Trump victory could trigger trade war

Trump victory could trigger trade war

If elected, US Republican presidential candidate Donald Trump could spark a global trade war if he enacts his "protectionist" economic policies, according to the UNSW Business School.


Commenting on the impending election, UNSW Business Schools JW Nevile Fellow of Economics Tim Harcourt said Mr Trump “would be the most isolationist, protectionist President since Herbert Hoover in the '20s”, and that this is worrying for the world.

“The problem is, Mr Trump has promised major personal and corporate tax cuts, and has repeatedly attacked China during his campaign, blaming the world's second-largest economy for stealing American jobs,” he said.

Goods from China and Mexico could be subject to 45 per cent and 35 per cent tariffs respectively if Mr Trump wins the election, Mr Harcourt said, which would hit global markets.

Mr Harcourt did however comment that Democratic nominee Hillary Clinton and her party would also face a difficult road ahead, saying “they can’t continue to let the minimum wage slide and let the blue collar jobs that once made America great just disappear with nothing in their place”.

Betashares chief economist David Bassanese however said a Clinton victory is likely to induce a two-day relief rally, where a Trump victory would see a two-day slump with a two-day relief rally to follow.

“Washington will then revert back to its traditional gridlock, and we'll be back to focusing on the strength of the US economy and the Federal Reserve,” he said.

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