Trump returns to the White House, revealing the biggest "loser", China has prepared

A victory in the 2024 US election would return Donald Trump to the White House – a return that could have huge implications for the global economy .

President-elect Donald Trump - who often calls himself "Tariff Man". (Source: Getty Images)

Speaking to supporters in Florida on November 6, Mr. Trump said he would usher in “a golden age of America.”

Mr Trump's campaign pledges included aggressive tariffs, deregulation and forging major global deals.

Analysts say it is difficult to determine how far the new US president will go in his term, but the consequences of any measures will have clear global implications.

The "Tax Man" Returns

Six years ago, Mr. Trump often called himself “Tariff Man.”

He also once described “tariff” as his favorite word, calling it “the most beautiful word in the dictionary.”

In an effort to raise revenue, the president has proposed a general 20% tariff on all goods imported into the U.S. Meanwhile, he has proposed tariffs of up to 60% on Chinese products and tariffs of up to 2,000% on cars made in Mexico.

With the European Union (EU), President-elect Donald Trump declared that this 27-nation bloc will have to pay a "heavy price" for not buying enough US exports.

On the issue of tariffs, Lizzy Galbraith, political economist at asset management firm Abrdn, sees that in any situation where the future US president uses tariffs regularly, the main focus will be on China.

Alex Holmes, Asia- Pacific regional director of Economist Intelligence, said that most markets and policymakers assumed that Mr. Trump would not impose all the tariffs he pledged during the election campaign.

However, given his unpredictable precedent, experts predict that Asian countries may consider measures to minimize the impact of tariff shocks.

In addition, US allies in the region such as Japan, South Korea and the Philippines will have to pay attention to the chain effects of tariffs that Mr. Trump imposed on China, because this is a neighboring country and the largest trading partner of the two largest economies in the world.

Analysts warn that plans to impose global tariffs from the US could also push up prices for consumers and slow spending.

Negative outlook for Europe

On global economic growth, Ben May, director of global macro research at Oxford Economics, said that the impact on growth is likely to be limited in the near term when “Tariff Man” returns to the White House. But the big impacts on trade and the structure of growth, as well as on financial markets, are inevitable.

For example, Mr May said, if aspects of Mr Trump's policy agenda were to be enacted - particularly on tariffs - the global impact would be “huge”.

“In addition, uncertainty about Trump’s stance on conflicts in Ukraine and the Middle East also raises the risk of greater instability in both regions, which could impact regional and even global growth,” the director of global macro research at Oxford Economics stressed.

As for Europe, the prospect of a second Trump term has long been seen as negative.

However, analysts at Signum Global Advisors found that the severity of the problem with the region has not been properly assessed.

Indeed, analysts argue, there are several factors that suggest the EU is likely to be “the biggest loser in the second Trump era.” These include trade tensions, the frustration of major policy decisions in Europe and Mr Trump’s desire to double down on America’s advantage in attracting capital flows.

Speaking to supporters in Florida on November 6, Mr. Trump said he would usher in a 'golden age of America'. (Source: Telegraph)

Asia is prepared

For Asia, Mr Trump’s victory is not good news either, especially for China, analysts at investment bank Macquarie Group said. But the region is “better prepared” than in 2016, when “Tariff Man” first moved into the White House.

“The main tenet of Mr Trump’s campaign has been to raise tariffs. While clearly anticipated, the potential headwinds sweeping across Asia – particularly China – will add to volatility,” analysts at investment bank Macquarie Group wrote in a research note.

To balance the situation, China has accelerated its stimulus measures, the investment bank said. The Chinese government has outlined its ambition to support economic growth at 5% and address the difficulties in the property market to support domestic consumer confidence.

Mitchell Reiss, an American diplomat and honorary fellow at the Royal United Services Institute (RUSI), predicts there will be some differences in Mr Trump's policies during his second return to the White House.

“I think President-elect Trump has said that he wants to raise tariffs on China again until the ‘playing field’ is leveled, in his view,” he asserted.

Meanwhile, UBS Bank forecasts that the growth of the world's second largest economy will decrease by another 2.5% within 12 months, after applying the new tariffs of the White House owner. However, the decrease will only be 1.5% if Beijing "retaliates".

However, Mr. Tong Zhao, senior researcher at the Carnegie Endowment for International Peace, said that Mr. Trump's election victory "was not completely surprising to China."

President Xi Jinping's country could respond by accelerating economic and technological self-reliance, while strengthening economic ties with countries like Russia, he said.

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