Former President Donald Trump, the Republican candidate, declared victory in the U.S. presidential election held on November 5. Addressing supporters at his Palm Beach, Florida residence in the early hours of Wednesday, Trump celebrated the win as historic. “Tonight, we’ve made history,” he stated, adding that he was honored to be elected as the 47th president. He pledged to address the nation’s challenges and usher in a “new golden era for America.”
However, many analysts have raised concerns about potential economic risks associated with a Trump presidency. In a video titled “5 Risks of a Trump Presidency!” that quickly gained attention on Korean Economic TV’s YouTube channel, Park Sang-hyun, an executive at iM Securities, outlined key risks that Trump’s presidency could pose for domestic and global markets. Here’s a summary of the five primary risks he identified:
1. Tariff Risk
The Trump administration is known for intensifying tariff policies, which could increase domestic prices and weaken export competitiveness. This may exert trade pressure on major economies, including South Korea, and could significantly contract global trade.
2. Interest Rate Shock Risk
A Trump win could trigger a surge in U.S. Treasury yields, destabilize financial markets, pressure international interest rates, and influence the Federal Reserve’s monetary policy direction.
3. Inflation Risk
Increased tariffs and stricter immigration policies could drive up U.S. prices. If tariff-related costs are passed on to consumers, inflationary pressures may rise. Additionally, labor shortages could lead to wage increases, further exacerbating inflation.
4. Strong Dollar Risk
A Trump presidency is expected to strengthen the U.S. dollar, potentially disrupting global capital flows and impacting emerging economies like South Korea. While the “King Dollar” phenomenon may not persist long-term, trade tensions and safe-haven demand could sustain dollar strength.
5. Global Trade Risk
U.S.-China trade tensions may escalate, though new compromises could also emerge. Trump’s aggressive stance towards China might provoke retaliatory measures, leading to financial market instability and negatively affecting the global economy.
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