Since January 20, when I take the presidency of the United States of America, there is not a day that the figure of Donald Trump is not at the center of the controversy. In some cases due to their own action plans, but also due to certain interests in economic pressure groups. It is true that one day they are talking to each other and the next also about one of the most powerful men in the world. But, are you really clear about its main economic measures?
Well, it is not very easy to decipher them either, since one thing is the comments in his election campaign and quite another is what he has actually done as of this week. With the mitigation that may even be controlled by the almighty US Congress and Senate. That although in the hands of the Republicans they can create more than one problem to carry out their master lines in the economy, not only nationally but outside their borders. In this sense, it must be remembered that the representatives of the people do not obey a voting discipline, as happens in Spain. From this approach there can be more than one surprise from these moments.
Either way, one thing is clear and that is that your economic decisions will affect you as a user who is from the European Union. Because one of the battles that will be fought is the economic relationship between the two economic zones. It promises to be very tough, but at the same time exciting. Another aspect that will be decisive is how the financial markets its economic program. Not surprisingly, many analysts will be aware of the evolution of the stock market in these first weeks. Both on one side and the other of the Atlantic. To the extent that you can define the trend that markets take, in one sense or another. After a very nondescript period in which he has moved on neutral ground. As you will see, there are many unknowns that remain to be clarified in the first bars of the new year.
Donald Trump: economic program
The arrival to the top of power in the United States of the Republican representative has already offered his first touches of what an economic policy will be. Through its first two measurements. On the one hand, his untying of the Trans-Pacific Partnership Treaty (TPP), of which eleven other nations are part. Since 2008, Australia, Canada are integrated into this trade agreement. United States, Japan, Peru, Malaysia, Mexico and Vietnam, among others. On the contrary, it appears that his intentions would be to further his relations with the United Kingdom. In this scenario, one of the main losers would be the EU. Not ruling out that a protectionist war could be generated between both geographical areas.
The fragility of the Community positions could have an economic impact on the countries of the Union. Without it being entirely impossible that this change in international relations could lead to a decrease in the area of the old continent. Aggravated by the exit this summer of the community bodies of Great Britain, after the overwhelming triumph of Brexit. Aspects all of them, that without a doubt - sooner or later - will be reflected in equity markets around the world. Very sensitive, on the other hand, to this type of economic measures.
More employment and protectionism
Another of the economic plans that you have been put on the mark is the one that has to do with employment. And very specifically with the relocation of factories that an important group of companies have carried out in recent years. Mainly from the automotive sector, but also from others with great specific weight in the North American economy: steel, pharmaceuticals, new technologies, etc. There are several multinational companies that have accepted Donald Trump's conditions and are going to develop their business models on US soil.
Among them, the European Fiat and Volkswagen that will invest in the United States. Specifically, the first of them has already announced the investment of 1.000 million in the United States while the German group said that it will produce its electric cars in the great economic power. One of the main effects of this measure is that a good part of the companies are already canceling their millionaire investments in Mexico. With another almost immediate repercussion and that is that the unemployment rate in the US may fall to historical lows in the coming months. Not surprisingly, the estimated number of new job creation exceeds half a million jobs.
Tension in the currency market
All these economic plans will entail collateral damage that will be reflected mainly in the already volatility of the currency markets. With abrupt changes between the most affected currencies. In particular, those related to the euro, dollar, Japanese yen and Mexican peso. It may be time for a savvy investor to make significant gains on positions taken in some of these financial assets. Or failing that, to leave a lot of money along the way if the choice of currency is not the most appropriate.
Shocks in the currency markets can be very violent. Very conducive to doing tradindg. Operations in a short space of time that can be very profitable for your interests. Although for this, it will be necessary that you write down a deep knowledge of this financial market. Not in vain, the economic policies of the new president of the United States are going to give a lot of play. Perhaps it is the financial asset that will show the most activity during the first months of tenure.
Radical lowering of taxes
One of its most spectacular measures is the wide reduction in taxes. It will affect both the population and large companies. Going from 35% to 15%. That is to say, no less than about 20% that the main agents of the North American economy will have to pay less. With effects on both segments of society that will lead to other readings as a result of greater fiscal relaxation. Something that, on the other hand, tend to sit very well with equity markets.
Citizens, on the one hand, will see how they will have more money in their pocket. So that in this way, consumption is boosted in a very important way. As a consequence of this measure, the growth of the economy beyond the Atlantic will also be encouraged. With a more than foreseeable rise in its Gross Domestic Product. In all cases, it will favor the position of this important country in the productive sphere.
This reduction in taxes, with regard to companies, will have a boosting effect on their activity in business. To the point that it may be the trigger for you job offers grow in the next few months. Through a program that takes advantage of this new fiscal scenario. As for many years it did not have the US economy. Also with a positive reading by all investors.
Less regulations
La elimination of these administrative obstacles to companies is another of the main axes of Donald Trump's economic program. It will give much greater agility and flexibility to the business fabric of the United States. With a final benefit that will affect all the citizens of this vast country. Also employment, as in the previous cases, will be one of the great beneficiaries of this ambitious measure.
Although it remains to be calibrated what the promotion of fairer trade with other countries will consist of. Something that will remain to be clarified from now on. Although some economists of some relevance on the international scene are not very optimistic, one of the most controversial initiatives of President Trump. In particular, with its relations are its closest neighbors and the geography of the Asian continent. With moments of evident friction with some of the most representative nations. As for example, with China.
Investment in infrastructure
Another of the star measures of its program is the investment of about a trillion dollars in infrastructure. Not surprisingly, it is expected that this large investment will be made over ten years. Through agreements, both public and private through tax reductions that will come into effect in the coming weeks. As a consequence of this important investment plan, one of the main beneficiaries will be the construction companies. With a higher business volume than they had until now. With a foreseeable rise in the quotation of their prices in the equity markets.
Nor can it be forgotten that it will lift restrictions on the production of fossil fuels. Renewable energies being the dark side of this measure, as they will be greatly affected in this new scenario that is presented in the United States of America after the coming to power of Donald Trump. Among its most relevant proposals, it also stands out its firm promise of raise the minimum wage to $ XNUMX an hour.
These are, in short, some of the economic suggestions that will be carried out from the last week of January. Although, surely, some of them will not be undertaken or at least will be forgotten depending on the control that the two US chambers will carry out. Either way, it can be used to formalize your operations in the financial markets. Whatever its nature and financial asset selected during this year.