Donald Trump May Not Be All Bad for Asia

Donald J.Trump

Donald J.Trump

We were told by the analysts, some of the smartest people in the investment diaspora, that a Clinton victory was assured if not already baked-in and then, well then they got it wrong, badly wrong, a la Brexit, again.

Of course the analysts have been quick to backpedal and rapidly produced the best investment strategies to deal with the known unknowns of the new United States regime, come January 20. 

Technology Flop And Hard-Working Farmers

Every day we get news of financial technology breakthroughs. We had also been told that big data would change everything and that the all-knowing algorithms would be calibrating the right result of the U.S. election.

I guess the financial wizards never added the email addresses of the hard working farmers in Kansas or the redundant steelworkers in Pittsburgh to their databases; but they have now heard their primal scream, a roar that spooked Asia's markets today.

Asia Good or Bad

So once the dust has settled across Asia what happens next?

The Trans Pacific Partnership (TPP) trade agreement was said to be going to encourage communication among financial sector regulators. It would avoid and resolve unnecessary barriers to entry, and help protect existing investments and encourage further competition in the financial sector.

It would be fair to say that TPP is dead on arrival. A fact China must be happy about as many saw TPP as as much a political tool to contain China as a conduit for trade.

Unintended Consequences

For Asia in general though that may not be a bad thing. Instead of looking across the Pacific Ocean to sell their goods, the countries in the region should also take a look inward, but with a positive view.

Intra-Asian trade could be one of Trumps unintended consequences and one that could benefit Asian banks and financial services providers possibly at the expense of their American counterparts.

The bulging middle class across Asia has huge purchasing power and given the right conditions, could minimise any fallout from Trumps punitive tariff plans. India which has relatively low trade and immigration with the U.S may also not feel such a chill from the Trump regime.

China: Watch This Space

China on the other hand has to be concerned. Will we see the imposition of trade tariffs and an emboldened U.S. Treasury calling out China as a currency manipulator? Or will Trump be reined in by the raw reality of international trade and have his head turned by domestic issues, of which there are many?

President-elect Trump was crucified, vilified, pilloried, abused, denigrated and his family maligned, yet he has pulled off one of the most historic victories in U.S. history.

So don’t count him out just yet, the Donald might just end up being good for Asia.

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