Donald Trump won the 2024 presidential election and has become one of the two American leaders to reside in the White House after completing their terms. After his monumental win in this presidential election, investors are already anticipating what policy might be and how it will reshape the American economy and impact the global economy.
One thing is clear in this anticipation: the policies will be vastly different from what they were eight years ago, in 2016 when Donald Trump became the US president for the first time.
In this year’s campaign, Trump aggressively pushed forward the idea of “Make America Great Again.” This could be double-edged for countries like India with campaigns like “Make in India.” Further, policies like high tariffs on Chinese goods push companies like Apple to shift their manufacturing to India.
Aditya Suresh, Macquarie Capital’s head of India research, mentioned, “Potential tariff or non-tariff barriers on Chinese imports in the U.S. and India’s domestic manufacturing thrust with Make in India, could be positive for Indian [electronics manufacturing services] companies in areas like PCBs [electric circuits], semiconductors, mobile phones, cables and wires, among others.”
However, there is a twist. Trump’s victory will likely increase the odds of increasing import duties and reducing taxes. According to CNBC, high import duties will likely push consumer prices alongside bond yield. Investor conjure their funds from emerging markets like India and invest them in U.S. Treasury bonds for higher yield. In November itself, investors sold out Indian stocks worth $1.5 Billion. Moreover, lower tax rates will further strengthen the US stock market, making it harder for Indian equities to outperform their US counterparts.
