What will happen in a few weeks after Trump becomes President?
Donald Trump will officially become the 45th President of the United States on January 20. Let’s take a look at what he’s going to do or what’s going to happen in a few weeks or more after he becomes President.
the U.S. will leave the TPP
First of all, we have the TPP, Trans-Pacific Partnership, which 12 nations from Pacific region including the U.S. agreed on its framework in October 2015. The TPP is an agreement to create a huge free trade zone around Pacific with such nations as the U.S. and Japan. After the agreement of 2015, parliament of each nation is supposed to approve the TPP.
But President-elect Trump does not like the TPP since long ago and says that the U.S. will leave the TPP “immediately” if he becomes President. If the U.S, the largest economy among TPP nations, leaves, the TPP will be virtually dead.
On the foreign exchange matter, he said that he would designate China as a currency manipulator. If the U.S. designated a nation as a currency manipulator, the US government can impose some sanctions on the nation. But it’s unlikely that sanctions will hurt China, now the 2nd largest economy in the world.
Trump also says that the U.S. will re-negotiate or even secede from NAFTA, North American Free Trade Agreement. NAFTA came into effect in 1994 and has existed for the last 23 years. But he says he will change status quo.
On the healthcare issue, Trump says that his administration will abolish the new healthcare system created by Obama administration, “Obamacare”. Obamacare is to create a healthcare system in which everyone in the U.S. could have health insurance.
As this was introduced during recent Obama administration, it does not change the U.S. much even if Trump tries to abolish it.
On the domestic economy, Trump administration will cut corporation tax rate from the current 35% to 15%. He also says that his government will spend $1 trillion on infrastructure in the next 10 years.
These 2 policies might increase fiscal deficit of U.S, dramatically. The debt of U.S is increasing every year. And the US Congress has intense discussion on the “debt ceiling” problem once in every few years. As the deadline of current debt-ceiling is in March 2017, Democrats and Republicans will have debate on this issue again.
The difficult task for him, even though no detailed policy so far, is how to correct strong USD. He often said that he did not like USD being too strong. But despite his goal, USD is soaring after he won the election in November. He will certainly introduce policies to stop USD becoming too strong.
No matter what his policies are, Trump will become the next US President on January 20. It will certainly affect the US and global economies tremendously.
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