Donald Trump (Republican Party) came out triumphant against Kamala Harris (Democratic Party), Jill Stein (Green Party), and Robert Kennedy (Independent). The results of the US presidential elections were declared on 6th November 2024 officially, after fulfilling the free speech constraints throughout the entire election duration. This marks a second term for former president Trump in a heated election, despite his recent criminal conviction and near-miss in an assassination attempt. The post-COVID-19 economic woes, and an urge to shift from the Biden administration, compelled the voters to connect to the Republican campaigns. In addition, the stark warnings about immigration and a push for isolationist policies lead to the historic return of Donald Trump. However, the Republican win would be pivotal to global economies, in addition to that of the US.
The re-election of Donald Trump could potentially spell trouble for the access to inexpensive Iranian oil. It is anticipated that Trump would reintroduce his ‘maximum pressure policy’ on Iran’s oil industry, to curtail Iran’s nuclear program. The sanctions if tightened, would result in a hike in the oil prices. The hike would directly affect the refining industry in China. According to the US Energy Information Administration, in 2023, China’s crude oil imports increased the most from Russia, Iran, Brazil, and the US, compared to 2022. China imported 54% more crude oil (1.1 million b/d) from Malaysia in 2023. However, it is believed that the oil shipped from Iran to China is relabeled as originating from countries such as Malaysia, the United Arab Emirates, and Oman to avoid the US sanctions, against countries engaging in petroleum transactions with Iran.
The 'teapot' refineries would be the hardest hit. The latter are already going through hard times due to the weak fuel demand and reduced profit margins. The US extended sanctions to target 'dark fleet' vessels that transport Iranian oil, from deliveries in China to transshipment hubs such as Malaysia, which is expected to additionally hit the Ship-To-Ship (STS) activities. The policy would mean increased inflation, currency depreciation, and rising unemployment for the Iranian economy. This would heighten regional tensions in the Middle East region with Iran seeking support from Hezbollah and the Houthis in Yemen.
The return of Donald Trump to the White House could bring fortune to the Indian economy. The increase in economic activity in the US can have a positive impact, with a ripple effect on the Indian economy, as it is a major exporter of information technology services, pharmaceutical products, gems, and jewelry to the region. Additionally, India’s fortune is anticipated, in the light of fresh tariffs on China that Trump has already promised. The US tariffs on China would encourage more businesses to shift their manufacturing to India. However, the levy of similar tariffs, on the US companies that have employees in India, if the government decides so, might restrain the Indian economy. However, Trump’s proposal to reduce the corporate tax rate for domestic production from 21% to 15% could benefit IT services demand by alleviating budgetary constraints for US firms. This is anticipated to have a positive impact on the country’s long-term GDP. Deriving from the first term of Trump, the India-US defense trade continuity could mean improved sourcing of hardware and technology for defense/space.
During his first term, Trump imposed strict regulations on H-1B visas, resulting in significant denial of both. Such regulations could adversely affect domestic IT services, especially the ones reliant on these visas. Furthermore, Trump’s campaign also places substantial equity on the end of automatic citizenship for children. The law denies automatic citizenship for children born to illegal immigrants. The bill also specifies the group, whose children would be given automatic citizenship of the US. It will direct federal agencies to require that at least one parent be a US citizen or lawful permanent resident for the future children to become automatic US citizens. This law is anticipated to affect a significant number of green card-holder Indians in the US.
The US- India Medicine Partnership is anticipated to strengthen during the Trump administration. According to IQVIA, Indian companies provided $219 billion in savings to the US healthcare system in 2022 and a total of $1.3 trillion between 2013 and 2022. Thus, the sustainability offered by the Indian drugs to the overall health system of the US can increase the penetration of the Indian drugs in the US market. This would improve the pricing of the Indian generic firms. Additionally, the deregulation of Indian generics in the US market, owing to the drug shortages, could lead to increased penetration.
The shift of power in the US could potentially bring new dimensions to the stake of thek US in both the Israel and Gaza, and the Russia and Ukraine conflicts. Trump’s foreign policy during his first term focused on reducing the US involvement in overseas conflicts and prioritizing American interests. However, during his 2024 election campaign, Trump strongly condemned Hamas for its attack on Israel. He has consistently backed the Israeli Prime Minister and urged him to secure a decisive victory over Hamas. Trump’s alignment with Israel indicates the US can act as an unwavering support to Israel's government, as against the stand of the Biden administration, which had at times slowed weapon deliveries to Israel in response to civilian casualties. Additionally, Trump has had an ambitious say on the Russia-Ukraine war, claiming he could end the war within a day. The Biden administration had provided substantial military aid, including advanced weapons systems to Ukraine, however, Trump has always been skeptical about the same. Furthermore, during his first term, he temporarily withheld aid to Ukraine. Thus, Trump’s pragmatism is anticipated to halt the US aid to Ukraine, potentially weakening Ukraine's defense against Russia. Summarizing, it is believed that Trump addresses foreign conflicts with an 'America first' philosophy, and thus, the US’s role in international conflicts is anticipated to be more restrained in advocating negotiated solutions.
Encapsulating, the US presidential election is anticipated to be much more than the US picture. It will significantly affect the global economy and international relations. Also, it will demonstrate a substantial impact on various sectors, booming some, such as IT and pharma, while creating tensions for others including oil and refineries. The elections will also be pivotal to the US visa and citizenship access. Thus, the upcoming reign of the US government is anticipated to be a major governing factor for the global economy.