What's next for global markets after US election, and other global trade news to read this month

Donald Trump’s 2024 presidential win has already influenced currency, stock, bond and commodity markets, as investors anticipate shifts in trade, regulatory and fiscal policies under the new administration.

Following news of the victory, the dollar surged 1.65%, the euro fell 1.89% to its lowest since June and the pound dropped 1.16% since August. The Japanese yen also weakened as global markets adjusted to the election outcome, the BBC reports.

Meanwhile, economists polled by Reuters predict steady US inflation for a fourth consecutive month, rising 0.2% in October on the previous month.

Here, the news agency outlines the possible future impacts of a Republican presidency on global markets.

Currencies: The US dollar is expected to strengthen, fuelled by anticipated inflationary growth and high interest rates. Trump’s trade policies may drive down the euro and yuan, with the dollar rallying as much as 3%.

Stocks: Reduced regulation and corporate tax cuts are seen as favourable for US equities, especially in the banking, defence, and energy sectors. However, multinational firms could feel pressure from new tariffs and increased trade tensions, particularly those in clean energy and tech.

Bonds: Rising US debt and inflation fears have led to increased Treasury yields. A stronger dollar and elevated rates could pull capital from emerging markets, pressuring local currencies and economies.

Commodities: US oil and gas production is expected to increase with Trump’s push to expand drilling and lift environmental regulations, while tariff tensions may affect global commodity trade, especially in energy and agriculture.

Emerging markets and sustainable investing: Emerging markets face uncertainty from rising US yields and potential tariffs on exports to the US. Meanwhile, clean energy sectors could lose momentum as Trump focuses on fossil fuel expansion and possibly rescinds green subsidies.

The re-election of President Trump could introduce significant challenges for Latin America. Trump has proposed a 25% tariff on Mexican imports as part of efforts to curb illegal migration, which could strain Mexico’s economy and depress the peso, now at its lowest in two years.

Another important aspect to consider is the potential influence of the new administration on current trade agreements and the possibility of establishing new ones between the US and its international partners. In particular, the US-Mexico-Canada Agreement (USMCA) is scheduled for review in 2026.

Moreover, China’s growing presence in Latin America, especially in resource-rich countries like Peru, signals a shift in regional trade dynamics that could pose challenges for the US under the coming Trump administration.

In recent years, China has rapidly expanded its investments in the region, making efforts to counter China’s influence more difficult. In Chancay, Peru, for instance, China has funded a new mega port that can facilitate shorter trade routes to Asia and drive regional connectivity projects.

While the US remains an important partner, many South American countries find China’s direct economic commitments difficult to overlook, given its demand for key exports like copper and soybeans. This shift highlights the urgency for the US to prioritize regional economic policy.

China's exports surged 12.7% in October, outpacing forecasts as factories raced to ship goods to the US and Europe ahead of possible tariffs in the event of Donald Trump’s election victory. Imports fell 2.3%, underscoring weak domestic demand, while the trade surplus rose to $95.27 billion. “We expect front-loading in Q4 before pressure ramps up in 2025,” an economist at the Economist Intelligence Unit told Reuters, linking the surge to Trump’s tariff threats.

The World Trade Organization (WTO) has raised its 2024 global trade growth forecast to 2.7%, up from 2.6%, and predicts a further rise to 3% in 2025 if Middle East conflicts remain contained. Trade rebounded this year following a 2023 slowdown due to high inflation and interest rates, a new WTO report shows.

Italy's central bank governor has warned against worsening protectionism after Donald Trump's election, which raised fears of high tariffs on Chinese and European imports, threatening the eurozone's weak growth outlook.

This comes as one of Britain’s top trade experts, Marco Forgione, warned that no one would win a trade war with the US, reports the Independent. He cautioned that escalating tariffs under Donald Trump's presidency would create a "challenging market" for the UK, with British firms growing increasingly concerned.

The US presidential election is also expected to impact countries like Malaysia and Viet Nam, which have large trade deficits with the US, according to Channel News Asia. A more aggressive "America First" policy, led by a like-minded administration, will focus on prioritizing US interests in trade, analysts predict.

The UK has postponed its Single Trade Window initiative, aimed at streamlining post-Brexit trade processes, until at least 2026 due to cost concerns, The Guardian reports. The digital platform was intended to simplify import and export documentation, but faced significant challenges and budget constraints, prompting the delay.

Dubai Customs and DP World have signed a Memorandum of Understanding to enhance digital trade and logistics, supporting Dubai’s goal of becoming one of the world’s top three economic cities and strengthen its position as a global trade hub, reports digwatch.

The International Chamber of Commerce has launched the third wave of its Principles for Sustainable Trade, incorporating input from over 30 banks and corporates. The updated principles offer greater flexibility and actionable guidance, with a focus on aligning trade finance with environmental and socioeconomic sustainability goals.

Trade policy is evolving beyond just promoting the flow of goods and services, with governments increasingly using trade agreements to advance non-trade objectives like human rights and environmental protection. A new white paper from the World Economic Forum’s Global Future Council on Trade offers guidance for businesses to navigate these complexities while helping governments maintain open and collaborative trade.

Global income disparities between nation-state economies are narrowing, according to the World Trade Organization's 2024 World Trade Report. Exploring the complex relationship between trade and inclusiveness across and within economies - here are five of the report's findings.

How can leaders restore and redesign trade and economic globalization? This will be one of the key questions in 2025, as governments begin new terms and face pressing economic, social, security, and environmental challenges. The year ahead will test leaders in navigating a turbulent geopolitical landscape and the disintegration of the post-war international order, explains Samir Saran, President, Observer Research Foundation.