A Republican Presidency with a Republican Congress

Trump will be very powerful with a clean sweep. He will want to accelerate growth, promote US business, boost real incomes and jobs – by Garry White

 
He will regard the domestic economic imperative as more important than foreign policy. Musk giving him support may abate Republican antipathy to electric cars, but there will still be a major shift in government attitudes to net zero.There will be fewer bans and subsidies to promote green investments and more licences for fossil fuel.  Markets will see a second Trump term as good for shares including smaller domestic companies, with net earnings boosted by lower taxes. Bond markets are concerned about a bit more inflation and continuing large deficits.

A Trump Presidency is bad news for China and for Europe, facing tariff threats and a US policy based on cheaper energy, lower taxes and regulations to drive more US activity.

A second Trump Presidency would probably see him working at speed to do and achieve more, as he moves on from the frustrations and attacks of the last 4 years. He is likely to want to extend and improve the tax cuts he brought in last time, and want to use fiscal and monetary policy to promote faster growth, even if that means a bit more inflation. He sees tariffs as a useful source of additional revenue, and will cut back on green subsidies. Trump would back further expansion of US energy production including oil and gas, while he also pledges to cancel the electric vehicle mandate and to take tough action against gang and drug crime. He would boost military spending, including the installation of an iron dome style defence for the whole country.

He has threatened heavy tariffs against China and a general tariff against others. This may be a bargaining position. Whilst the Democrats attack Trump’s tariff plans as inflationary, they have kept quite a few of the Trump tariffs from last time and imposed a 100% tariff on Chinese electric cars. President Trump would mean more tariffs and more talk of trade wars.

Garry White is Chief Investment Commentator at Charles Stanley