Much of Mr Trump’s policy actions have been aimed at protecting US trade interests, said Principal Global Investors global investment strategist Seema Shah, resulting in an ‘unsettling’ 30 days since he took office.
“Talks about a potential trade deal between the United States and the European Union (EU) have already been declared dead,” she said.
Ms Shah said Mr Trump’s “negative sentiment” towards multilateral trade deals meant there was a risk of punitive action towards Germany, even though US criticism of Germany’s external imbalances is “not new”.
“On the other hand, Trump’s preference for bilateral trade deals may benefit the UK. He has shown a strong interest in signing a free-trade agreement with the UK,” she said.
“If this materialises, it would improve UK prospects at a time when most economists are forecasting tough times ahead.”
Asia, however, could see an improvement in equity prices, according to Principal Global Investors portfolio manager Binay Chandgothia.
“While politics is incredibly hard to predict, the feeling gaining ground is that, tweets and tough-talk aside, actual policy will not destroy the economic links built over the years,” he said.
“Impact will be largely sector-specific, which – in the context of relatively cheap market valuations and potentially higher global growth – could drive Asian equities higher.”
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