The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Himanshi Choudhary, MBA 2016-18, Vinod Gupta School of Management, IIT Kharagpur
Donald Trump took the oath on January 20 becoming the 45th president of the United States. By getting elected as the President of United States, Trump succeeded in defeating Hilary Clinton in US Elections. Americans have elected its president a person who is a reality television celebrity of dubious morals and questionable business ethics, whose companies have filed for bankruptcy six times and been involved in more than 4,000 lawsuits, and whose campaign policy pronouncement was vague and contradictory.
As of now, it is hard to say what a Trump presidency will mean for the United States, let alone for the rest of the world. He has promised to simplify the complicated US tax code, which he may succeed in doing but in reality tax reform is shorthand for tax cuts, with Trump proposing to lower personal taxes and slashing the US corporate tax rate. He has also promised to ramp up the spending on public infrastructure projects. It’s been estimated that it would drive the US government’s gross debt up from 104 percent of gross domestic product to 140 percent – his fiscal program is likely to prove massively stimulative, pushing up both US economic growth and inflation.
Normally faster US growth would be good news for Asian economies, generating stronger demand for the exports. But one of Trump’s central campaign promises was to boost the income of blue-collar workers by aggressively raising minimum wages. But, this would encourage US companies to move even more operations offshore, very likely to Asia, which would threaten to leave American workers worse rather than better off. To prevent this happening, Trump is proposing to withdraw from the World Trade Organisation, tearing up multilateral trade pacts that have not yet been ratified, such as the Trans-Pacific Partnership, renegotiating deals like the North American Free Trade Agreement, and imposing tariffs – 45 per cent in the case of China – on imports from key trading partners.
All in all, Trump’s action might disrupt the whole trade economy of the world and in some cases might ignite the war too. Under the powers delegated to the president, he will have the legal authority to do all of the above-mentioned changes. But whether he will actually go ahead is far more doubtful and we will know only when the time comes.