Well, what can you say. The polls and pundits were wrong, or at least the clear majority of them. Donald Trump will be the next President of the United States of America after beating Hillary Clinton in the race to White House. Theresa May, the UK Prime Minister congratulated Mr. Trump this morning in a statement from Downing Street, “I would like to congratulate Donald Trump on being elected the next President of the United States, following a hard-fought campaign.” What will a Trump Presidency mean to the world economy and to the Sourcing industry? HSBC analysts have predicted “Trump will throw US economy into recession 'after a year or two'. Contraction in the labor force and disruption to world trade”.
The victory achieved by Donald Trump has left many in shock, markets tumbled on the news this morning as investors and business leaders tried to understand what a Trump presidency would look like, the sad truth is we don’t know. Much of what is said on the election is forgotten in office and therefore many outlandish policies Mr. Trump campaigned are unlikely to gain traction. Ricardo Reis, an economist at the London School of Economics said “For sure, this is a huge increase in uncertainty. And for the most part what certainty is available seems bad. Like the Brexit vote, this raises the likelihood that trade deals will be repudiated and borders will be closed.” His attacks on trade and on the loss of American jobs may see a more protectionist America, which could see a fall in outsourcing and offshoring contracts but it is too early to know.
Over the coming days, weeks and months we will gain a more comprehensive picture of the new Presidents regime. Already over 1000 CEO’s of US companies have written an open letter to Mr. Trump warning of “an urgent need to restore faith in our vital economic and government institutions” (However the letter was written pre-election result for whoever won). Business uncertainty is high and a President Trump must act to maintain economic and business confidence. Otherwise the American dream may be a footnote in history.
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