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Trump’s efforts to increase fossil fuel production under the pretext of “American energy dominance” are also likely to reverse US climate initiatives.
India and other Asian nations are anticipated to gain from growing US-China tensions and possible investment restrictions in strategic sectors, as Donald Trump is expected to become the next US president following the recently hotly contested presidential elections, according to Moody’s Ratings.
“As the US tightens investments in strategic sectors, trade and investment flows in the Asia-Pacific region may be further redirected away from China. This would have a negative impact on China’s economy and thereby slow regional growth.” Nonetheless, the global rating agency stated that this change might be advantageous for ASEAN nations and India.
The international organisation predicted that the Trump administration would significantly change its stance on trade, immigration, climate change, and the economy compared to the current US President Joe Biden’s administration.
The rating agency went on to say that Trump could pursue his agenda on all fronts through both executive and legislative channels.
It further added that as a candidate, Trump promised tax reform, with plans to make the 2017 Tax Cuts and Jobs Act permanent, lower the corporate tax rate, and implement income tax relief. Federal deficits are predicted to rise as a result of these measures as well as broad and targeted tariffs, such as high tariffs on imports from China.
It made clear that Trump’s US will pursue a protectionist trade policy, which would be more disruptive and raise the risks to world economic expansion.
It further stated that “protectionist measures could disrupt global supply chains and negatively affect sectors like manufacturing, technology, and retail that rely on imported materials and goods.”
Although a divided Congress might slow down or modify the scope of such measures, the credit rating agency stated that Trump’s trade policy approach would likely have immediate effects on the manufacturing sector.
Reversals of US climate initiatives are also likely as Trump aims to increase fossil fuel production under the pretext of “American energy dominance.”
The United States’ pledges to cut greenhouse gas emissions would be compromised by decreased financing for clean energy projects and a potential exit from the Paris Agreement.
It is anticipated that state laws and private sector efforts, especially in the field of renewable energy, will partially offset any decline in federal support for green technologies.
Given that wind and solar energy are now cost-competitive in many regions of the nation, some industry experts predict that market-driven growth in these energy sources may continue.
“The change would probably lead to a resurgence of support for the fossil fuel industry, a decrease in financing for green technologies and clean energy, and a relaxation of environmental laws, including those pertaining to the EPA’s initiatives to lower emissions in the automotive and power industries. The agency predicted that the Trump administration would rescind pledges to achieve net-zero greenhouse gas emissions by 2050 and withdraw from the Paris Agreement once more.
According to Moody’s, Trump is anticipated to take a more lenient stance on regulations, which would include looser guidelines for small and midsized banks. This could lower their capital needs but also put creditors at greater risk.