The financial markets have assessed Trumponomics and crafted a playbook hash-tagged #TrumpTrade – bearish on bonds on inflation expectations and bullish on stocks on hopes of cuts in taxes and regulatory binds. There is no playbook yet hash-tagged for the spectrum of geopolitical issues, but the possible return of Trump has triggered the quest for trade-offs, pre-emptive moves to insure from risks.
Last month, President Volodymyr Zelenskyy sought time in New York to understand Trump’s plans to end the war in Ukraine. Also in the queue was Prime Minister Keir Starmer seeking to underline the special relationship between the US and the UK; the effort didn’t age well as the Trump campaign filed an extraordinary complaint against Starmer’s Labour party for what it claims is “interference” in the US presidential election. This week saw German Chancellor Olaf Scholz in New Delhi seeking to boost economic ties.
The existential question about Taiwan surfaced following China’s war games, described as the ‘anaconda strategy’, around Taiwan. The US responded by sending a warship through the Taiwan Strait even as former US National Security Adviser John Bolton warned Taiwan could “potentially be toast if Trump wins”.
The possibility of a Trump presidency has also emboldened risk-taking. Reports that are yet to be conclusively proved or denied claim Russia has inducted North Korean troops for the war in Ukraine. In West Asia and Europe, speculation has been rife that peace must wait till the next US president is elected. On Saturday, Israel bombed military targets in Iran a day after Secretary of State Antony Blinken failed to seal a ceasefire in Gaza and Lebanon with West Asian leaders in London.
The outcome of the US election will be known after November 5. This week, a CNN poll found the contenders locked in a tie on the final stretch; most polls suggest the result is TCTC or too close to call. For whatever reason, consensus outside the US is zeroing on Trump. In 2016, the debate was whether Trump must be taken literally or seriously. In 2024, it would seem Trump is being taken both literally and seriously.
Shankkar Aiyar
Author of The Gated Republic, Aadhaar: A Biometric History of India’s 12 Digit Revolution, and Accidental India
(shankkar.aiyar@gmail.com)