Experts divided on what a Trump presidency will bring

American ascendancy or blue-collar betrayal, a disaster for the global economy or a golden opportunity for post-Brexit Britain, experts are divided on what a Donald Trump presidency could bring.

President-elect Donald Trump shakes hands with his vice-president Mike Pence. Picture: AFP/Getty Images
President-elect Donald Trump shakes hands with his vice-president Mike Pence. Picture: AFP/Getty Images

Throughout his campaign the billionaire tycoon promised to “make America great again” by, in part, tearing up international trade agreements, cutting corporation taxes and aggressively pursuing jobs lost overseas to China, Mexico and elsewhere.

Yet as the property tycoon appeared to be clearing a path for the White House, panic seized global markets and sent the dollar tumbling, with analysts warning of a “gigantic shock” quaking the world economy.

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Professor Scott Lucas, a US citizen who teaches American Studies at the University of Birmingham, said a Trump presidency has the potential to be “very dangerous, not only for America but for America’s relations around the world”.

“He is probably the most unqualified person I have seen to be president,” he said.

“We know he is divisive, we know he is aggressive and we have to deal with an unprecedented situation.

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“My hope is that 240 years ago the US created a series of checks and balances for this kind of situation and they will work.”

Critics accused Mr Trump of running a campaign on emotive promises and slogans that did not stand up to scrutiny.

Mr Lucas said that such a style of leadership could lead to a disconnect between the president and intuitions including the military, the Federal Reserve, the judiciary and his own party.

Meanwhile, the cautious approach to foreign policy that was the mark of Barack Obama’s presidency will likely be replaced by the opposite.

“Now we have a guy that thinks Vladimir Putin is a jolly good guy,” Mr Lucas said.

“But for now the immediate things to watch are the markets and the institutions that are going to have to deal with him.”

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said it was “entirely possible” that the US economy may enter into recession in the first quarter of 2017 as the shockwaves rocking global markets translate into a consumer confidence crisis.

“A US recession is never good for the UK economy. Next year we will be under pressure from rising inflation and it is another reason to be less optimistic,” he told the Press Association.

Market confidence is expected to be shaken by Mr Trump’s repeated threats to either tear up existing trade deals or scrap a series of arrangements in the pipeline, including the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP).

“TTIP and the TPP are dead, at least in anything like their current form,” Mr Shepherdson said.

“That’s behind the reaction for the stock market, for business it is not good news.

“It is going to be very messy but we need to see when he actually gets into office and starts legislating, because that’s going to be against the background of an economy that is weakened.”

The analyst poured further cold water on hopes of a fast-tracked post-Brexit trade deal between the US and the UK, which had been promised by his trade adviser after outgoing president Barack Obama said Britain would be “back of the queue”.

Mr Shepherdson said: “It may well be that Trump says we will be at the front of the queue but Congress may not put it through. Trade deals are toxic, even if we do get one it could take years.”

The Democrats are sure to deploy all resources at their disposal to stall Trump’s ambitions, including clogging up the Senate with “filibuster” - where senators block debate over legislation with irrelevant speeches.

A centrepiece of his campaign was to build a wall along the US border with Mexico to cut off immigration and drug smuggling routes, paid for by the Mexican government.

“That will hit legal challenges very quickly,” Mr Shepherdson said.

Mr Trump also threatened to alter the US’s membership of Nato and criticised the body for providing members with protection at the cost of wealthy nations.

However, any attempt to “walk away” from the alliance would similarly be blocked by Congress, Mr Shepherdson said.

He added: “These things sound alarming but people say crazy things to get elected.

“Americans are going to be worse off unless they are rich - that’s the white working-class who put him into office.”

Despite signs of a market meltdown, some remain upbeat about the prospect of a Trump administration.

David Buik, market commentator at Panmure Gordon, said: “The fact remains that if he implements policies that make sense like cutting corporation tax and repatriating jobs from Apple, from Ford and Starbucks, it could make the US in a couple of years time incredibly successful. But he needs around him an administration that will stop him doing anything impulsive.”

Mr Buik added: “We just need to step back from the breach and pause for breath. For the UK it might well work. We may well get a free market deal.”