Trump 2.0: How To Navigate Global Markets Amid Trade And Tax Policy Shifts

With Donald Trump's return to the White House, global markets are bracing for another wave of 'America First' policies.

- Arindam Mandal

His renewed focus on domestic manufacturing and reduced reliance on outsourcing reflects his first-term agenda. This shift became evident with executive orders imposing tariffs on imports from China, Canada and Mexico. On 1 February, Trump issued 10% duty on Chinese imports and 25% tariffs on Canada and Mexico, with a lower 10% rate on Canadian energy exports. After negotiations, tariffs on Canada and Mexico were suspended for 30 days, signaling evolving trade policies.

Financial markets responded. Global stock indices tumbled, the US dollar strengthened, and oil prices surged. The Canadian dollar plunged to a 20-year low, while the Mexican peso saw heightened volatility. These reactions reinforce the need for investors to stay vigilant as markets adjust to policy shifts. Despite trade tensions, Trump's election has fueled optimism among US small businesses. The NFIB Small Business Optimism Index surged to 105.1 in December, its highest level since October 2018. The percentage of small business owners expecting the economy to improve rose 16 points to 52%, the highest since 1983. Also, 20% of small business owners now view this as a good time to expand, marking a six-point increase from the previous month.