THE TRUMP CARD

On 8 November 2016, citizens of the United States showed up in full force to vote in the new president. World, say hello to President Trump. It’s as big a surprise to us as well. Some of Malaysia’s industry leaders and thinkers share what the next four years might bring with the world’s most polarising politician.

Note: Opinions have been edited for brevity and clarity.

Dato’ Robert Teo
Managing Partner, RSM Malaysia

With Donald Trump, there will be an initial period of uncertainty and anxiety as to what he will do as President. Among the lower-income group, there is the expectation of change and hope of better things to come. However, among the higher-income group, it’s the opposite, where the mood will be one of extreme uncertainty. Trump’s failure to come up with an honest, consistent, coherent set of policies is apparent. Due to his dangerous rhetoric, the outlook on race relations will not be good. It will be a learning curve for President Trump in his first years in office. He will introduce many changes to reflect his beliefs; some will be good, while others will be fundamentally flawed! Overall, the US will go through a phase of great transformation in its domestic and foreign policies. There will be extreme volatility in the currency market.

The remaining years will gradually be a period of stable growth and adjustments as the effects of his policies begin to bite. Hopefully, the rule of law will prevail and common sense leadership will result in a more stable period during that time. The US economy will evolve and reinvent itself. If President Trump reduces the tax drastically as he promised, the US could turn out to be the next tax haven of the world and result in US companies channelling all their foreign operations back to home.

Amarjit Chhina
Chief Corporate Officer, Malaysian Resources Corporation Bhd (MRCB)

I suspect the new US President is going to have a really tough time. When President Barack Obama entered the White House, the US economy was rock bottom and the banking system was teetering on the brink after the sub-prime crisis. Only some big government bailouts and a huge injection of liquidity into Wall Street prevented a catastrophe on Main Street. Since then, record-breaking low interest rates and three QE programmes, which led to trillions of dollars of assets being bought from the banks, have helped to restore enough confidence in the US economy to push stock markets to multi-year highs, and create almost full employment levels. Main Street has also benefited from low oil prices – so Obama’s high approval ratings shouldn’t be a surprise!

Things will be very different for the new President. Legacy problems remain unresolved (terrorism, gun-related crime, institutional racism, low savings rates and high debt) and are virtually impossible to solve politically. Compounding these problems for the new President will be rising interest rates, higher oil prices over time and a potentially weaker stock market, all of which will test the new President’s popularity in what has become a very Disunited States of America.

Lim Suet Ling
Chief Executive Officer, UOB Asset Management (Malaysia)

With Trump’s win, the highest risk is divergence from mainstream political status quo. He has declared China a currency manipulator and that the Renminbi is undervalued by 15 to 40 per cent. This may force China to revalue its currency and the US dollar against the Malaysian Ringgit could drift in a similar direction. This is due to the positive relationship between the Ringgit and Reminbi as a regional anchor currency. To counter the impact of stronger domestic currencies, it is highly likely for Asian central banks, Bank Negara Malaysia included, to adopt an easy monetary policy to inject liquidity into domestic financial system.

It is also a known that Trump has delivered threats to remove the US from international trade and security agreements. The spillover risks through exports will pose downside risks to growth and interest rates. Malaysia’s export share to the US is over 10 per cent of total exports, with bulk in machinery and transport equipment (62 per cent of total exports to US).

Dato’ Sri Jeffrey Raymond
Managing Director, OEM Autoseats Malaysia Sdn Bhd

The issue of race has always been in the forefront for the democratically elected President of the United States. It is still a big part and, more importantly, played up in a bigger way than in any other nation that I’ve come across. Ever since the nomination process was held, many have doubted Donald Trump. Just like Ronald Reagan, I think Trump will do well for world peace as his foreign policy seems to be directed towards making friends with the US’ traditional enemies. Although both Donald Trump and Hillary Clinton have shown negative perception towards a more outward US, I think Trump’s presidency will be more extreme on global economics. In terms of the impact on the Malaysian economy, we will not know the long term impact just yet, except that the Trans Pacific Partnership Agreement (TPPA) might be under the risk of being scrapped. But, Malaysia is resilient and it will soldier on for the next four years.

Shahid Shayaa
Managing Director, Berkshire Media Sdn Bhd

Donald Trump’s unconventional approaches to economic and immigration reforms will potentially reignite the United States of America back to its glory days at the expense of the global growth of other countries. As a person who has built a successful empire in real estate, his sharp business acumen and no-nonsense approach may ruffle some feathers, but his burning passion to make ‘America Great Again’ will resonate well with the masses in America. Whilst Trump’s aggressive call-to-action is seen as transforming the US economy, the execution of the plans and some reforms will continue to be challenging as Trump navigates his ideas through complex stakeholder engagement in the American politics.

I hope that President Trump will work on fixing domestic challenges, such as healthcare, employment rates, immigration issues and many more. Hopefully, he will be looking at policies that can spur the country GDP growth from an average of one per cent to the consistent four per cent as witnessed during 2013-14 period. The positive spillover effect through stimulus package, along with new policies, can bring benefits to other countries as long as consumers in America are willing to spend. The success of any transformation is in the execution.

Bob Chua
Director, Dematic Inc

Trump will resonate well with working class Americans who have successfully succumbed to his strategy on instilling fear of job security and border security, and economic issues. He will do less well on the international stage with his aggressive and somewhat undiplomatic nature, and will pose a lot of uncertainty and angst in geo-political and international relations. He will face immediate issues with his Mexican wall, ISIS, North Korea, Brexit, Russian sanctions and numerous other global issues which he’s vowed to tackle. Assembling a solid team of advisors around him while getting used to the diplomatic and strategic nature of the worlds superpower may overwhelm him. In my view, he will very quickly trip up on himself and cause reverberations throughout the world.

In Asia, there will definitely be some jitters, especially at a time when the TPPA (Trans Pacific Trade Partnership) is being pushed through from an economics point of view. From a security point of view, we are already seeing some political manoeuvring in the ASEAN region, with new strongmen such as Philippine President Rodrigo Duterte shying away from a US relationship, while forging closer relationships with China. Malaysia will be somewhat stuck in the middle as ASEAN Chair and a country which is fiercely attempting to protect our sovereignty by way of our coastal borders while China flexes its regional muscle.

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