It came as a surprise even to the most disinterested observers. A few days to the U.S Election Day, everything seemed to be going Clinton’s way but surprisingly Donald Trump managed to pull a last-minute-surprise that shocked the world. In Singapore, the Prime Minister Lee Hsien Loong was among the first to congratulate the president-elect but he also noted it was a surprise.
The ‘America First’ President
While the rest of the world is seeking global connections, Trump has been categorical in his anti-globalization stance. Some of the countries in Asia that have been on his radar include China and MPM Capital Singapore SME Business Loans. It is no wonder this is where the first impacts started being felt when the Republican won key battleground states including Florida, North Carolina and Ohio.
Across Asia like the rest of the world, the effects of Trump’ victory were immediate. In Singapore, US Stock index futures sales were pushing losses to the limit as it became clear Clinton was losing and this was replicated elsewhere across Asia. The Strait Times Index slumped 1.4% as at 2,781.31 slightly before 4pm on November 9th. Earlier the Index had tumbled 2.3%, which was the lowest since the other surprise vote in Britain.
In Japan, things were not better with the stocks crumbling 5.4% by close of trade. Hong Kong on the other hand tanked down 3% while Shanghai seemed to hold strong with only a 0.6% decline. Seoul slumped 2.3%. The results in the market are expected considering Hillary Clinton had been the favorite of most Asian countries except for China.
A study by the Global Times in March showed that most people in Singapore, Taiwan, Japan, South Korea, Indonesia, Malaysia and Thailand preferred Clinton to Trump. This was due to the anti-Muslim stance that Trump had taken early in the campaigns. The results also come from economic fears that have been elicited by the America First rhetoric that trump has been propagating.
Analysts now fear that Asia is still going to feel the aftershocks of Trump’s victory for weeks or even months as he defines his policy. One of the greatest fears is of course the scrapping of the Trans-Pacific Partnership (TPP), which was at the core of Obama’s pivot Asia campaign.
With countries like Singapore going through turbulent economic phases, these markets cannot afford to lose any more markets for their commodities. This means the immediate slump in the markets is just a beginning, and people have started taking quick business loans
Is Trump’s Victory Bad News for Asia?
The results are in and the world has to accept that Trump is the president-elect. The brash billionaire has already been hosted by the outgoing president at the White House and it seems the impact of his presidency is now starting to emerge. In Singapore and the rest of Asia, the news of his election jolted the markets from Tokyo, Hong Kong to Shanghai. Asia has been a key issue during the campaigns and Trump has not hidden his disdain for alliances and trade pacts formed by the past administrations with the region.
A Shell-shocked Region
Before November 8th, the entire Asian region was largely pro-Clinton except for China, which always has an ambiguous relationship with the U.S. The former secretary of state represented the status quo and it is obvious Singapore and the rest of Asia did not want things to be ruffled. It is no wonder then that Trump’s victory shocked the region.
To assess the future impact of a trump presidency in Asia, you have to look at how the markets reacted in the region. All regional markets in Asia closed low and money was moving to safe haven stocks such as gold and currencies such as the yen. Japan’s Nikkei 225 took a hit with a 5.4% drop while the Hang Seng in Hong Kong lost points closing at 2.2% from the previous session. The Kospi in Singapore closed 2.7% lower and even in Shanghai the Composite lost 0.6%.
What Trump Really Means for Asia
It is true the markets are recovering remarkably, but this is just a temporary correction according to economic experts. During the campaigns, Trump was categorical that China will be labeled a currency manipulator something that will greatly affect the two super power’s relations. In Singapore, China, India and Taiwan, there are fears of job losses if American companies are forced to return operations to their homeland.
The president elect promised to slap American firms abroad with heavy penalties and this will force them to cut down operations in Asia. China is also worried about the proposed punitive tariffs of its products by Trump because this would hurt its economy badly. If China suffers, the rest of the region will feel the impact as has been witnessed over the last two years. If these tariffs are imposed on South Korea and Japan, things will only get worse for the Asian economy.
Truth be told, there are many uncertainties about what Trump will do and what he won’t but one thing is clear; Asia is holding its breath hoping the president will not make good his threats.