite a partial trade deal in 2020, tensions remained high.
According to Aimee Picchi, in a second term, President Trump might further pursue decoupling the United States economic dependencies on China, particularly in critical sectors like technology, pharmaceuticals, and semiconductors. He has previously advocated for pulling United States companies out of China, and under his renewed leadership, we might see even more incentives or pressure on United States businesses to “reshore” or move operations to allied countries. This could create opportunities for economies in Southeast Asia or Latin America but would also risk heightening global economic uncertainty.
The issue of Energy Policy and Climate Change is the other key issue at stake. It is known that President Trump was a vocal supporter of fossil fuels and sought to roll back environmental regulations. In his first term, his administration withdrew from the Paris Climate Agreement, and a second term would likely reinforce these trends, promoting oil, natural gas, and coal industries while downplaying renewable energy investments.
Professor Samuel Green of Kings College in London stated that this stance would diverge sharply from much of the international community, where countries are intensifying commitments to renewable energy and emissions reductions. A second Trump term could slow United States participation in global climate initiatives and create potential conflicts with trading partners implementing “carbon border taxes” on goods from countries with less stringent climate policies.
Trade Deals and Alliances is one of the key issues which will be affected.
President Trump’s approach to trade deals during his first term included pulling out of the Trans-Pacific Partnership (TPP) and renegotiating NAFTA as the USMCA, focusing on bilateral agreements rather than multilateral partnerships. In his second term, President Trump could continue to favour unilateral tariffs and sanctions over collaborative trade agreements, which may lead to unpredictable economic dynamics for United States allies and trading partners.
Steven Buckley of City University of London argued that without clear multilateral trade leadership from the United States other countries and regional blocs, such as the European Union and the Asia-Pacific, might pursue their own deals, potentially isolating the United States on the trade front. Furthermore, President Trump’s scepticism of NATO and other military alliances could lead to tensions in Europe, affecting economic relationships across the Atlantic.
The other key issue is tech regulation and digital economy. President Trump’s second term could see a continuation of efforts to regulate large tech companies, particularly in social media and communications. President Trump was vocal about alleged biases in tech and pushed for changes to Section 230, a United States law that provides immunity to online platforms for third-party content. This stance could lead to heightened scrutiny of big tech firms both domestically and internationally.
Internationally, President Trump’s push for “American first” policies might clash with global tech players in areas such as data privacy and the growing adoption of digital taxes by countries like France. This divergence could result in tech companies restructuring or segmenting operations to comply with varying regulations across markets.
Global economic stability and financial markets is also the key issue at stake during the President Trump’s second term. Michael Townsend of Charles Schwab Consulting noted that, President Trump’s economic policies during his first term included corporate tax cuts, a relaxation of financial regulations, and an emphasis on stock market performance as a measure of economic health. A second term would likely continue these trends, possibly favouring short-term economic growth measures that could impact the longer-term stability of the United States economy.
Additionally, President Trump’s stance on the Federal Reserve and his support for low-interest-rate policies could impact United States monetary policy. While traditionally independent, the Fed could face political pressures to align with President Trump’s economic agenda, which could create tensions within the financial markets, especially in times of economic uncertainty.
To conclude, the second term of President Trump would likely continue his first-term policies with a sharper focus on “America First” principles. Key risks to the global economy would include increased trade tensions, particularly with China; potential conflicts with global climate goals; and shifts in global alliances. While some United States industries might see short-term gains, the potential for long-term economic instability could grow, with significant implications for supply chains, global financial markets, and international trade relationships.
Ultimately, the global economy under a second term of President Trump could experience greater volatility, with lasting impacts on both the United States and its international partners. The trajectory of these impacts would depend on how other countries respond, either by aligning with the United States policies or by forming new alliances to counterbalance America’s shifting role in the global economic landscape.
