Key Points
- Singapore-based investment firm, Temasek, expresses worries about the impact of a potential Trump victory on global economy.
- Elon Musk, a Trump supporter, suggests major budget cuts if Trump wins, while Temasek sees benefits in Kamala Harris’s policies for emerging markets.
Singaporean investment company, Temasek, has voiced concerns about the potential repercussions of Donald Trump’s potential presidential win on the global economy.
A report by Bloomberg suggests that Rohit Sipahimalani, Temasek’s chief investment officer, believes that Trump’s policies could negatively affect international growth in the long term, despite his appeal to markets due to his stance on tax cuts and deregulation.
Impact on U.S. and Global Companies
With the U.S. presidential election looming, Sipahimalani suggests that Trump’s policies could obstruct both U.S. and international companies, particularly those with substantial overseas operations.
The Bloomberg report highlights a contrast in Temasek’s assessment with some pro-Trump investor sentiment. For instance, Standard Chartered has recently predicted a Bitcoin (BTC) rally to $125,000 if a Republican government takes charge.
Trump’s Policies and Emerging Markets
Sipahimalani suggests that a Trump victory might strengthen the U.S. dollar and increase interest rates, negatively affecting emerging markets.
Trump’s trade policies, including tariffs, are also a cause for concern for Temasek as these measures often introduce uncertainty, potentially deterring global investment.
The Republican candidate has promised to bolster the crypto market’s growth in the U.S. by enacting policies such as retaining the country’s BTC holdings and firing the Securities and Exchange Commission Chair Gary Gensler.
Elon Musk, a Trump supporter, has recently proposed that he would significantly reduce U.S. federal spending if Trump wins the election.
Musk, who is speculated to be considered for a cabinet role by Trump, believes that major budget cuts would optimize government spending and enhance economic stability.
His position aligns with Trump’s vision of economic reform, including potential tariffs to increase revenue, despite warnings from economists that these could increase costs for U.S. households.
On the other hand, Sipahimalani believes that Kamala Harris’s policies could benefit emerging markets. Some business leaders, including Mark Cuban, suggest that Harris’ strategy might better support growth in innovation-driven sectors, especially green tech and healthcare.
However, the Democratic nominee has not clarified her plans for emerging markets such as crypto. Despite this, Cuban has expressed confidence in a Harris administration’s potential to stabilize and boost innovation in these areas.
Temasek’s cautious stance reflects its focus on global economic stability and the potential ripple effects of U.S. policies. The firm, which recently announced plans to invest $30 billion in the U.S., recognizes the significance of U.S. policy on international markets.
However, it alerts that considerable “tail risks” could emerge in the next few years, depending on the election outcome, potentially causing turbulence for global investors and businesses.