Where will US policy land?
Trump started his second term with a much clearer sense of what and how he wanted to change America. The broad direction of travel seems clear to us, even if there is quibbling over the details of various initiatives.
The financial media and markets are focusing their attention on President Trump and his trade policies. As we have seen with the recent market-moving announcements on Trump’s tariff policy, this focus is understandable. But to better assess where the world economy is heading, we need to come to grips with the broader forces at work. It is the totality of changes in America’s strategies in the trade, defence and fiscal areas that will drive the world economy and politics. So, we need to appreciate what shape all these forces will take and how other countries will respond to these shifts in the US.
The end result, we believe, will be a great global restructuring. Economic and military dependence on the US will be reduced and new strategic alliances will form while the flows of capital and trade will shift as well. Our region needs to be prepared for these momentous changes.
