With the EU referendum and the election of Donald Trump, 2016 has been an interesting year. Neither result was predicted by the experts or pollsters who get paid so well to know ‘what people think’. And, in both cases, the victors made campaign commitments that were outright nonsense.
Populist pledges to protect domestic jobs by restricting free trade proved a key feature of both the Brexit campaign in the UK and the presidential election race in the US. Although such rhetoric can seem very appealing, history suggests protectionist policies ultimately do far more harm than good.
Despite widespread calls for fiscal stimulus, the Chancellor confirmed the government will continue with austerity, albeit a little less aggressively.
Following the election of Donald Trump as the next President of the United States, investors should take note of the hidden costs of protectionism.
Donald Trump will become the 45th President of the United States, and the Republicans will retain control of the House and the Senate for the 115th Congress.
In an age where opinion is so freely available, it’s a pleasure to listen to experts. Sir Christopher Meyer, British ambassador to the US from 1997 to 2003, gave our guests a fascinating insight to the government’s options following Brexit and to the US presidential elections.
One of the most overlooked risks for financial markets over the next decade is the potential for the US to impose tariffs on imports. This risk is greatest if Donald Trump wins on 8 November. Yet our analysis suggests conditions are ripe for protectionism to have broader popular appeal: less extreme politicians than Mr Trump could use it to secure votes.
The period since the UK voted to leave the European Union (EU) reminds us of the Phoney War. Although we have a new prime minister, little has changed, other than sterling’s precipitous decline.