Author: TechFlow
TRUMP WIN, Donald Trump wins the 2024 US presidential election, returning to the White House after four years.
Businessman, real estate mogul, TV star, former president, Donald Trump - this political figure, under the shadow of four criminal prosecutions and 91 felony charges, is creating the most incredible "comeback" in American political history.
The White House, the august building that has witnessed the transition of 46 presidents, is about to welcome its first "returnee".
This is not only a narrative about politics, but also a critical moment that will profoundly impact the global financial markets.
Trump's signature "America First" policy, his controversial trade stance, and his support for cryptocurrencies like Bitcoin, could all trigger a new wave of turmoil in the global financial markets.
As Trump's winning chances rise, Bitcoin continues to break new historical highs.
As Wall Street traders watch this political drama unfold, and global investors weigh the various possibilities, we may be standing on the threshold of a new financial era. An era that will be redefined in a unique way by a highly controversial political figure.
What will Trump's future economic policies be, and how will they impact the US stock market and the cryptocurrency market? TechFlow is here to answer and explore.
Summary of Trump's Economic Policies
First, we need to know Trump's base, which is mainly the "rednecks" - low-income white evangelicals, residents of the "Rust Belt" and agricultural states.
Compared to the globalization advocated by Biden, they are more inclined towards isolationism, identifying with Trump's "America First" strategy, concerned about the economy and employment, representing the interests of industries such as oil, automotive, manufacturing, transportation, and raw materials.
In terms of policies, Trump insists on "America First", protecting the interests of domestic manufacturing, hoping to impose a universal baseline tariff on foreign companies, increase energy supply, promote oil production, and provide tax cuts for oil, natural gas and coal producers.
We have summarized his core economic policies:
1. Trade Policy
Plan to impose at least a 10% tariff on most goods imported into the US from other countries, with the possibility of raising tariffs on Chinese imports to 60% or higher;
Introduce the "Trump Reciprocal Trade Act" aimed at "preventing American job opportunities from going overseas", gradually phasing out imports of essential goods such as electronics, steel, and pharmaceuticals from specific countries, and banning certain foreign companies from owning US infrastructure in energy, technology, and agriculture;
2. Fiscal and Tax Policy
Extend the "Tax Cuts and Jobs Act" he signed in 2017, which reduced the corporate tax rate from 35% to 21%;
Plan to further reduce the corporate tax rate to 15%, significantly reduce taxes for workers, including eliminating the tip tax for restaurant and hotel workers;
Insist on "America First", protect the interests of domestic manufacturing, promising to "lower taxes, raise wages and create more jobs for American workers" through "rewarding domestic production" and a universal baseline tariff on foreign companies;
3. Immigration Policy
Pledge to carry out the "largest deportation operation in American history", planning to deport millions of illegal immigrants annually;
Plan to end automatic citizenship for children of illegal immigrants;
Stop "birth tourism", implement travel bans and suspend refugee entry;
4. Energy Policy
One of the top priorities is "DRILL, BABY, DRILL". Increase oil drilling and provide tax cuts for oil, natural gas and coal producers;
Oppose existing subsidies for wind power development;
Plan to overturn the Biden administration's electric vehicle targets and strongly support the traditional automotive industry;
5. Infrastructure Investment
Stated that taxpayer money will be used for road, bridge, dam and other infrastructure projects;
Emphasize that funds will not be "wasted on meaningless green new scams";
6. Healthcare Policy
Plan to reinstate his August 2020 executive order aimed at ensuring basic medicines, medical countermeasures and critical inputs are produced in the US;
Consider repealing or improving the Affordable Care Act to reduce costs;
7. Cryptocurrency Policy
Trump, who previously held a skeptical and critical attitude towards cryptocurrencies, has now changed his stance and become a supporter of cryptocurrencies as a presidential candidate.
In July 2024, at the Bitcoin conference, Trump expressed his love for Bitcoin almost without reservation, stating that Bitcoin's market capitalization will surpass gold, and that he will fire the SEC chairman who is unfriendly to crypto, and announced his hope that the US will become the "global capital of cryptocurrencies" and the "world superpower of Bitcoin".
Some of Trump's proposed cryptocurrency policies include:
Establishing a government Bitcoin reserve: the government will "hold 100% of the Bitcoin currently owned or future acquired by the US government"
Forming a Cryptocurrency Advisory Council.
Preventing the creation of a Central Bank Digital Currency (CBDC).
Impact on Financial Markets
After Trump's election, he will most likely continue his previous policy direction, continuing to aggressively push for stimulative fiscal policies, and putting pressure on the Federal Reserve to implement significant rate cuts, which would be like a "continuation of the party" for the financial markets.
US Dollar Index
Trump has always advocated a weak dollar policy.
Trump does not recognize the impact of a strong dollar on the interests of the US economy, believing that a strong dollar is a major obstacle to the revival of US manufacturing, and that weakening the dollar's exchange rate against other currencies will help narrow the trade deficit and drive "re-industrialization".
Robert Lighthizer, the former US Trade Representative under Trump, who is currently seen as a candidate for Treasury Secretary, also leans towards a weaker dollar.
However, reality may not completely align with Trump's wishes. Trump's signature economic policies of raising import tariffs and cutting taxes could actually put upward pressure on interest rates, which could in turn push the dollar higher.
US Stocks
During Trump's previous term, he always viewed the US stock market as one of his core achievements, so Trump's return to power is expected to continue the long bull trend of the US stock market.
Trump's implementation of large-scale fiscal stimulus policies, suppression of the dollar, and significant reductions in corporate tax rates will stimulate corporate earnings and drive stock market gains.
However, there are also "black swan" factors, such as his trade policies and international relations stance, which could impact the global economy and in turn affect the long-term performance of the US stock market.
In terms of sectors, traditional energy, defense and infrastructure-related industries may benefit, while environmental and renewable energy industries may face challenges.
Cryptocurrencies
Trump's return to power will be beneficial for the development of cryptocurrencies.
According to his previous commitments, Trump will promote more crypto-friendly policies, which may include relaxing regulations or providing a clearer legal framework.
Previously, Trump had stated that if elected president, he would fire the current chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, and hire regulators who support cryptocurrencies.
In this regard, the DeFi sector will directly benefit from a weak regulatory environment, as both UNI and AAVE have been subject to strong SEC regulation in the past. The cryptocurrency project World Liberty Financial (WLFI) previously issued by the Trump family also belongs to the DeFi category and has initiated a proposal in the Aave governance forum, hoping to build a customized lending market based on Aave V3.
Secondly, the concept token of Musk, a staunch supporter of Trump in this election, will also benefit, the most typical of which is Doge.
Musk had stated that he wanted to create a "Department of Government Efficiency" (DOGE), and this naming concept was suggested by the Doge community to Musk. Trump also responded that if elected, he would establish this department, conduct a comprehensive financial audit of the government, and propose to reduce waste. Therefore, the price performance of Doge has also been linked to the presidential election.
Gold
For gold, if Trump is elected, his "America First" policy stance and trade protectionist measures may exacerbate geopolitical risks, which would be beneficial for gold and Bitcoin as safe-haven assets. Additionally, from the perspective of monetary attributes and financial attributes, Trump's weak dollar, tax cuts, and tariff hikes may lead to rising inflation, which could keep gold prices strong.
