Charting the Global Economy: Trump Win Reverberates Around the World
(Bloomberg) -- Donald Trump’s decisive win of the US presidential election has world leaders already preparing for how his next administration will shape the global economy.
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In China, factories ramped up shipments ahead of Christmas holidays and likely in anticipation of worsening trade tensions. Emerging markets were hit hard as the dollar and US yields soared. And back in the US, economists predict Trump’s proposals — particularly on tariffs — would stoke inflation and depress growth.
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Speaking after the Federal Reserve cut interest rates by a quarter point, Chair Jerome Powell said Trump’s re-election will have “no effect” on the central bank’s policy decisions in the near-term. The Bank of England also lowered borrowing costs for the second time this year.
China gave indebted local governments a 10 trillion yuan ($1.4 trillion) lifeline but stopped short of unleashing new stimulus, preserving room to respond to a potential trade war when Trump takes office next year.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:
US
The former and soon-to-be next president has promised an escalation of tariffs on all US imports and the biggest mass deportation of migrants in history. He also wants a say in Federal Reserve policy. Many economists reckon the platform adds up to higher inflation and slower growth ahead.
Trump’s stunning and decisive election victory has already led to a frantic repricing in financial markets around the world. Powell will need to reassure global investors that the Fed can manage the impact of a second Trump term — especially if accompanied with a Republican sweep of Congress — that’s already shifting expectations for the path of monetary policy.
Asia
Chinese officials unveiled details of a program to refinance “hidden” local debt onto public balance sheets at a press briefing in Beijing on Friday. While policymakers didn’t announce measures to directly stimulate domestic demand, Finance Minister Lan Fo’an promised “more forceful” fiscal policy next year, signaling bolder steps could come after Trump’s inauguration in January.
China’s export growth surged in October to the fastest pace since July 2022, extending a months-long boost to the economy that may be jeopardized by Trump’s reelection and his tariff threats. Last year, Chinese companies shipped $500 billion in goods to America, accounting for 15% of the value of all its exports.