Trump 2.0: East Asia Looks Ahead Tentatively
Figure 1 Japanese public reacting to election results
An Uncertain Future
Trump makes an unprecedented return to the White House, surpassing his political opponent Harris by over 50 electoral college votes. The buildup to the vote was largely speculated about by Americans and non-Americans alike, keeping the world awake to stay on track with the state wins, particularly in forecasting outcomes of the seven crucial swing states. Although a ‘national election’ in theory, the differences in leadership and policy between the Republican and Democratic parties are what make election day so prominent and decisive.
What could have been
Consequently, the Yen could see itself strengthening from its recently historically low levels.
Short-term solution, long-term risk
Conversely, economists predict that with Trump now in charge, his focus on the US economy could lead to a short-term boost in the Tokyo stock market but simultaneously, a possible deepening of the yield gap between Japan and the US. Japan has been consistent with its export-driven economy and a loosening of business regulations by Trump would support this. However, the question of tariffs on trading partners could threaten Japanese shares, leading to an eventual pullback and thus reduced investment in the Japanese economy in the long term. Dedicating interests to the betterment of America could cause high economic growth and inflation, which would negatively impact foreign nations and their ability to purchase American goods.
Diplomacy between ‘old friends’
Following the chaotic aftermath of the national Japanese election that took place several weeks back, it stands chief that Japan maintains some level of international stability to compensate for the domestic concerns surrounding the notion of having a three-party coalition government.
A snippet into China
As for any messages of congratulations towards Trump, ambiguity exists in Mao’s response to this question, perhaps hinting at Trump’s promise of imposing 60% tariffs on Chinese goods.
Bibliography
https://japannews.yomiuri.co.jp/politics/politics-government/20241106-220987/