Trump would not be good for world economy, financial markets

Temasek, a Singaporean investment company, is expressing concerns about the potential impact of Donald Trump’s presidential victory on the global economy.

According to Bloomberg, Temasek’s chief investment officer Rohit Sipahimalani argues that Trump can appeal to the markets due to his stances on tax cuts and deregulation, but his policies may strain international growth in the long run.

With the US presidential election approaching in a week, Sipahimalani argues that Trump’s policies could hinder both US and global companies, especially those with extensive foreign operations.

The Bloomberg report shows Temasek’s assessment is at odds with some pro-Trump investor sentiment. Notably, Standard Chartered recently predicted that Bitcoin (BTC) would rise to $125,000 if a Republican government comes into play.

While many see it as beneficial for stocks and Bitcoin, Sipahimalani believes Trump’s victory could strengthen the US dollar and raise interest rates, which would negatively impact emerging markets.

Trump’s trade policies, including tariffs, are also a concern for Temasek; because such measures often create uncertainties that can deter global investment.

The GOP candidate in particular took advantage of the regulatory uncertainty surrounding the crypto market in the US. He promised to help support the growth of the industry by enacting policies such as protecting BTC assets in the country and removing Securities and Exchange Commission Chairman Gary Gensler.

Meanwhile, Elon Musk, an ardent supporter of Trump, recently suggested that Trump would reduce US federal spending by at least $2 trillion a year if he wins.

Musk, who is predicted to be appointed to the cabinet by Trump, believes that major budget cuts will streamline government spending and increase economic stability.

Trump’s stance is consistent with Trump’s vision of economic reform, including potential tariffs to raise revenue, despite economists’ warnings that these could increase costs for U.S. households.

On the other hand, Sipahimalani says Kamala Harris’ policies could benefit emerging markets. Some business leaders, including Mark Cuban, argue that Harris’ approach could better support growth in innovation-driven industries, especially green technology and healthcare.

But the Democratic candidate failed to outline his plans for emerging markets like crypto.

Despite this, Cuban expressed confidence in the Harris administration’s potential to stabilize and increase innovation in these areas.

Temasek’s caution reflects its focus on global economic stability and the potential ripple effects of U.S. policies. The company, which recently planned to invest 30 billion dollars in the USA, sees the importance of US policy in international markets.

However, it warns that significant “tail risks” could arise in the coming years depending on the election outcome, possibly creating turbulence for global investors and businesses.