How Might Trump's Presidency Affect the Rest of the World?

By Bulut Leba Manisali

Edited by Dalya Birsel

Donald Trump has recently been victorious in the United States’ Presidential elections. This is not only a topic of discussion for the USA, but it might impact the rest of the world, considering the power of the US foreign policy. So what does this mean for the Netherlands?

Firstly, the Netherlands will be impacted by the  import tariffs that Trump plans to implement to boost domestic production within the United States. Economists reporting for Rabobank predict that inflation will rise from  2.8 to 3.0 percent and in the long term will cost the Dutch economy an additional 5 to 10 billion Euros. America is the Netherland's 4th biggest trade partner, having traded 24 billion Euros worth of goods in 2023, meaning that the Netherlands is vulnerable to this change made by President Trump. During his campaign, Trump stated that he intends to impose higher import tariffs upwards of  10% on foreign goods, with tariffs reaching 60% on goods from China. According to Rabobank, an optimistic scenario from Trump is that he will increase import tariffs by 5% for all countries, to which the EU is expected to respond with a 1.5% raise on tariffs of US imports. And the worst case scenario would be that Trump increases import tariffs by 10%, to which the EU is expected to respond with a 3% increase. Rabobank analysts remark that “If Trump wins the presidential election, it would be wise from a Dutch (and EU) perspective to prefer the negotiating table over a trade war,”  and to “strike back smartly if necessary, so that the impact on the EU remains limited.” 

While the European Central Bank (ECB) will likely not take action until Trump’s trade policies become clearer, they may consider making interest rate cuts to support the Eurozone economy until then, which may come into effect as early as December. Bond markets have already been volatile regarding the election, US bond yields have spiked while European bonds have remained stable. Still, investors are expected to turn towards safer bonds, such as Germany’s Bunds in order to avoid being penalized by Trump’s aggressive trade policies.

Overall, Trump’s presidency and economic policies are expected to have notable impacts on Dutch and European economies, although this currently remains uncertain, and will be clarified as his presidency progresses.

Works Cited and Consulted

“Trump's Possible Trade Policies Raise Concerns for EU and Dutch Economies.” NL Times, 6 November 2024, https://nltimes.nl/2024/11/06/trumps-possible-trade-policies-raise-concerns-eu-dutch-economies. Accessed 28 November 2024.

“Trump Tariffs Could Cost UK £22bn of exports.” BBC, 8 November 2024, https://www.bbc.com/news/articles/cz9x32eeegko. Accessed 28 November 2024.

“A Trump Win Would Cause Dutch Inflation Rate to Jump to 3.8 Percent, Analysts Say.” NL Times, 25 October 2024, https://nltimes.nl/2024/10/25/trump-win-cause-dutch-inflation-rate-jump-38-percent-analysts-say. Accessed 28 November 2024.

“What Trump's Win Means for Ukraine, Middle East and China.” BBC, 6 November 2024, https://www.bbc.com/news/articles/c2dl0e4l7lzo. Accessed 28 November 2024.