Sun Nov 10 09:46:24 UTC 2024: ## Trump’s Return: US-China Tensions Expected to Benefit India and ASEAN
**New York, October 26, 2023** – With Donald Trump poised to become the next US president, the global landscape is expected to shift significantly, particularly in Asia. According to Moody’s Ratings, rising US-China tensions and potential investment restrictions in strategic sectors could benefit India and ASEAN countries, while negatively impacting China’s economic growth.
“The Asia-Pacific region might see trade and investment flows diverted away from China as the US tightens investments in strategic sectors,” said Moody’s, adding that this shift could benefit India and ASEAN nations.
Trump’s administration is expected to adopt a significantly different approach to its predecessors on various fronts, including fiscal, trade, climate, and immigration.
“Trump could have both legislative and executive avenues to advance his agenda on every front,” said Moody’s, noting that he has promised tax reforms, including making the 2017 Tax Cuts and Jobs Act permanent, lowering the corporate tax rate, and implementing income tax relief. These initiatives, combined with targeted and broad tariffs, particularly on Chinese imports, are likely to increase federal deficits.
Trump’s protectionist trade policies are expected to be more disruptive than previous administrations, posing risks to global growth.
“Protectionist measures could disrupt global supply chains and negatively affect sectors that rely on imported materials and goods, such as manufacturing, technology, and retail,” Moody’s said.
The manufacturing sector is expected to face immediate impacts from Trump’s trade policy, although a divided Congress may slow down or modify the scope of these measures.
Trump’s return is also likely to see reversals in US climate initiatives. The administration is expected to prioritize fossil fuel production under the banner of American energy dominance.
“Reduced funding for clean energy projects and a possible withdrawal from the Paris Agreement would undermine the US’s commitments to reduce greenhouse gas emissions,” said Moody’s. While federal support for green technologies may decline, private-sector initiatives and state-level mandates, particularly in renewable energy, are expected to partially offset this shift.
However, the overall impact is expected to be a renewed support for the fossil fuel industry, reduced funding for clean energy and green technologies, and relaxed environmental regulations.
Finally, Trump is expected to pursue a lighter regulatory approach, potentially relaxing rules for small and midsized banks, which could reduce their capital requirements but also expose creditors to higher risks.
Overall, Trump’s return is expected to bring significant changes to the global landscape, with potential benefits for India and ASEAN countries amidst rising US-China tensions.
First Piper 