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Donald Trump's presidency likely to benefit India, ASEAN countries as trade may diverts from China: Moody's

11 Nov 2024 Evaluate

Moody's Ratings in its report has said that Donald Trump's presidency may see trade and investment flows diverting away from China as the US tightens investments in strategic sectors but this shift might benefit India and ASEAN countries. The November 5 election of Trump as the next US President will likely materially shift its policies from those of the current Joe Biden administration. In a second Trump administration, Moody's expects large fiscal deficits, protectionist trade actions, climate-measure rollbacks, a stricter stance on immigration, and easing regulations. Trump is likely to pursue more aggressive immigration policies, including increased deportations, the construction of additional border barriers, stricter visa regulations, and reduced asylum grants.

Moody's said ‘Although aimed at reducing unauthorised immigration and prioritising legal immigration based on merit, they could lead to labour shortages in sectors that rely heavily on immigrant labour, such as agriculture, retail, hospitality, construction and healthcare’. About Trump's foreign policy, it said in the Asia-Pacific region, trade and investment flows might be further diverted away from China as the US tightens investments in strategic sectors, which would negatively affect China's economy and consequently dampen regional growth. It said continued US-China polarisation risks exacerbating geopolitical divisions in the region, increasing risks of disruption to the global supply of semiconductors.

In Europe, it said the reduced US support for Ukraine might increase European governments' fiscal burdens as governments initially try to compensate for the US support. It added ‘US disengagement from NATO would also increase security risks in Europe by emboldening Russia, putting countries along NATO's eastern border at greatest risk. Also, the proposed blanket tariffs and US-China tensions will likely hurt trading partners in the region, but could indirectly benefit Europe by making it a more attractive investment destination because of its relative policy stability’.


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