US Election Results 2024: In a remarkable turnaround after losing the 2020 elections, Republican US President Donald Trump secured a record-breaking historic victory in the US Presidential Elections 2024, defeating Democratic Vice President Kamala Harris with over 270 electoral votes to become President-elect officially. After weeks of opinion polls predicting an exceptionally tight race to the White House, Trump has swept a string of states, including Alabama, Florida, Nebraska, Texas, Ohio, and others.
Claiming victory as the 47th President of the United States, Donald Trump pledged to "heal" the country and bring a “golden age" to the US as he took the stage on Wednesday, November 6. Trump has won three crucial swing states – Pennsylvania, North Carolina and Georgia, bolstering his path to 270 electoral votes. Kamala Harris has won Virginia and Hawaii, adding to her earlier victories in Democratic strongholds like California, New York, and Illinois.
As Trump recaptured the White House, the Republican Party also secured the Senate and may win the US House of Representatives, making it easier for the President to legislate his proposals and push through key appointments.
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Trump's top policy pledges for implementation as President include higher trade tariffs, job security, strict immigration, and economic development. The impact of the Trump 2.0 term will reverberate through the global economy. Analysts say the strain on government finances, inflation, economic growth, and interest rates will be felt deeply and quickly in every corner of the world.
According to analysts, attention will shift to the impact of his protectionist policies on the US and global economies. Stock markets have responded positively, with indices hitting record highs and the US dollar strengthening, largely due to Trump's previous term, which saw tax cuts and deregulation benefit sectors such as energy, manufacturing, and defence.
Countries will be pressed to take sides, increasing polarization risks. If overall sentiments are to be accounted for, the majority believe Trump 2.0 will have a negative impact across Asia; however, for India, despite short-term disruptions, offset by the medium-term benefit to India from supply chain relocation, as de-risking from China strategy gains further momentum under Trump 2.0.
Global markets could initially react with volatility, especially as investors weigh the impact on global supply chains and economic growth. Experts say Trump's administration has previously shown a willingness to shake up existing norms, so economic indicators such as inflation and interest rates in the US may diverge more sharply from global trends. Here are five key ways in which Trump's second Presidential term will impact global markets:
1.US-China trade war: A tariff rise would dramatically dent China’s export muscle, considering that Trump has threatened to levy tariffs soaring as high as 60 per cent on Beijing. This is not to say that his protectionist tendencies won’t hurt other countries. However, China will bear the brunt of the tariff attack.
"Investors can expect a rekindling of the US-China trade war, which will obliquely benefit emerging economies, especially India. In the coming days, the “China-plus-one” strategy will come into sharp focus once again, and the Indian pharmaceutical sector looks well-placed to benefit more from China’s alienation than from Trump’s presidency," said Yogesh Kansal, Cofounder & CMO of Appreciate.
2.Impact on Indian economy: President Donald Trump's US election win is positive for India, whereas Trump’s America First approach means a more bilateral than multilateral approach to foreign policy. In Asia, he is likely to maintain a hawkish stance towards China. Some positives could be in store for the Indian economy, as a cooling Chinese economy would trigger a drop in commodity prices, especially crude oil rates.
According to Ross Maxwell, Global Strategy Operations Lead, VT Markets, Trump's protectionist stance—potentially imposing heavy tariffs on imports—could have wide-reaching effects, particularly on emerging markets that rely heavily on trade with the US. India, in particular, may face challenges from a stronger USD, leading to capital outflows and inflationary pressures.
"Wider believes that Trump may be more favourable toward India, given his anti-China and pro-Russia stance. However, potential issues remain, particularly concerning trade and tariffs. In a broader term, India stands to gain particularly in the Initiative on Critical and Emerging Technology (CET), the GE-HAL Engine deal, and the De-risking of the Supply chain from China," said Narendra Singh, smallcase Manager and Founder at Growth Investing.
3.Fund flows: According to Singh, Trump's win may likely re-energise the dollar and renew investor interest in US assets, which may, in turn, accelerate foreign portfolio outflows from India to an extent. However, this view may not be true as India has become a more strategic partner to counter China via Quad.
Foreign institutional investors (FIIs) may remain cautious and cap investments in India amid geopolitical and economic uncertainties. “They may also like to invest in domestic markets. A strengthening dollar could further weaken the Indian rupee, raising inflationary risks and increasing currency volatility in the near term,” said Palka Arora Chopra, Director at Master Capital Services.
4.Immigration policy, H-1B visa restrictions: When Trump comes to power, India will have to reckon with other major pain points. For starters, IT companies will again have the sword of the H-1B visa restrictions looming over them. “These visa restrictions can lead to workflow disruptions and possibly dent the topline of marquee Indian IT companies for a quarter or two,” said Yogesh Kansal of Appreciate. Trump's strict immigration policies could negatively affect India's tech industry, which depends on the free movement of skilled labour.
Trump's America First and Make America Great Again agendas, emphasising tighter immigration controls, may pose challenges for India’s IT sector, which relies heavily on US H-1B visas to deploy talent onshore. “If Trump further limits these visas, Indian IT firms may potentially experience headwinds like increased costs and operational challenges, affecting their US growth prospects,” said Palka Arora Chopra of Master Capital Services.
5.Impact on EMs: Trump's first term fostered good relations with India, and his view of China as a security threat may lead to efforts to counterbalance China's influence in Asia, which could benefit India. Opportunities in defence, tech, and expanding Indian exports in pharmaceuticals and IT services may arise," said Ross Maxwell of VT Markets.
Narendra Singh of Growth Investing believes India will receive more FDI in manufacturing, defence technology, and global capability centres. In the medium term, this would be more FDI than FII. According to Palka Arora Chopra, the Indian pharma sector could lead to comparatively higher scrutiny of pharma companies, which may further lead to changes in consumer preferences.
Chopra added that Trump's policies may create headwinds for sectors like IT and pharma in the near term but may be beneficial in the longer term. A stronger dollar will result in better revenues for Indian IT firms, which rely heavily on this geography for their earnings, which are reported in US dollar terms.
Sectors like defence and manufacturing are supposedly in a much better position as the USA may favour India as its key strategic partner and supplier in Asia, leading to India receiving the technological gains of dealing with the best and latest technology in the market. Under Trump's Presidency, the US will likely take steps to corner China from global trade and geopolitical significance.
In the long term, Trump's Policies show a better macroeconomic outlook for the global economy and emerging markets (EMs) that align with the US. Analysts believe that while Trump's policies present risks and opportunities, they will likely create a cautious outlook for the global economy.
As we have seen, US election results are likely to cause a short-term volatility in the markets, and similarly in forex. Gradually, as the volatility subsides, the market will come to its senses, and then further USD-INR impact can be assessed. The US dollar will likely strengthen in the coming months after trade policies kick-off.
“Broader term INR seems to be heading to further lows in short to midterm; further weakness can continue if Tariffs are reciprocated under Trump 2.0,” said Narendra Singh of Growth Investing. For investors, this would be a time to monitor assets in regions sensitive to US policy changes, with an eye on any protective measures taken by other economies in response.
“Brace for immediate market fluctuations and a possible shift toward isolationist trade policies. Trump's presidency would likely mean an increase in tariffs, which could disrupt global trade and hit emerging markets especially hard. Key sectors like tech and manufacturing might experience sharp changes as policies cater more heavily to ‘America First’ interests, potentially straining relationships with major trading partners like China and the EU," said Vinit Bolinjkar- Head of Research at Ventura Securities.
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
