Guy Stephens, managing director at UK headquartered Rowan Dartington Signature, comments on the implications of a Trump victory
The process by which Western democracies choose their leaders really is a random walk of chance, circumstance, opportunity and in the case of the US, funding. Take our own Theresa May and how she became Prime Minister. Arguably, if David Cameron hadn’t been so worried about losing votes to UKIP ahead of the 2015 election, he would never have taken a unilateral anti-European stance in Brussels. It was then bizarre that he should campaign to Remain in Europe and perhaps that is why so many failed to support him. No-one was quite sure what he stood for, and he therefore had a conviction problem.
Not so in the US. The media show that is the US election process leaves most observers in the UK somewhat aghast that the two choices can boil down to such a rock and a hard place. However, the electorate are very clear on what they are voting for. The two candidates couldn’t be more polarised and perhaps this is a sign of the future political environment. There is a global rejection of moderate and tolerant politics in favour of more nationalistic and hard-line opinion which is favouring Donald Trump. There is scepticism of Big Government and Hillary Clinton represents everything that is Washington and many are rejecting this and going for the alternative, even though the flaws in that are so obvious.
In the UK, the radical left is dominating the UK Labour party whilst the radical right has promoted Brexit and won. We now have an incumbent moderate party, tasked with implementing a radical Brexit policy which they didn’t support. The mood with the electorate is for change. We have had eight years of austerity, quantitative easing, low interest rates, stagnant economies and increased terrorism. This is a global phenomenon fanned by weak economic growth.
At the time of writing, the US polls are showing Hillary Clinton to be well ahead whilst Trump continues to offend many with his brash, partisan views which are becoming ever more incredulous as his desperation rises. Whilst some may select Hillary based on statesmanship and credibility, another Democrat in The White House following through with Obama’s lame duck policies may be unpalatable for those who want change. If we were to draw analogy from the Brexit vote, then we should ignore the polls, recognise the appetite for change and prepare for a Trump Presidency.
But what would this mean for markets and how scared should we be? Republicans appear more horrified than Democrats at the prospect of Donald Trump in The Whitehouse which means that Congress could serve to neuter him at every radical step by exercising their veto. This could mean that whoever ends up in power, the outcome could be very similar. Power in all but name, where little on the foreign policy front changes outside of a moderate approach. Congress still has little appetite for confrontation following Afghanistan and Iraq and the likes of President Putin know it. Reassuringly for world peace, Trump does not appear to be hell-bent on taking on anybody and has appeared to extend a hand of reconciliation to Russia, but this could all be posturing. The media are very quick to blame Obama for allowing the US to slip into global irrelevance and relative obscurity. However the Chilcott Report has reminded us of the cost of global military ambitions. There is little appetite for any more avoidable conflict and so long as a possible Trump administration remains marginalised on this front, we have little to fear.
Guy Stephens, managing director at Rowan Dartington Signature