Following President Trump's recent electoral victory, concerns are mounting regarding the future of the global economy under his administration. Trump's 'America First' policy is expected to lead to higher tariffs and a reduction in openness within the U.S. economy, which could have far-reaching implications for international trade [bcb7d505].
Currently, the U.S. gross national debt is approximately $35.95 trillion, equating to about $107,345 per individual. The U.S. GDP stands at $29.17 trillion, with a GDP per capita of $86,000, significantly surpassing China's GDP of $18.27 trillion and its per capita income of $12,900 [7b8f6f48].
Economic forecasts indicate that U.S. GDP growth is projected to reach 2.8% in 2024, while China's growth is expected at 4.8%. Trump's administration plans to impose high tariffs on Chinese goods, which could reignite a trade war between the two nations [7b8f6f48].
In addition to tariffs, the Biden administration has continued some of Trump's policies while introducing new subsidies, such as the $369 billion allocated for electric vehicles. This has led to increased consumer prices, with tariffs on items like washing machines rising by 12% [bcb7d505].
As Trump prepares for a second term, his cabinet is expected to be filled with loyalists, including nominees like Elon Musk for government efficiency and Howard Lutnick for commerce. With Republicans controlling Congress and a conservative Supreme Court, Trump's administration is anticipated to favor bilateral negotiations over multilateralism, influenced by the Heritage Foundation's Project 2025 manifesto, particularly in its stance against China [27b37a62].
The implications of these policies extend beyond the U.S., particularly affecting regions like Africa. The potential expiration of the African Growth and Opportunity Act (AGOA) in 2025 poses a significant threat to trade relations, especially for countries like Namibia, which rely heavily on U.S. trade benefits [7b8f6f48].
As global hunger and civilian casualties rise, the need for countries to collaborate without over-dependence on the U.S. becomes increasingly urgent. Europe is also matching U.S. subsidies, which could lead to economic strain as nations navigate these complex trade dynamics [bcb7d505].
Mario Draghi has warned of Europe's existential challenges, as European manufacturers are shifting investments to the U.S. amid fears of being left to fund Ukraine alone. The era of Trump 2.0 may lead to increased self-interest and reduced cooperation among nations, compelling countries to focus on self-strengthening to navigate a fragmenting global order [27b37a62].
As Trump's presidency unfolds, the world will be watching closely to see how these policies will reshape global trade dynamics and economic relations, particularly in regions heavily reliant on U.S. trade policies.