Trump Impact on Trade:

  • NAFTA
    • After declaring North American Free Trade Agreement (NAFTA) as a ‘disaster’, Trump suggested he would renegotiate the agreement and institute tariffs on imports to discourage outsourcing of manufacturing.
    • Trump’s stand on revising NAFTA may not lead to excessively high tariffs on Mexican imports, but it could modernize the trade deal, offering better protection for American IP and settling ongoing disputes with Canada.
    • It would also present an opportunity to re-examine the agreement’s record and the negative economic impacts that would be caused by imposing tariffs on goods imported from Mexico. President Trump plans to get tough on Mexico and China from the starting of his administration.
  • China
    • As China is one of the world’s largest trading nations, the impact on China will be significant. Being labelled as a currency manipulator, Trump also calls for WTO involvement and countervailing measures against China.
    • Trump has repeatedly cited a 45% tariff on Chinese goods if China continued unauthorised operations in regards to trade. If Trump increases tariffs on Chinese imports, China would almost certainly retaliate; most vulnerable would be US automakers, airplane manufacturers, agriculture, and tech giants.
  • Immigration Policies
    • Trump’s infrastructure plan and immigration policies leading to trade isolationism could be one of the catalysts giving rise to inflation while dampening economic growth. This could be a threatening factor that would directly harm the Americans from keeping up with the rising consumer costs. Also, with the steep tariffs against Chinese and Mexican imports will likely arise a full trade war, resulting in more job losses in America than could be created.

Trump Impact on Healthcare:

  • Obamacare
    • By 2018, the number of people uninsured under the ACA, nicknamed as Obamacare, is estimated to be 24.9 million. With the annulment of ACA, highly supported by the President, this number is expected to increase by 19.7 million, making a total of 44.6 million.
    • Also, with the repealing of ACA, short-term uncertainty would create, making an approximate of 3 million people jobless.
  • HSA Program
    • Trump’s Proposed HSA program will provide a tax-free and highly flexible opportunity for future medical expenses.
    • On the other hand, the need for consumer guidance will increase as consumers require to stay highly informed.
    • Also, healthcare policies need to be revised, with primary focus directed to consumer counselling and guidance.
    • On Trump’s website, he has promised that he would work with Congress to “completely repeal Obamacare”.
    • So the question remains: What will they keep and what will they change?
  • Health Insurance
    • So far, health insurance in the US was regulated by the ACA, with minimum standards to avoid variations in underwriting, guarantees and denying coverage.
    • Owing to these regulations, health insurance companies who plan to sell their insurance plans in multiple states have to abide by the state regulations.
    • Donald Trump believes that with such a competitive environment, the cost of insurance will go down with increased customer satisfaction and the deficit for the federal government would inflate up to $33.7 million.

Trump Impact on Immigration:

  • Mexico
    • Between Trump’s immigration and trade policies, Mexico’s economy stands to lose significantly. The Mexican peso has already fallen 13% since Trump’s election. While it is doubtful Mexico will actually fund a border wall, the impact of stricter border control policies will exacerbate impacts related to trade.
  • Wages
    • The costs of wages will be rising due to the tougher immigration policies, as businesses look to fill both low-skill and high-skill positions. In the long run, the US economy will be facing labor shortages until the immigration policies are set.

    Cost Inflation

    • Consumer costs will grow as a result of higher wages resulting to inflation. Consumers will face higher retail prices if Trump implements his immigration plans. With 17% of unauthorized immigrants working in agriculture, food costs will be some of the first to rise.

President Donald Trump’s proposed policies will have significant implications for a range of industries and, indeed, the entire global economy. While many of his proposed policies on the environment and health may take time to implement, infrastructure and defense spending will give a short-term boost to the US economy.

If distributed widely, thus supporting both public and private projects, increased expenditures will create opportunities for smart and secure technology upgrades in both infrastructure and defense, paving the way for the next generation of travel, transport, broadband and utility delivery.

However, there is a lack of clarity regarding the ways in which spending, coupled with tax cuts, will impact mid-term economic growth, especially if Trump’s proposed trade reforms lead to economic contraction.


Sudeshna Nepal is a researcher with Frost & Sullivan. She can be reached at sudeshna.nepal@frost.com


Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at sapan.agarwal@frost.com | +603 6204 5830