Donald Trump will be president of the United States for the second time, a development that will dramatically alter the course of American society and have many implications for the world order. 

The fact that the Senate has shifted to the Republicans will enable Trump, notably in assembling his cabinet and in shaping new legislation. In policy terms, an important difference between the next and the previous Trump government will be an ideological coherence and more unified organisations. In addition, the Trump victory will likely trigger a shift in power within the Democratic Party.

Amidst a very strong turnout, America looks divided, and the campaign has been rancorous. Trump’s election will have implications for healthcare, women’s health, immigration and law, in most cases not for the better.

Geopolitics 

In terms of foreign policy, the world’s view of America will change compared to the sense people have had of it over the past fifty years. The reshaping of the Middle East, to Iran’s detriment, will accelerate. It is not unlikely that Trump will push for a deal of sorts between Ukraine and Russia, though Ukraine and Europe may well contest the parameters of this.

Europe will feel more isolated diplomatically and will need to become more independent. A power shift from large countries like Germany to eastern states like Poland, as well as Italy, will occur, and Viktor Orban will continue to irritate colleagues. For the UK’s Starmer-led government, the notion of the ‘special relationship’ may well be over.

Economy

Economically, there is a perception that Trump is ‘good for business’ in the sense that regulation will be pared back and taxes could fall. Trade policy is likely to be much more aggressive, given some of the policies crafted by members of the Trump entourage, and few allies (i.e. Japan, South Korea) will be spared. Europe will be pivotal here in terms of how it plays the US-China trade relationship.

Markets

Trump may find that the one force reining him in is the bond market. In the context of a very high deficit and near-record levels of government debt, the room for fiscal manoeuvre is limited, though he is not known to favour tax hikes. In that respect, bond and dollar volatility may be the financial markers of the second Trump presidency, and this could well be exacerbated if he changes the make-up of the Federal Reserve’s monetary policy committee.

Finally, in terms of private assets, the Trump victory should remove policy uncertainty and may well catalyse a rise in deal activity in private equity and venture. The operating environment for private equity and infrastructure should improve, with one of the only constraints being the rates outlook under Trump.