The 2016 U.S. Elections: Trump Victorious
The 2016 U.S. Elections kicked off on November 8th with the widespread prediction of a dominant Clinton-campaign victory, however as polls started tallying, it was evident early on that a Trump-inspired upset was on the cards.
Trump managed to pull off a historic win for the Republicans come daybreak on November 9th, with the President-elect winning the key battleground states of Florida, Iowa, North Carolina, Ohio and Pennsylvania, racking up a feat no Republican nominee has accomplished since 2004. Mr. Trump’s popularity among the states’ white voters combined with Mrs. Clinton’s weak turnout among African Americans meant a win for the Republican in states President Barack Obama won twice.
There has been widespread speculation on how global markets are going to react to the surprising result, with the majority of international institutions having already anticipated a smooth transition into the new Clinton office. According to the UK Independent, investors have rapidly dumped U.S. government debt, with the election having wiped more than $1 trillion off the value of global bond markets in the matter of two days. The U.S. Treasury Index saw the biggest weekly decline since June 2009.
Given these numbers, it appears a massive sentiment shift in the bond markets is taking place, with a lot of investors already starting to reallocate out of bonds and into stocks. The big question on global minds’ is Trump’s policy on international policy and trade; in his acceptance speech he spoke in lengths about internal plans and “Making America Great Again” with strong internal infrastructure building and job creation, however little was touched on from a global-relationship perspective.
From Barak’s perspective, this last point is crucial; how is African trade going to fare in the midst of this result, with a potentially volatile leader in power in arguably the most influential economy in the world. Essentially, we are moving into unchartered territory. According to NKC Research in the near term, the biggest risk relates to the impact of uncertainty on financial markets. Looking further ahead, NKC resonate the general sentiment – Africa may not be very high on the Trump administration’s agenda at first. U.S. policy towards China has to be monitored carefully moving forward due to the possible impact on demand for African minerals, investments from Beijing, Chinese loans for infrastructure development and the likely impact on commodity prices.
Looking even further ahead, it appears the most catastrophic consequence could be climate change. If Trump goes with his before-seen behaviour, he will give the green light to widespread fracking, coal and oil exploration. Africa will be the most adversely affected continent. Furthermore, Trump is likely to retract benefits under the African Growth and Opportunity Act and reduce U.S. aid.
Ultimately, although very little has been said by Trump on Africa, the uncertainty of what is to come is something that needs to be monitored particularly closely. Barak has acknowledged that it doesn’t see a slowdown in trade across the continent, and in fact may see a pick-up as traditional funding becomes scarce, but time can only tell. One thing is for sure – under Trump, we will see some major changes that are sure to affect all corners of the globe.