What a Trump victory means for US economy

WASHINGTON, Nov 06 (AFP): Donald Trump's victory in the 2024 US presidential election is likely to usher in a raft of economic changes at home and abroad, touching everything from foreign trade to the independence of the US central bank.

He will reap the benefits of an economy that is in good shape, with strong growth, low unemployment, and inflation that is rapidly approaching the Federal Reserve's long-term two per cent target after years of higher interest rates.

Yet his victory came as voters have expressed dissatisfaction with the cost of living as a result of a post-pandemic surge in inflation that pushed consumer prices up by more than 20 per cent.

While many of the incoming Republican president's proposals will ultimately live or die in Congress-which controls the purse strings of the world's largest economy-there is still a significant amount he can do to shape economic policy.

On the campaign trail, Trump said he would put in place across-the-board import tariffs of between 10 and 20 per cent in a bid to raise revenues, protect domestic industries, and bring jobs back to the United States.

He has also threatened to impose a 60 per cent tariff on Chinese goods, and even floated a 200 per cent-plus levy on cars made in Mexico.

"To me 'tariff' is a very beautiful word," he said in a recent Fox News interview. "It's a word that's going to make our country rich again."

Trump "has made no mystery of the fact that he's deeply enamored with tariffs as a policy tool," Kimberly Clausing, a nonresident senior fellow at the Peterson Institute for International Economics (PIIE) told AFP on Tuesday, adding she thought he would put in place large tariffs if elected.

Meanwhile, the dollar surged and bitcoin hit a record high Wednesday as traders bet on a victory for Donald Trump as he picked up two of the key swing states needed to take the White House, ramping up bets on fresh tax cuts, tariffs and rising inflation.

While polls had shown the race on a knife edge, the Republican appeared to be faring better than his Democratic opponent Vice President Kamala Harris as results rolled in.

Both candidates have picked up expected wins in safe states, but indications that the business tycoon was edging it boosted the so-called Trump Trade.

While many key swing states were too close to project, Trump won Georgia and North Carolina, with others still up in the air.

News that the former president's party had taken control of the Senate boosted the prospect of sweeping tax cuts, more tariffs and deregulation-seen as a boost for the greenback.