In just a matter of days, Donald Trump will be sworn in as the 45th president of the US.
Entrepreneur and chairman of private equity firm Patriarch Eric Schiffer told Verdict what we can expect from a Trump presidency.
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Economic optimism won’t last
Trump will experience a honeymoon period at first. His promises to cut corporate taxes, invest in infrastructure and create 25m jobs have largely been met with approval from the American public.
However, “no one has thought through the second half of the Trump presidency,” Schiffer insists.
“What happens when the interest rates go up and the dollar continues to be so strong? What will the implications be then? Is the Fed going to have to print money like crazy to lower the dollar?”
Strong dollar spells danger for the US market
The dollar hit a 14-year high last month, but the surge won’t be beneficial for long-term US growth.
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By GlobalData“In time, a strong dollar will become Trump’s biggest problem,” Schiffer told Verdict.
A strong dollar means US goods and services are less competitive globally. US reliance on imports will increase, widening the trade deficit.
“There will be a slowdown in sales overseas. That will be a challenge for global organizations who are beginning to hedge,” he added.
Since the US presidential election, the dollar has jumped 6 percent against the euro and 12 percent against the yen, Bloomberg reported last week.
The big lie
Trump has threatened to take a hard line on China, the world’s second biggest economy, imposing a 45 percent import tariff on all Chinese goods.
“It is a gigantic bluff,” according to Schiffer.
The president-elect won’t actually implement this policy in office, because it would be detrimental for the US economy: “If it [a 45 percent import tariff] went ahead, Apple would no longer be able to sell in China, Facebook wouldn’t operate there, General Electric would no longer transact, and every McDonald’s would shut down.”
Finally…get ready for more late night tweets
It is no secret that Trump loves to tweet, especially in the early hours of the morning. On Monday, he used the platform to attack actress Meryl Streep for her comments about him at the Golden Globes. Trump denied that he ever mocked a disabled reporter.
Meryl Streep, one of the most over-rated actresses in Hollywood, doesn’t know me but attacked last night at the Golden Globes. She is a…..
— Donald J. Trump (@realDonaldTrump) 9 January 2017
Hillary flunky who lost big. For the 100th time, I never “mocked” a disabled reporter (would never do that) but simply showed him…….
— Donald J. Trump (@realDonaldTrump) 9 January 2017
Trump will be tweeting even more once he’s in the White House.
“He uses Twitter as a weapon,” said Schiffer. “While the general public might not understand a speech on a complex global trade issue, they certainly understand what goes on in 140 characters.”
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