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Risks and rewards under Trump 2.0

“Institutional stability may be threatened both at home and abroad by Trump’s propensity to rule by fiat and his contempt for established conventions.


The world is once again preparing for the turmoil of uncertainty associated with Donald Trump’s name, given his inauguration as president of the United States. However, if one is willing to play devil’s advocate, there is the possibility of significant and constructive changes amid the chaos being pictured by the man’s critics.

The Trump era presents chances in a variety of areas, including the financial markets and geopolitical maneuverings. Trump’s recent phone conversation with Chinese President Xi Jinping, which suggested cooperation rather than conflict, was well received by markets around the globe. A rare moment of hope for international investors, the gesture allayed fears of a fresh trade war and was a far cry from Trump’s tariff-laden bluster.

This sentiment was mirrored in Asia’s markets, which have historically been sensitive to US-China relations. Shanghai, Tokyo, and Hong Kong also experienced increases as there were expectations that Trump’s transactional style would result in a practical overhaul of trade relations between Washington and Beijing.

Trump has indicated that he is willing to work with Xi rather than alienate him by promising to balance trade, fight the fentanyl problem, and solve technology-related concerns. Even though doubts persist, there is some hope that another round of crippling tariffs may not be imposed by America.

The ascension to office of Trump also portends a positive development for the bitcoin industry.

Bitcoin’s meteoric ascent above $109,000 demonstrates how supportive the market is of his deregulatory policies. Trump’s shift towards digital assets is evident in his appointment of cryptocurrency champion Paul Atkins to lead the US Securities and Exchange Commission (SEC) and the introduction of his own cryptocurrency, $TRUMP. This could establish the US as a world leader in the bitcoin space, drawing talent, capital, and innovation.

However, things are not always easy. There are good reasons to be concerned about Trump’s history of making inconsistent policy decisions. Despite being attractive to businesses, his promises to cut taxes and regulations run the risk of increasing inflation and making the Federal Reserve’s already difficult balancing role more difficult. The Fed might have to change its interest rate policy in response to growing inflationary pressures, which could impede economic expansion.

Likewise, Trump’s immigration and trade policies continue to cause division. Critics caution that these policies could hinder innovation and alienate important trading partners, while his supporters defend them as essential for preserving American employment.

The $250 billion export assistance program announced by the South Korean government demonstrates how Trump’s actions have repercussions. The high stakes of his policy decisions are highlighted by the preemptive action taken in response to fears of possible tariffs.

Trump’s nontraditional strategy may have unanticipated geopolitical benefits. His capacity to interact with world leaders directly, frequently eschewing established diplomatic routes, could lead to innovations in fields where more traditional approaches have failed. Trump’s announcement that he and Xi Jinping will endeavor to make the globe “more peaceful and safe” may open the door to fruitful discussions on important topics, such as North Korea’s nuclear aspirations and climate change.

Trump’s tendency to put short-term profits ahead of long-term stability may lead some to suggest that this confidence is misguided. But in other situations, his unpredictable nature may also work to his advantage, compelling both allies and enemies to reevaluate their approaches. His acceptance of cryptocurrencies, for example, in spite of his earlier rejection of them as a fraud, shows a readiness to change and seize new chances.

Of course, it is impossible to overlook the risks. Institutional stability may be threatened both at home and abroad by Trump’s propensity to rule by fiat and his contempt for established conventions. His aggressive approach could embolden enemies and alienate allies, making it more difficult to address global issues. No doubt, there are significant concerns regarding sustainability given the effects of his policies on the environment, especially his backing for energy-intensive sectors like cryptocurrency mining.

However, Trump’s rise to power offers a chance to reconsider and refocus. His presidency is a reminder that, despite its discomfort, change can spur advancement and creativity. Steering through the uncertainty while taking advantage of the opportunities that present themselves is a challenge for individuals, governments, and enterprises.

Trump’s ability to strike a balance between ambition and practicality will ultimately determine the influence of his presidency. His term could surpass expectations and produce a positive legacy that lasts a lifetime if he can transform his audacity into positive action and cultivate true partnerships. Even though there are many obstacles in the way, it’s worthwhile to think about the possible benefits that could be had at the conclusion.

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Credit belongs to: tribune.net.ph

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