What Would Trump’s Re-election Mean for the World’s Economy?

Despite the immense tumult of his first term as US President, Donald Trump remains among the front runners to earn re-election in 2024.

He’s already the odds-on favourite to earn the Republican nomination for the next election, ahead of Florida governor and Trump protege Ron DeSantis. 

This is despite Former Speaker of the House Paul Ryan revealing that even MAGA diehards don’t believe that Trump can competitively contest the election in 2024, while he has also stated that his nomination would be highly detrimental to the party.

But what exactly would Trump’s re-election mean for the US and global economies? We’ll explore this in more detail in the article below.

Trump and the Economy

Trump’s initial term was mired in failure and contradiction, especially when it came to his economic policy. 

When ploughing a contentious and often outrageous campaign trail in 2016, the former US Apprentice star talked about restoring manufacturing and mining jobs, which struck an emotive chord with the Rust Belt states such as Illinois, Indiana, Michigan, Missouri, New York, Ohio, Pennsylvania, West Virginia, and Wisconsin.

These states once combined to create the manufacturing centre of the United States, before this industry and its numerous jobs began to be outsourced to China on a mass scale.

Interestingly, Trump’s constant and often tasteless attacks on immigration were also linked to his economic policy, as he sought to reduce competition for work and increase the total number of jobs available to US-born citizens.

Despite these bold and concise pledges, Trump failed to deliver on any noticeable scale. In fact, his one-term tenure ended with something of an unwanted record, as he became the first President since Herbert Hoover (who, in his defence, served during the Great Depression) to depart office with fewer jobs than when he started.

Then came his total lack of leadership and clarity during the coronavirus pandemic, when his failure to listen to scientific experts and accept the severity of Covid-19 saw the country experience a far greater economic downturn than it otherwise may have.

Overall, Trump also oversaw tax cuts and breaks that overwhelmingly benefited the wealthy, while his pursuit of trade wars with both neighbours (including Canada and Mexico) and old foes China actively hurt US industry and restricted trading opportunities on a global scale.

Would Trump’s Re-election See Anything Change?

In truth, it’s hard to see anything change if Trump was to earn the Republican nomination and subsequently be re-elected in 2024. 

After all, he’s hardly a man who’s known for his introspective personality and willingness to learn from mistakes, as he retains a tendency to double down on his errors rather than correct them.

So, despite the fact that his trade policies actively hurt the industry sought to protect and he left office with a dwindling number of jobs, he would be unlikely to pursue a more enlightened or informed path in 2024.

In fact, his re-election would probably embolden his short-sighted and largely ideological policies, potentially destabilising the US economy and markets at a time when the global economy remains on the precipice of a recession. 

Remember, inflation rates also remain relatively high in the US and across the globe, and tackling this type of issue requires concise decision-making and informed monetary policy.

However, we can certainly expect Trump to once again pursue a narrow and inward-looking trade policy, rather than increasing trade capacity and broadening geopolitical interests in the Indo-Pacific. After all, this would be considered as selling out and an example of rampant globalism by many of his staunchest supporters, and it’s his base that Trump must keep happy if he’s to return to the White House.

The issue here is that economic protectionism simply doesn’t work in an increasingly globalised world, where countries look to create lucrative trade blocs and boost opportunities through collaboration and cooperation.

This risks leaving the USA behind if it follows an ‘America First’ ethos during a second Trump term in office, meaning that it may lose more ground as an economic powerhouse and be left out of an international coalition to solve the world’s shared problems.

The Last Word

Ultimately, both the US economy and financial markets would most likely take an immediate hit if Trump was re-elected, not least because these entities historically perform better during Democratic presidencies than Republican alternatives. 

Similarly, Trump’s stubbornly protectionist and ideologically-driven economic policies would undermine the global recovery from the brink of recession, with a lack of coordination harming both American and international businesses.

For now, of course, current President Joe Biden remains the favourite to earn re-election. However, Trump retains a strong body of support among voters, and a second term cannot be ruled out for America’s most contentious of all former Presidents.