TRUMP WIN, Trump won the 2024 US presidential election and returned to the White House after four years.
Businessman, real estate tycoon, TV star, former president, Donald Trump - this politician under the shadow of four criminal prosecutions and 91 felony charges is creating the most incredible "comeback" in American political history.
The White House, a solemn building that has witnessed the succession of 46 presidents, is about to welcome its first "returnee" in history.
This is not only a narrative about politics, but also a critical moment that will profoundly affect the global financial market.
Trump's iconic "America First" policy, controversial trade stance, and support for cryptocurrencies such as Bitcoin may all set off a new round of waves in the global financial market.
As Trump's winning rate climbs, Bitcoin continues to break through historical highs.
As Wall Street traders watch this political upheaval and global investors weigh various possibilities, we may be standing on the threshold of a new financial era. This era will be redefined by a highly controversial politician in his own unique way.
What will be Trump's future economic policies and their impact on the US stock and cryptocurrency markets? Let me tell you
Summary of Trump's economic policies
First of all, we need to know that Trump's base, that is, the core voter group, is mainly "rednecks", that is, evangelical low-income whites, "Rust Belt" and agricultural state residents.
Compared with the global liberalization advocated by Biden, they are more inclined to isolationism, agree with Trump's "America First" strategy, worry about the economy and employment, and represent the interests of the oil industry, automobile industry, industry, transportation industry, raw materials industry and other industries.
In terms of policy, Trump insists on "America First", protects the interests of domestic manufacturing in the United States, hopes to impose universal benchmark tariffs on foreign companies, increase energy supply, promote oil production, and provide tax breaks for oil, gas and coal producers.
We have summarized its core economic policies:
1. Trade policy
Plans to impose tariffs of at least 10% on most goods imported from other countries to the United States, and tariffs on Chinese imports may be raised to 60% or higher;
Introduced the Trump Reciprocal Trade Act, which aims to "stop American jobs from flowing overseas", gradually stopped importing necessities such as electronics, steel and medicines from specific countries, and prohibited companies from specific countries from owning infrastructure in the United States in areas such as energy, technology and farmland;
2. Fiscal and tax policies
Extended the Tax Cuts and Jobs Act signed by it in 2017, which reduced the corporate tax rate from 35% to 21%;
Plans to further reduce the corporate tax rate to 15%, a substantial tax cut for workers, including the elimination of the tip tax for restaurant and hotel workers;
Adhere to "America First", protect the interests of domestic manufacturing in the United States, and promise to "lower taxes, increase wages and increase jobs" for American workers by establishing a universal benchmark tariff that "rewards domestic production" and taxes foreign companies;
3. Immigration policy
Promise to carry out "the largest deportation operation in American history", planning to deport millions of illegal immigrants each year;
Plan to end the automatic citizenship of children of illegal immigrants;
Stop "birth tourism", implement a travel ban and suspend refugee admissions;
4. Energy policy
One of the top priorities is "DRILL, BABY, DRILL" (DRILL translates to drilling). Increase oil drilling and provide tax breaks for oil, gas and coal producers;
Oppose existing government subsidies for wind power development;
Plan to overturn the Biden administration's electric vehicle goals and vigorously develop the traditional auto industry;
5. Infrastructure investment
Say that taxpayers' money will be used for infrastructure projects such as roads, bridges, and dams;
Emphasize that the funds will not be "spent on meaningless green new scams";
6. Medical policy
Plan to restore its August 2020 executive order to ensure that basic drugs, medical countermeasures and key inputs are produced in the United States;
Consider repealing or improving the Affordable Care Act to reduce costs;
7. Cryptocurrency policy
Trump, who was once skeptical and critical of cryptocurrencies, has now changed his position and become a presidential candidate who supports cryptocurrencies.
In July 2024, at the Bitcoin Conference, Trump expressed his love for Bitcoin almost unreservedly, saying that the market value of Bitcoin would exceed that of gold, and after being elected, he would remove the crypto-unfriendly SEC chairman from office, and announced that he hopes the United States will become the "global cryptocurrency capital" and Bitcoin's "world superpower."
Some of Trump’s cryptocurrency policy proposals include:
Establishing a government reserve of Bitcoin: The government would “retain 100% of all Bitcoin currently held or acquired by the U.S. government in the future”
Establishing a cryptocurrency advisory committee.
Preventing the creation of a central bank digital currency (CBDC).
Impact on financial markets
After Trump is elected, he will most likely continue his previous policy thinking, continue to promote stimulus fiscal policies on a large scale, and put pressure on the Federal Reserve to implement a substantial interest rate cut, which is like a "continuation of the carnival" for the financial market.
US Dollar Index
Trump has always advocated a weak dollar policy.
Trump does not recognize the impact of a strong dollar on the economic interests of the United States. He believes that a strong dollar is an important obstacle to the recovery of the US manufacturing industry, and weakening the exchange rate of the US dollar against other currencies will help narrow the trade deficit and promote "re-industrialization."
Robert Lighthizer, the former trade representative of the Trump administration, is currently regarded as a candidate for Treasury Secretary and is also inclined to a weaker dollar.
However, the reality may not completely conform to Trump's wishes. Trump's signature economic policy is to increase tariffs on imported goods and reduce taxes. The foreign exchange market will adjust according to changes in foreign exchange demand. Tax cuts will bring upward pressure on interest rates. These two measures may instead boost the dollar.
US stocks
During Trump's previous term, the US stock market has always been regarded as one of his core achievements, so Trump's coming to power is expected to continue the long bull trend of the US stock market.
Trump has implemented large-scale fiscal stimulus policies, suppressed the dollar, and significantly reduced corporate tax rates, which will stimulate corporate profits and drive the stock market up.
However, there are also black swan factors, that is, his trade policies and international relations positions may affect the global economy, and thus affect the long-term performance of the US stock market.
From the perspective of sectors, traditional energy, defense and infrastructure-related industries may benefit, while environmental protection and renewable energy industries may face challenges.
Cryptocurrency
Trump's coming to power is conducive to the development of cryptocurrency.
According to his previous promise, Trump will promote more friendly cryptocurrency policies, which may include relaxing regulations or providing a clearer legal framework.
Previously, Trump said that if he was elected president, he would fire Gary Gensler, the current chairman of the U.S. Securities and Exchange Commission (SEC), and hire a regulator who supports cryptocurrency.
Among them, the DeFi sector will directly benefit from the weak regulatory environment. In the past, both UNI and AAVE were subject to strong regulation by the SEC. World Liberty Financial (WLFI), a cryptocurrency project previously issued by the Trump family, also belongs to the DeFi category. It has initiated a proposal on the Aave governance forum, hoping to build a customized lending market based on Aave V3.
Secondly, Musk's concept tokens, a die-hard supporter of Trump in this round of elections, will also benefit, the most typical of which is DOGE.
Musk once said that he wanted to create a "Department of Government Efficiency", referred to as DOGE, and the naming concept was suggested to Musk by the DOGE community. Trump also responded that if elected, he would establish the department, conduct a comprehensive financial audit of the government, and propose to reduce waste. Therefore, the performance of DOGE's currency price has also begun to be linked to the presidential election.
Gold
For gold, if Trump is elected, his "America First" policy and trade protection measures may increase geopolitical risks, which is good for gold, Bitcoin and other safe-haven assets. In addition, from the perspective of monetary attributes and financial attributes, Trump's weak dollar, tax cuts and tariffs may lead to rising inflation, and gold prices may remain strong.