Trumped

Donald Trump’s first term in the White House promises to be a radical administration in the U.S. bringing both new opportunities and potentially new risks and uncertain times to the world. Read on to discover our robot’s partial forecast of what is likely to change under Trump and to determine what you and your organization need to do to succeed in these very changed circumstances.

Athena’s forecast
Start year: 2016
Likely Tipping point: 2026
Likely End year: 2046
Likely Impact $: Trillions
Likelihood: 90%
Regions affected: The World
Most affected sectors: Government, Environment, Healthcare, Financial services, Energy, Construction, IT, Support services, Manufacturing

What is changing?

Growth

  • Expectations that a Trump presidency will usher in higher growth and lead to faster-than-expected Fed hikes have helped power the dollar to 13-1/2-year highs against a basket of currencies.
  • A far bigger threat to the global tech sector are Trump fiscal policies and expected reduction of regulations that could destabilize financial markets and hurt venture capital which is the lifeblood of both start-up and growth tech companies.

Trade

  • Trump has threatened to slap a 35% tariff on goods made in Mexico and sold in the United States.
  • (Trump‘s) trade policies could add $5,000 or more to the price of a small car from Mexico.
  • Mexico’s economy will experience considerable volatility over the coming months.
  • Trump is expected to increase trade barriers for companies selling into the US.
  • Trump will insist that China relax its numerous non-tariff barriers now blocking US exports across a wide range of products.
  • A Trump Presidency could put a damper on investment in Iran.

Regulations

  • Regulatory reform is going to be a major focus of the Trump administration.

The initial policy focus areas under a Trump administration will likely include repealing the Affordable Care Act, tax reform and infrastructure investment.

International relations

  • Anti-American sentiment is deeply embedded in the Russian security and diplomatic establishment and will not disappear with the inauguration of Mr Trump as president.
  • Sino-U.S. relations after Trump takes office on Jan. 20 are expected to be fluid.
  • Climate change could become an area of tension between the world’s two superpowers if China perceives it has been jilted.
  • The recent strengthening of ties between the US and India could be jeopardized if the new administration in Washington chooses to reduce the US presence in Asia.
  • Underlying every decision in European capitals will be the anxiety that without U.S. leadership Europe will become even less politically cohesive and that local divisions will be aggravated.
  • The threat by Trump to “punish” American companies that outsourced jobs is seen as having possibly a major financial impact on the Philippines.
  • Under a Trump administration, the U.S. will be less engaged in Africa especially where it concerns the expenditure of taxpayer resources on economic development initiatives.

Immigration

  • Trump will make the migration policy more severe and will not promote Obama’s plan to amnesty seven million illegal immigrants already residing in the U.S.
  • U.S. President-elect Donald Trump has threatened to ban Muslims from entering the United States and championed anti-immigration policies.
  • There’s a chance that Trump will restrict the H-1B visas that many companies in the tech industry rely on to attract talent.

Environment

  • What’s very likely is that the US will stop leading on international climate negotiations.
  • A withdrawal from the recent Climate Change agreement by Trump would hobble the agreement’s effort to cut fossil-fuel emissions and could leave the U.S. facing grave diplomatic repercussions.
  • Trump is expected to gut the Environmental Protection Agency. Under Trump, the role of cities and states in regulating pollution and expanding clean energy will increase.
  • Trump will likely instruct the EPA to scrap the Clean Power Plan.
  • Trump will boost the natural gas revolution by removing barriers to hydraulic fracturing and by encouraging more pipeline construction.
  • Environmentalists could make progress during the Trump years by pressing state and local governments to block fossil fuel projects that would lock in high-carbon infrastructure for decades to come.

Implications

  • A dangerous policy that Trump could pursue would be to back away from America’s security arrangements with countries like Japan and South Korea.
  • There is the possibility that the Trump administration will require Muslim immigrants from certain countries to register in a national database.
  • Mr Trump could fuel currency wars by formally accusing China of manipulating the value of the yuan and keeping it artificially low.
  • A Trump administration could stop reimbursing insurers for the cost-sharing reductions they must give low-income Americans with ACA exchange plans.
  • A Trump administration curb on foreign workers could hit remittances from Filipinos in the U.S.
  • Donal Trump has described Estonia as the suburbs of St. Petersburg and not worth a confrontation with Russia that could risk nuclear war.
  • There is some speculation that foreign countries will begin making larger investments in bitcoin in the light of a Trump presidency.
  • Some have expressed the worry that Trump will act to curtail monetary policy.
  • In America, Mr Trump could succeed in persuading companies to bring home billions of dollars that sit abroad by means of a tax holiday and a lower tax rate.
  • Mr Trump could fuel currency wars by formally accusing China of manipulating the value of the yuan and keeping it artificially low.
  • A Donald Trump administration could bring “substantial change” to the automotive industry.
  • Trump policies may be good in short-turn but could lead to stagflation.
  • Some have expressed concern that Trump’s many hotels, condos and golf courses could be venues through which people could curry favor with the incoming president [and vice versa!].
  • Trump policies for trade could lead the U.S. towards becoming a closed economy.
  • Trump likely will support the continued move to value-based care.

Questions
After Trump running a campaign based on bringing manufacturing jobs back to the United States and criticizing trade deals such as the North American Free Trade Agreement and the Trans-Pacific Partnership, what can an industry heavily reliant on imported goods expect in the coming four years?
Would Trump turn Eastern Europe over to Putin?
How will the Trump administration’s other priorities influence (or be influenced by) technology?

Sentiment

Learn more

Find more sources and forecasts on Shaping Tomorrow, some of which were used in this Trend Alert, or ask us for our ready-made and free, in-depth PowerPoint report or more detailed GIST briefing on this or any other topic of interest to you.

Also, click here to find out how Shaping Tomorrow can help your organization rapidly assess and respond to these and other key issues affecting your business.

Ask us to show you how you can produce similar, private Alerts for your stakeholders on topics of interest to you.

About this Alert: robot generated from verbatim forecasts and questions auto-extracted from the Shaping Tomorrow database of articles, reports and PowerPoints and supplemented with quantitative and graphical analysis by the robot. Time to compile and produce – 40 minutes.

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