Anyone surprised by the result underestimated the biggest issue for many Americans: that they felt poorer and were tired with how the country was being run. It is a theme that has played out here in New Zealand and in many other countries.
As with the US election outcome itself, the best clues can be taken from the financial markets as to what the future holds.
US stocks surged following Trump’s victory, in part because of the certainty of the outcome but also on sentiment the Republicans could repower the economy and drive equities higher, while companies linked to Trump backer Elon Musk also benefited.
Commodities went the other way with prices falling as investors saw Trump’s proposed trade tariffs creating downside for other economies.
While there is some doubt over whether Trump will actually go through with the tariff threat, the market senses there will be a fallout.
Stocks in global shipping companies, for example, dipped on Wednesday with Maersk, the world’s second-largest container shipping group, falling 7.6%.
For New Zealand, Trump’s tariff plan is problematic, not just for our exporters, but for consumers amid uncertainty about whether US import tariffs would fuel higher prices and inflation.
Trump plans to impose a 10% levy on all US imports and a 60% tax on goods coming from China. The tariffs will fund his plans to extend a series of tax cuts, which he introduced while president in 2017.
The tariffs if they do go ahead have the potential to cause a lot of pain for New Zealand exporters. We currently export about $8 billion a year to the US, about the same as we send to Australia, although much less than exports to China.
The impact on global growth is a bit uncertain, although the general consensus is that the proposed tariffs are likely to stoke inflation pressure.
Trump’s economic policies will certainly be in focus when the US Federal Reserve releases its interest rate decision this morning.
With Trump back in power, Wall Street appears to be reining in expectations for rate cuts, predicting a more cautious approach from the Fed.
That might lead to the central bank cutting just once next year, according to investment bank Nomura.
For its part, New Zealand’s central bank does see a bit more inflation from a Trump presidency but that will be “manageable” according to deputy governor Christian Hawkesby.
“On the margin, it’s a higher inflation package than the alternative, but one that’s very much manageable,” he said.