You are on page 1of 24

Given Donald J.

Trumps vague and


inconsistent discourse both before and since
the election, it is still early to foresee the
implications his election as the 45th President
of the United States will have on either
domestic policy or global politics and policy.
Nonetheless, it is possible to deduct some
features of Trumps potential foreign policy.
President-elect
Trump
seems
to
be
committed to abandon multilateralism, which
has been the cornerstone of U.S. foreign
policy since the collapse of the Soviet bloc.
Even though the U.S. seemed to deviate from
this in security issues around the wars in Iraq
and Afghanistan, it was still committed to a
multilateral approach in the trade arena.
Trump seems to imagine a new world order
made of strong national states and regional
powers engaging with each other in strategic
and transactional interactions. According to
Trump, the U.S. will still trade with other
nations and intervene in international security
and military operations, but only where the
country can play a dominant role in trade and
issues touch domestic interests. On the basis
of this underlying rationale, we will take a
look at the potential implications of a new
foreign policy on global public affairs in the
areas of security, climate change, trade and
democracy.

SECURITY
Team America would not be the worlds
police, Donald Trump said during his
campaign, stating that the U.S. would be a net
loser from protecting its allies. He called on

allies to commit more military resources, if


they want continuous American support.
Nevertheless, given the fact that Trump sees
forces such as ISIS as a risk to the U.S., he
expressed willingness to sustain military
engagement in the fight against terrorism.
In the Middle East, Trump envisages a bigger
role for Turkey, disregarding the increasing
authoritarian
stand
of
Erdogans
administration. As he plans to decrease
dependence on the Gulfs oil, Trump doesnt
see any reason why the U.S. should have a
strong presence in the region. He has said to
retract the Iran nuclear deal, although the
complex network of stakeholders involved
might keep him from doing so.
In Asia, Trump plans to revise military
alliances with Korea and Japan. This comes at
a time when an assertive China is tipping the
balance of powers in South East Asia, reviving
longstanding territorial disputes with its
neighbours and North Korea is showing
aggressive displays of its nuclear power.
Trump has mentioned he preferred South East
Asian countries to use nuclear deterrence
over U.S. support to counterweight China and
North Korea.
Trump has said he plans to reform NATO to
ensure that all members share the cost.
European allies are worries about the
potential implications of a smaller U.S. role
within NATO, especially at a time at which
Russia has adopted an aggressive stand in
Eastern Europe, annexing Crimea and
sponsoring pro-Russian separatist forces in
Ukraine.

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

Given Trumps friendliness towards Russian


President Vladimir Putin, we might see him
reconsider sanctions against Russia and
alignment on the countries positions in the
Syrian civil war, where Russia supports the
regime of Bashar Al Assad.
It is unclear what exactly the president-elects
position is on the war on drugs. If he confirms
earlier comments that he sees the problem in
the countries that produce and commercialise
drugs, he could trigger a new wave of
tensions between the U.S. and some Latin
American countries such as Bolivia, Peru and
Colombia (coca-cocaine producers), and
Venezuela,
El
Salvador
and
Mexico
(intermediaries). Relations with Venezuela and
Bolivia are already tense after the countries
leftist-populist leaders expelled the respective
U.S. Ambassadors in 2008.
If Trump pursues the foreign policy outlined
above, global geopolitical risk and instability
could increase, particularly for companies
working in the energy, infrastructure and
financial/insurance sectors. In a highly
fragmented international order, public affairs
in multi-market environments will be even
more complex and thorough political risk
analyses will need to underpin any multimarket campaigns.
CLIMATE CHANGE AND ENERGY
Donald Trumps victory came just a few days
after the Paris Agreement entered into force.
During his campaign, Trump called man-made
climate change a hoax and said he would
cancel the Paris Agreement and other
international efforts to address the issue.
Trump believes the U.S. shouldn't spend
financial resources on climate change, but use
them to ensure the world has clean water,
eliminate diseases like malaria, increase food
production, or develop alternative energy
sources.
The U.S. pulling out of the Paris Agreement
could trigger a spiral of defections after
difficult negotiations to get China on board.
The consequences of a failure of this sort are

unpredictable and would reverse decades of


multilateral efforts to tackle global warming.
The consequences for public affairs would be
substantial: The commitment to tackle climate
change sits at the core of many companies
sustainability programmes and the green
energy and tech industries would be impacted
by a reversal in climate change policy,
particularly given the current oil price. The oil
and gas sectors as well as infrastructure would
be the benefactors of changes as countries.
The links between China and Africa/Latin
America might strengthen as a result of
environmental standards China invests
heavily in raw materials from these regions,
but as many countries have environmental
standards in accordance with the Paris
Agreement and the Kyoto Protocol in place,
Chinese investment hadnt reached its full
potential yet. The multilateral system in
charge of climate change policy (UNDP, IPCC,
etc.) might see its funding substantially
reduced. Non-governmental actors, including
business and activists will be vital to uphold
progress and avoid the consequences of
climate change.
TRADE
Donald
Trumps
proposals
would
fundamentally change international trade.
While the Republican Party has been
historically sceptic of climate change and less
committed to multilateralism in security
issues, when Bill Clinton signed NAFTA in
1993, one of the few bi-partisan policy
consensuses in Washington was the
commitment to expand free trade throughout
the world. Moreover, this policy mirrored the
post-soviet expansion of the European single
market. These two developments, together
with growing economies in South East Asia,
have been the main drivers of economic
globalisation. As Trump has benefitted from
the vote of the American white working class,
allegedly the losers of globalisation, it is not a
coincidence that his first priority is to attack
NAFTA, even though analysts say cancelling
the pact would hurt companies, including
American manufacturers, significantly.

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

Other pending international trade agreements


are also in jeopardy, including the
Transatlantic
Trade
and
Investment
Partnership (TTIP) between the U.S. and the
European Union, and the Trans-Pacific
Partnership (TPP) which would bring together
the U.S. and 11 Pacific Rim nations. These
agreements would have put the U.S. at the
centre of a new impulse for economic
globalisation. Thus, Trumps intentions to
move from multilateral to U.S.-dominated
bilateral trade agreements is very telling of the
anti-globalist stance of the president-elect.
The free trade agreements also had a security
angle. For example, TPP was a key element of
the Obama administration's strategy to build
economic and security relations with Asian
nations as a hedge to China's increasing clout
in the region. TTIP would have played a similar
role in strengthening NATO in the context of
an aggressive Russian stance in Eastern
Europe.

Free trade agreements, particularly those


between blocs are very important for
transnational companies who benefit from
stable regulation and low tariffs across
borders. If free trade agreements are the
highways of globalisation, transnational
companies are their vehicles. A world of free
trade is a world of interconnected highways. A
world of many bi-lateral agreements is a world
of narrow streets. Under these conditions
public affairs will be crucial to navigate very
diverse multi-market environments.
DEMOCRACY

of Muslims and Latinos.


Of course, it is likely that the strength of the
democratic institutions in Europe and the U.S.
will survive a populist wave. However, this
might not be the case in young democracies.
Trumps inward-looking approach might stop
any U.S. attempts to support democratic
movements abroad. This might reverse what
was called the third wave of democratisation
in the developing world.
While companies do not need a liberal
democracy as a base to work, changes in free
trade would make their engagement in public
affairs more difficult, if media is censored and
interests are not openly represented.
TO CLOSE
We know that Donald Trump is taking an antiglobalist stance on foreign policy, by reducing
the importance of political and economic
multilateralism. On the other hand, we know
that Trump is a populist leader. Populist
leaders are very flexible in their discourses and
they dont necessarily stick to their campaign
promises many commentators have
observed that it is difficult to know what
Trumps core belief system is based on his
election platform. Even if that would be the
case,
the
structural
forces
shaping
globalisation are not easy to reverse, not even
for the President of the U.S. Nonetheless,
globalisation is facing real challenges around
the world and public affairs engagement will
have to adapt to these changes.

Donald Trumps election could be interpreted


as a sign of the weakening of the institutions
of liberal democracy. Trump is a populist
choice and has shown disregard for many of
the key principles of liberal democracy. Trump
mirrors the rise of right-wing and left-wing
populists in Europe, Latin America and even
the Philippines. These leaders are perceived to
value less liberal principles such as the rule of
law, checks and balances and human rights.
This explains why Trump proposes measures
such as mass deportations or the surveillance

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

The election of Donald J. Trump as the 45th


President of the United States sent
shockwaves around the globe as many
countries were expecting a Democratic win.
Reactions vary between countries and regions,
but also within countries where populist
movements welcome Trumps election, while
moderately and liberally minded people in the
centreground disapprove.
North America: The U.S. is the single most
important trading partner for Canada, and
much of the initial reaction focused on the
stability of that relationship. Trade and energy
will be key topics in the near future Canada
has indicated it would be open to a
conversation about NAFTA and both Canadian
PM Justin Trudeau and Donald Trump support
the Keystone pipeline. Both the Trudeau and
provincial governments will focus on
minimising any negative economic impact,
staying focused on specific objectives and not
allowing domestic politics to bleed into either
nation.
Latin America: Reactions to Trumps victory
ranged from pessimistic to cautious across
Latin America. Mexico suffered a political and
economic shock after Trumps openly antiMexican
and
anti-migrant
rhetoric.
Commentators dont expect Trump to deliver
on his promise to build a wall along the
border, but fear a crackdown on remittances
which would have a significant economic
impact on Mexico.
Argentinas
and
Brazils
centre-right
governments were disappointed with the
result after cultivating close relationships with
the Obama administration. Given Trumps
stance on free trade agreements, they see slim
chances to increase trade and attract FDI.
Interestingly, although they oppose Trumps
xenophobic remarks, leftist populists such as
the Presidents of Ecuador and Bolivia
expressed hope that the new administration
will be more respectful of their internal affairs.
They feel endorsed in their negative views on
free trade and globalisation.
Colombias
President
Santos
reacted
cautiously as Trumps victory might derail
peace talks between the current government

and the FARC rebels. Opponents of the peace


agreement welcomed this they see the
agreement as too favourable to the FARC and
the leftist regimes that supported the peace
talks, Venezuela and Cuba.
The Cuban government fears that Trump
could reverse the progress made by Obama in
starting to normalise U.S.-Cuban relations.
Europe: European officials are scratching their
heads trying to understand what a Trump
presidency could mean for the EU. Observers
agree that the Transatlantic Trade and
Investment Partnership (TTIP) will now be
buried, and campaign threats of protectionist
measures could further harm future EU-U.S.
trade relations. Joint efforts to address energy
security and climate change may also be
compromised.
There is, however, hope that Trumps election
will serve as a second shock (after the Brexit
referendum), forcing EU leaders to recognise
the trend of rising levels of populism,
nationalism and xenophobia across many
European countries, which may well result in
populist surges in elections in 2017. France
fears seeing right-wing party National Front
and its leader Marine Le Pen win, while
Germanys AfD is hoping to enter the German
parliament. Meanwhile, Italys PM Mario Renzi
nervously awaits an upcoming constitutional
referendum in December.
Speaking of Germany, people expressed a
feeling of uneasiness as Trumps rhetoric has
been a bad reminder of a not too distant past.
This was reflected in Chancellor Merkels
response who offered Trump a close
partnership on the condition of respecting
human rights, the dignity of man and
democracy.

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

The United Kingdom has always considered


the U.S. as its closest ally, but Donald Trumps
isolationist vision will worry the British
Government not least his lack of
commitment to NATO.
There are also huge dangers to the Wests
collective security if Trump aligns too closely
to Russia and Vladimir Putin. Sharing borders
with Russia and watching its annexation of
Crimea in 2014, that is a worry that keeps the
Baltic states (Estonia, Lithuania and Latvia) up
at night.
Asia: The future of free trade and geo-political
instability are the most pressing matter of
concern in the region. A shift towards an
inward-looking foreign policy and away from
the Trans-Pacific Partnership (TPP) could
destabilise the region.
Although not a member of TPP, China worries
about potential U.S. trade-barriers, further
WTO disputes and the U.S. branding it a
currency manipulator. The public view in
Japan has been generally negative, but Prime
Minister Shinzo Abe has expressed willingness
to cooperate to maintain security and stability
of the Asia-Pacific region. Currently facing an
economic slowdown, South Korea is
particularly concerned about its economic ties
and support from the U.S. in its conflict with
North Korea. South East Asian Singapore,
Malaysia and Vietnam will be hit hard if Trump
indeed brings TPP to a halt.
A country with a large Muslim population,
public opinion in Indonesia has been tense,
responding to Trumps anti-Islam rhetoric. The
government has expressed concerns about a
potential decrease in U.S. trade and
investment in the country.
Unsurprisingly, Philippines populist leader
Rodrigo Duterte, who previously clashed with
the Obama administration over human rights
issues, has enthusiastically congratulated
Trump and expressed his willingness to
establish a relationship of mutual respect and
trust.

strategic alliances with allies like Saudi Arabia


and the UAE or impede American interests in
the Middle East. Though some notable Arab
figures in the business community in Dubai
have been openly critical of Trump, Arab
governments have adopted a wait and see
approach with respect to the president-elect.
The rhetoric used in the election campaign by
Trump is widely viewed by Arab governments
as tailored for the domestic consumption of
Americans, rather than directly linked to
foreign countries. As a result, numerous Arab
leaders (in the UAE, Saudi Arabia, Egypt,
Bahrain, Jordan, Lebanon and others) have
extended an open hand to work with Trump.
Politically, issues that are strategically
important to Arab allies of the U.S. include
Irans
re-entering
the
international
community, Americas lukewarm support of
Palestinians and backing of Israel, U.S.
hesitation to intervene in a more pronounced
manner in Syria, the ongoing conflict in
Yemen and the security implications of ISIS.
On the economic front, Trump is expected to
follow in the path of previous American
administrations strengthening commercial ties
with the Arab world that will help create jobs
and spur economic growth in the US.
Australia: The reaction in Australia has been
one of caution. Prime Minister Turnbull who
phoned Donald Trump to congratulate him
has already discussed the U.S. military
presence in the Asia Pacific with the next
President and implored him to rethink his
opposition to the Trans Pacific Partnership, of
which Australia is a member.
Australia is worried that a Trump
Administration may abandon the Asia-Pacific,
where it performs a vital function as a
counterweight to Chinas growing ambitions.
There are also fears of Trump-led trade war
with China, Australias biggest trading partner.

Middle East: Though his election campaign


dismayed many in the Arab world, Donald
Trump is unlikely to implement radical foreign
or economic policy shifts that would alter

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

As with the rest of the world, in Canada the


election of Donald J. Trump came as a shock.
From arm-chair pundits to those at the
highest levels of business and government, a
Democratic sweep seemed a foregone
conclusion.
The United States is the single most important
trading partner for Canada, and much of the
reaction following the initial shock of the
election of Mr. Trump himself and Republican
majorities in the House and Senate focused
on the stability of that relationship. Canadas
Prime Minister reached out to President-elect
Trump and, per media reports, the two had a
positive albeit brief conversation by phone.
Given the importance of the bilateral
relationship to the Canadian economy and the
overall quality of life of Canadians, building a
strong working relationship with the incoming
administration will be the top priority for the
Canadian government. Canadian governments
have also learned over many years the critical
role Congress plays and will be working hard
to build relationships with the Senate and
House.
Trumps campaign commitments on trade and
the economy are all being carefully examined.
Canadas Ambassador to the United States,
David MacNaughton, recently said in an
interview that Canada would be open to a
conversation around NAFTA. That kind of
openness to dealing with the incoming
administration, combined with the assiduous
avoidance by Prime Minister Trudeau of
commentary on the election, particularly
criticism of Donald Trump, is hoped to ease
the transition between administrations.
Indeed, the prevalent view among academics,
business leaders and government is that the
election of Donald Trump need not lead to a
break in relations. In some areas, there may in
fact be areas of benefit. The incoming Trump
Administration may be willing to re-engage
on issues of bi-lateral trade as opposed to
multi-lateral agreements favored by his soon
to be predecessor.

It is likely that the Keystone pipeline will again


become a significant bilateral issue and a
media barometer for the state of the
relationship between Trudeau and Trump.
Both leaders support the pipeline and the
anticipation is that it will be approved.
Donald Trumps election has already seen an
impact on the politics of the Conservative
Party of Canada and their upcoming
leadership race. One candidate in particular,
who has embraced his politics through her
campaign, celebrated his election on Tuesday
night. Trumps brand of populist nativism will
find both admirers and detractors, as with
most other nations around the world.
Many Canadians fondly associate the
memories of friendships between Bill Clinton
and Jean Chretien in the 90s as well as Ronald
Reagan and Brian Mulroney in the 1980s. The
relationship between Barack Obama and
Justin Trudeau was seen as fitting this mold.
The relationship between Donald Trump and
Justin Trudeau may more likely resemble the
relationship between Richard Nixon and Pierre
Trudeau (father of the current Prime Minister)
during the 1970s; more transactional and
while divergent on broad values & issues, not
necessarily hostile to one another.
The United States and Canada enjoy the
largest undefended border in the world and
one of the closest relationships, politically,
socially, and economically between nations in
human history. This friendship predates and
will extend past the Trump Presidency, while
the goal of the Trudeau government as well as
provincial governments will be to minimize
any negative economic impact, staying
focused on specific objectives and not
allowing domestic politics to bleed into either
nation.

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

Argentina woke up on Wednesday 9th with


the unexpected news of Donald J. Trumps
winning the presidential elections in the
United States. In light of the facts, most of the
suppositions and polls were proven wrong,
and so was the Argentinian governments
foreign policy strategy.
Since in office, Mauricio Macris administration
has worked to fulfil the campaign promise of
opening Argentina to the world, focusing
especially on Europe and the United States.
This strategy was carried out by publicly
approaching the Obama administration,
making its peak episode during the
Presidents visit to our country, where he was
warmly received. This trust show-off was not
only meant to position Argentina as a more
relevant global player, but was specifically
intended to be a key message for foreign
private investors to come to do business in
Argentina.
On a daily basis, instances of the common
agenda were driven by several Government
officers known for servicing different American
public and private actors, as well as
international institutions such as the United
Nations. Nevertheless, this direct line to the
U.S. always ran to Democratic party members,
and lacking in contact with Republican
representatives, even though elections were
around the corner. Indeed, as most of the
regions presidencies, Argentinas was in
favour of Hillary Clinton and expected her
victory that would have guaranteed the
continuity of U.S. policies towards Latin
America.

next years. By first reaction, Merval the


Argentine stock market was surprised and is
waiting to see what comes next. The day
following the elections, the market started
with an almost 5% drop, yet recovering
throughout the day to close at a 0.54% loss.
Meanwhile, as the Government was confident
that free trade negotiations were to be
continued under a Hillary Clintons mandate,
this possibility is now clearly under threat.
Commodity producers are quite concerned
about potential protectionist policies that
might reduce commercialization levels, even
though the U.S. retraction could generate or
extend business opportunities in other
markets.
In this context, the United States will remain a
key player in Argentine politics and economy,
but it is uncertain where the country will be
placed in this new international landscape.
Surely, some treaties will be renegotiated and
relationships rebuilt. Finance, exports and
direct foreign investment, among other
sectors, will depend on how Mauricio Macri
engages with Washington.
Even when no one can exactly tell or predict
what measures will be taken in the future, it is
clear that Argentinas Government needs to
redirect and strengthen ties with a new
administration that, based on Donald Trumps
campaign speeches, will have a different
position than its predecessors.

Besides the importance of political and


business relations, since December, Argentina
has been issuing public debt for over 40
billion dollars, out of which more than 50% is
held by U.S. institutions. Also, public deficit is
still around 5.5 points and being financed
through domestic and foreign borrowing. This
means that a feasible increase of rates by the
Federal Reserve - as expected from the Trump
administration - would force Alfonso Prat Gay
(Minister of Economy) to restructure the
countrys financial and economic plans for the

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

The Brazilian market reacted to the election of


Donald J. Trump with a valuation of 2.45% of
the exchange rate of Dollar/Real, with one
Dollar being sold by BRL 3.245 and with the
Brazilian Stock Exchange Bovespa operating
with a decrease higher than 3%.
The Brazilian president Michel Temer
considered the tone of Trumps first speech
moderate and a nod to union. Temer
declared in a radio interview that Trumps
election does not affect the relationship
between both countries: I am sure that
nothing will change in the relationship BrazilUSA once this relation, as with other
countries, is institutional, in other words, from
State to State.
Brazilian analysts opinions regarding the
Brazil-U.S. relationship are divided. Some are
more pessimistic, but most agree that the
Brazilian market will be minimally affected by
Trumps measures, as South America and
Brazil were not treated as priorities during his
campaign. However, the effects of his election
throughout the world, in addition to his
unpredictability and protectionism, may have
some impact on the Brazilian economy.
Gesner Oliveira, a Brazilian economist and
consultant, worries that uncertainty makes
investors concentrate their investments in
lower risk assets. That means a capital flight
from riskier markets, such as Brazil.

However, she expects a negative effect on


Central America, which has a large migratory
flow to the United States and is the target of
the anti-immigration policies Trump proposed
on the campaign trail.
Experts in Brazil-USA relations say that the
bond among the two countries depends in
great measure on the chemistry between its
leaders, regardless of their parties or
ideologies. On the Brazilian side, there
certainly is interest of forming a closer bond
with the United States. In an interview to BBC
Brazil in July, the Brazilian Ambassador in
Washington, Srgio Amaral, said that Temers
government would invest in the relation with
the five main global powers, the U.S., China,
Russia, France and the United Kingdom.
The Brazilian market presented a first
pessimistic reaction to Trumps election.
Future effects will largely depend on Trumps
next announcements and the tone of his
future speeches as president-elect and
president. The country represented a low
priority in Trumps campaign agenda and
experts understand that there will unlikely be
major changes in the bilateral agenda of both
countries.

Brazils former Ambassador to the United


States
(1999-2014),
Rubens
Barbosa,
concludes that relations are going well, there
is transit of people, but there is not any fact
that pushes it to the next level. What can
happen, if Trump actions what he said during
the electoral campaign, is that some sectors
that are not very competitive in the United
States, such as steel and ethanol, receive a
higher
protection,
damaging
Brazilian
exports, but he considers this possibility
unlikely.
Monica Herz, professor of the International
Relations Institute of PUC-Rio, foresees that
Trumps government will not worsen the
relations of the United States with Brazil.

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

Donald J. Trumps victory in the U.S.


presidential election came as a big surprise to
many since the vast majority of Mexican
political analysts and key opinion leaders
expected that Hillary Clinton would win the
election.
His victory has brought uncertainty in several
strategic areas for Mexico and has been the
main topic on public agenda in the last days.
TRADE
There is a strong interdependence in this key
area of economic activity between both
nations as the U.S. is Mexicos primary trading
partner and Mexico is the second largest
trading partner of the U.S.
Discussions in Mexico are centered on the
possibility of the United States pulling out of
NAFTA and the restriction of Mexican exports
through high taxation as Trump has stated
during his campaign. Mexico hoped that the
Trump administration wont get rid of a 20year-strong commercial relationship and
expects American multinational corporations
as well as small and medium-sized enterprises
that benefit from the agreement to raise their
voices. However, in case the U.S. actually pulls
out of NAFTA, Mexico will face a scenario for
which it is not prepared and will probably
have to open new trade markets to decrease
its dependency on the U.S.

The Mexican peso has experienced high


volatility in the last days, however the financial
market has started to stabilize.
FEDERAL AUTHORITIES
Federal authorities have assumed a calm tone
when addressing media on the repercussions
of Trumps election. President Enrique Pea
Nieto said he called Donald Trump to
congratulate him on his victory and would
welcome a meeting with him to address the
bilateral relationship and work on a joint
agenda covering security, prosperity and
cooperation. He said Trumps election as
president represented a challenge, but also an
opportunity.
President of the Mexican Federal Bank and the
Minister of Finance said that Mexico is
prepared to face this new economic scenario
and declared they do not expect significant
risks in the short term. They stated that the
behavior of the U.S. in economic matters is
uncertain at this point, and added that they
have prepared a set of public policies to be
put in place if needed.
Expert analysts consider it too soon to have
certainty regarding the impact of Trumps
election on Mexico. Many believe there will be
a difference between what Trump promised
during his campaign and what he will actually
be able to fulfil once in office.

ECONOMY
The possibility of an inhibition or blocking of
immigrants remittances is of great concern
since it is a vital source of income for Mexico.
The income from remittances is greater than
that from oil exports, foreign investment and
tourism with $25 billion dollars in remittances
being reported last year.
Mexican authorities have assured the public
that the country will not pay for the border
wall that Trump repeatedly addressed during
his campaign, however, there is concern that
immigrants remittances will be used to
finance it.

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

Donald J. Trumps election could mean a new


sense of hope in Brussels
The astonishing outcome of the US
presidential election was met in Brussels with
a certain feeling of dj vu. It also inspired a
profound sense of hope for many European
leaders. Not President Obamas brand of
hope, mind you, but a more concerned kind of
hope. In congratulating Trump on his election,
European Council President Donald Tusk and
Commission President Jean-Claude Juncker
expressed their shared hope that America will
continue to invest in its partnerships with
friends and allies, to help make our citizens
and the people of the world more secure and
more prosperous.
In the same vein,
European Parliament President Martin Schulz
declared that the world hopes for an
outward-looking
presidency
aiming
at
shaping international relations and upholding
the values of freedom and democracy.
Perhaps nobody expressed it better than
BusinessEuropes President, Ms. Marcegaglia,
who stressed that because the 45th President
of the US is an entrepreneur, we hope that his
decisions will be driven by political and
economic reason. Such are the great
expectations that Trumps victory are
generating in Brussels.

hope within Brussels circles that Trump will


come to terms with reality at some point, and
reconsider some of his campaign promises,
which were less popular and thought to be
unrealistic.
There is also hope that Trumps election will
have the impact of a second electroshock
(after the Brexit vote), forcing EU leaders to
recognise the dangerously growing distrust
towards EU institutions and towards the idea
of European integration itself. The rising levels
of populism, nationalism, and xenophobia that
we are seeing across most European countries
are all surfing a dangerous wave of economic
and social resentment, institutional distrust,
and plain fear.
EU leaders must seriously reconsider their
priorities and, above all, how they
communicate to, and engage with European
citizens to address their fears and worries.
Clearly, Brussels-based bureaucrats are not
the best spokespeople to explain to a
Portuguese taxi driver or bank cashier who
may have just lost their jobs how the Digital
Single Market will improve their lives. How
many wake up calls will European leaders
need before all hope of preventing the
disintegration of the EU is lost?

European officials are scratching their heads


to try to understand what a Trump presidency
could mean for the EU and, in particular, what
it means for the future of some major dossiers
currently on the table. Not much is known
about Trumps future policies in many areas,
and proposals expressed so far on a few
topics are not really encouraging. Most
observers seem to agree the Transatlantic
Trade and Investment Partnership is now dead
and buried, and campaign threats of
protectionist measures could further harm
future EU-U.S. trade relations. Joint efforts to
address energy security and climate change
may also be compromised. There is also the
fear that EU-U.S. relations may be
downgraded to a purely transactional
relationship, less motivated by common
values and objectives. Of course, there is high

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

The U.S. Presidential race has had a special


echo in France and received huge attention
from French media and political leaders ahead
of the next Presidential election in France next
April.
The victory of Donald Trump is perceived as a
surprise and a shock in France. The French
public opinion was clearly supportive of
Hillary Clinton. The idea that the American
people could vote for a woman was
considered as a great change of improvement
all over the world. In the French media,
everyone pointed out the fact that it would be
very difficult for Trump to win this election.
His image was highly damaged in the French
media.
Right after the victory of Donald Trump all
candidates to the French presidential election
have shared their analysis and their thoughts
of the impacts for the French campaign. For
several years, France has had to face a deep
crisis of trust between the general public and
the elites. During the last 20 years, no
government has ever managed to be reelected. A large majority of the French people
reject globalisation and ask for more
protection and stronger borders. The rise of
the National Front and its leader Marine Le
Pen is seen as a political consequence of this
lack of trust in French political leaders and
lack of confidence in their capabilities to fix
French economic challenges and social issues.
The fear of seeing the Front National win is
high and Marine Le Pen was the first person
to publicly congratulate Donald Trump in
France.

for months, Franois Fillon, former Prime


Minister of President Nicolas Sarkozy, won the
first round and will compete against Alain
Juppe (the polls and media favourite
candidate) in the second round. Former
president Nicolas Sarkozy has been voted out
of the race.
Regarding Trumps election its also important
to note that while COP22 is being held in
Morocco this week, the French Government is
worried about the potential future decisions
Donald Trump could make about the COP21
agreement follow-up, as this conference had
been considered a huge success for the
French government.
After Brexit, the election of Donald Trump is
seen as a continuum in western democracies,
the start of a new political cycle and the next
milestone could be the election of Marine Le
Pen. Since the election, the future of France
and the United States has been linked
together closer than ever.

On the one hand the socialist party is in a very


difficult position as the President Franois
Hollande has not yet decided if he will be
candidate or not. At the same time, Emmanuel
Macron, former Minister of Economy (who left
the Government a few months ago), decided
to announce his candidacy this week though
he does not have the support of any political
party. On the other hand, the first round of
the primary election of the right wing party
Les Rpublicains took place last weekend.
Contrary to what the polls have been saying

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

Germany has been shaken to the core by the


election of Donald J. Trump.
Germany has a very emotional relationship
with the United States. There are a lot of
shared moments in history that have shaped
both nations: America decided to help rebuild
Germany after World War 2, it supported and
protected Germany during the Cold War and
it embraced the German reunification in 1990,
thus ending the Cold War. Our close
transatlantic partnership is one of the very
foundations of Germany as a nation.

After Trumps election this foundation has


been shaken to the core and this is why:
During the last 25 years, since the fall of the
wall, Germans have lived through a period of
peace and prosperity. Economic and security
collaboration with the United States was a
corner stone of the politics of that era.
Trumps ideas on renegotiating transatlantic
trade and reshaping collaborative security cooperations are at very least unpredictable.
And so Germans are alarmed by what looks
like a much more uncertain and changed
future partnership with the incoming
administration.

reactions. Chancellor Merkel congratulated


Trump on his election and offered him a close
partnership, explicitly calling out that this is
based on the condition of respecting human
rights, the dignity of man and democracy.
Merkel even posted that statement on her
official Facebook account.
Ursula von der Leyen, German Defence
Minister and a close Merkel ally, came out
early in the morning and said that she was
very shocked. This is a very unusual
statement from a German cabinet member
towards an election in an ally country and a
clear indication that directly after this USelection, Germany is indeed shaken to the
core.

Germany is a consensus-orientated nation


and democracy. Donald Trumps aggressive
and intentionally polarizing campaign is on
the opposite side of we what tend to strive
for. From a German perspective, his
unconventional
behaviour
would
be
unthinkable for a public figure especially in
politics and creates a continuously
deepening feeling of estrangement.
When it comes to Trump, Germans get a bad
case of been there, done that. From our
point of view, his plans of building a wall and
his threats of imprisoning opponents are a
bad reminder of a not too distant past and
they do not resonate well with a nation trying
to learn from this past in order to shape a
better future.
This general
reflected in

feeling of uneasiness was


the German governments

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

The Italian government is more exposed than


many other European partners to a negative
backlash after Donald J. Trumps victory.
Prime Minister Matteo Renzi has developed a
strong relationship with Barack Obama,
especially after the glittering last Official
White House dinner of his presidency in
October. Also, Matteo Renzi, together with his
entire Democrat party, has been a vocal
supporter of Hillary Clinton, while other
European governments have kept a more
prudent position. The Renzi governments
embarassment may be an obstacle in building
a functioning personal relationship with the
new American President, though Italy is
regarded as one of the staunchest European
allies of the U.S.
Renzi further fears the wave of electoral
revolts in the West might break on his own
beach: polls for an upcoming Constitutional
referendum on December 4th are shaky .A
loss in the referendum would likely undermine
his government. At the same time, Renzis
rivals, and especially the anti-establishment
Movimento 5 Stelle, are celebrating covertly
or overtly Trumps victory, and are calling for
a similar anti-establishment revolt in Italy.
Simultaneously, Italy has an uncomfortable
position within Europe. Renzi has called for
the difficult reform of the European economic
and political governance, which still remains
unlikely despite positive opinions of some
influencers (e.g. Financial Times). But young
Renzi may dust off his original position as the
first supporter of political reforms, to buttress
his image as the original anti-establishment
demolition man.

great boost for many Italian manufacturing


companies (small and medium size, especially)
which are currently positioned in the middle
of a difficult premium market to avoid
competition with China.
The TTIP is now almost certainly doomed, with
negative consequences for the positioning of
Italian companies in many traditional sectors
(clothes, shoes, furniture, and many outlets
with a strong design and a made in Italy
connotation). On the other hand, a Trump
presidency could lead to an ease on Western
sanctions against Russia; and would be a
promising development for other Italian
sectors of the economy (agriculture, food in
general), which are currently badly hit by the
sanctions against Russia, impacting exports
(recent losses have been estimated at USD 4.3
billion).
Another positive outcome for the economy
could come from a possibile boom in defence
spending: a Trump presidency will press its
European counterparts to share the burden
of the NATO defense budget (at least 2 per
cent of GDP). Italy would be well positioned
for such a development, having one of the
worlds largest companies in the defence and
aerospace sector, Leonardo Finmeccanica
(under state control), and in general a
structured industry and production chain in
the defence and aerospace sector, with
European industrial ties. Similarly, Italys large
construction
companies
with
wide
international experience could seek to join
Trumps announced priorities to improve
infrastructure projects.

Any change in U.S. immigration policy will


also be closely watched in Italy, which has to
cope with a large influx of illegal immigrants
itself.
Italy has been one of the few European
countries with a solid consensus on the
Transatlantic
Trade
and
Investment
Partnership. A free trade area between Europe
and the United States would have been a

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

Donald J. Trumps victory was met with


caution and a certain degree of surprise in
Spain.
Initial political reactions were conflicting:
Prime Minister Mariano Rajoy congratulated
Trump via telegram and on Twitter,
emphasizing his desire to strengthen the ties
between the two countries. Other political
parties, however, such as the PSOE and
Podemos, were quick to dub the election
outcome bad news, taking a highly critical
stance on the future President of the United
States of America. All major Spanish news
outlets, which have provided extensive
coverage of the elections, reported on the
Republican candidates triumph.
Dailies like the clearly pro-Democrat El Pas
responded with evident reservations and a
deeply pessimistic tone. This highly influential
publication referred to the result as dreadful
news for the worlds democrats and a source
of satisfaction and opportunity for the
enemies of democracy. According to El Pas,
the shock suffered by Democrat supporters
in the US is echoed in the European capitals,
which run the risk of being abandoned by
Washington at a highly complex time in the
regions history, as it faces a series of external
threats and a serious internal identify crisis.
The newspaper augurs economic instability
and political uncertainty ahead, especially if
Trump is quick to implement the protectionist
agenda he used to lure in voters.

international affairs are concerned, the world


of yesterday is now a thing of the past, in a
nod to the title of Austrian writer Stefan
Zweigs memoir. With Donald Trump as
President, all we know is that nothing will stay
the same. Europeans, like the rest of the
world, are now faced with a huge question
mark (and a major challenge) because there is
no reason to believe that transatlantic
relations, including NATO, will be as we know
them. As for the feeling of vertigo, Palacio
put it this way: Trump is President: a new
world is born.
From an economic perspective, the markets
took Donald Trumps victory in their stride,
and the reaction was moderate. The Ibex 35
closed slightly down, by 0.40%, on November
9th, substantially less than the 12.35% it
plummeted to after the Brexit referendum
results had been announced. Spains
sovereign credit spread (versus the German
bond) tightened by over 2 basis points to
107.7, lower than spreads in surrounding
countries such as Italy.

Spains former foreign minister Ana Palacio


was among the first political analysts to
comment on the result, summing up her
reaction in three words: bewilderment,
uncertainty and vertigo. Bewilderment, she
said, because of how monumentally wrong
the polls were, just as they were for Brexit and
the Colombia referendum. As Palacio sees it,
the results point to deep changes in society
and a painful truth: a widening schism
between the ruling classes and ordinary
citizens, a situation already revealed by the
conclusions of the latest Edelman Trust
Barometer. Uncertainty, she explained, will be
the new normal, because as far as

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

So, the US is to move from a Commander-inChief to an Entertainer-in-Chief.


I gave a rueful laugh when I heard this
epitaph used by the leader of the UK
Republicans Abroad during an interview on
Radio 4 in the early hours of Wednesday 9th
November as she celebrated Donald Trumps
victory. Originally, of course, it was coined by
Chris Christie, the Governor of New Jersey, to
mock Mr Trumps candidacy.
When the announcement came in the early
hours of Wednesday morning it was too late
for the published UK print media to react.
However, the news channels and radio waves
were broadly in agreement: this was an affront
to liberal democracy. They also speculated
that his desire to be an isolationist would be
damaging to our special relationship. And
whilst this was on-going the markets tumbled,
although they have steadied.
Prime Minister Theresa May had been openly
critical of some Trumps electioneering
statements and many feel her initial message
to his victory was lukewarm. However, with
the Article 50 trigger looming, which will take
us firmly on the road to Brexit, the UK needs
the US as a trading partner.
As a former UK public sector specialist with
over 35 years experience advising Ministers
and Prime Ministers on a vast range of
communications issues, I can assure you that
Whitehall officials will be doing a lot of work
behind-the-scenes and our Ambassador in
Washington will also be preparing and
ensuring he makes contact with the right
people within the new Trump Administration.
These relationships are vital and help oil the
wheels.

visions of building a different type of society,


Republicans rather set about repealing and
undoing the work of their opponents in office.
Mr Trump has suggested that his priority will
be to do something similar erasing the
Obama presidency.
Britain has always presented itself as the
bridge between the US and Europe, but with
Brexit this is no longer possible. There is a
danger that Trump may go straight to Berlin
and negotiate directly with the Germans, but
he has made supportive statements about
Brexit and warmly congratulated the British
people for their decision. Much will depend
on how Theresa May and Donald Trump get
on.
Nigel Farage, Interim Leader of the UKIP
(United Kingdom Independence Party), and
arch anti-European was not only prominent
during Trumps election campaign in the US
he was also the first British politician to travel
to the US to congratulate Trump in person. It
is difficult to see what official role Farage
could play in our relationship with the US.
Many Brexiters in the Cabinet believe that
Trump will offer the UK the best chance of
new trade deals, something that president
Obama was unhelpful on. The Foreign
Secretary, Boris Johnson has also made
positive comments about Trumps success.

My most recent experience at the Foreign


Office tells me two things. First, there is a
widely held view in Whitehall about American
presidencies. It is thought that while
Democrats take office armed with policies and

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

Donald Trump has made it clear that he will


put America first.

the largest investor in the region and was a


major force behind the Peace treaty.

TRADE

The implications of Trumps Presidency are


huge and largely unknown, and there is every
possibility that once he is installed in the Oval
Office he may not fulfil all his election
promises. His priorities may have to change
due to external factors. The world is littered
with World Leaders who campaign on
domestic issues, only to find they have to deal
with international affairs.

Trumps vision for US trade makes no mention


of the UK or Europe. He concentrates on
NAFTA and China. His threat to impose a 45%
tariff on Chinese goods is worrying. China and
US relations matter for the world; they are two
of the strongest global economies and if they
enter into a trade war there could potentially
be repercussions for everyone.
DEFENCE AND SECURITY
These have been areas of common ground for
the UK and US in the past. The US has been
one of strongest intelligence-sharing partners
and we have worked together militarily and
have consensus on nuclear weapons.

Much of the world looks to America for


guidance, financial support and the upholding
of certain values. It will be interesting to see if
he will maintain that iconic position for the
United States, or whether it will it all unravel?
The World watches and waits.

Trumps statements on NATO have been


stinging. His threat to withdraw support for
countries who are not paying their dues is
worrying. His eagerness to use torture could
hamper future intelligence relationships and
closeness to Russia and Vladimir Putin are
dangerous to the Wests collective security.
He has also indicated he is willing to renege
on the Iran nuclear deal, something that the
UK is very committed to and spent a lot of
diplomatic time on.
There is hope that once he gets into Office he
will quickly realise that allies, particularly
NATO countries, are important.
Trump has made much about his Scottish
connections, his mother was Scottish and he
owns two golf courses there. Nicola Sturgeon,
First Minster of Scotland, warned of real
anxiety after Trumps victory and has been
vociferous about her opposition to him.
The political leaders of Northern Ireland were
quick to remind Trump of the historical links
between their two countries. The US is by far

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

America under Trump Its time for South


Africans to make South Africa great again
The majority of global political experts and
media houses predicted a Hillary Clinton
victory but were sorely disappointed when
Trump pulled a surprising victory out of the
bag. Perhaps this is the reason why, since
Donald Trumps astonishing victory, its hard
to find any positive news coverage praising
Trump for a race well run or showing any
optimism for the future of America and the
world.

Trumps victory has resulted in a singular


global outlook for the future. That is
uncertainty. As the result was announced, the
South African rand weakened steadily due to
shaken investor confidence and heightened
indecision. Theres very little doubt that South
Africa could slip into a negative trade market
as local and international investors turn to
safer markets and investment instruments to
protect themselves from any uncertainty.
The short-term impact of Trumps victory has
already pushed the gold price as investors
look to the precious metal for protection from
the impending volatility. The rand on the
other hand will reap the benefits of the
weaker dollar this will be short lived. As the
dollar strengthens, therell be a new wave of
volatility for the South Africa currency.
The reality is that just like the results of the US
election, nobody is able to predict exactly
what will happen to the South African markets
when Trump takes control of the US
government on 20 January 2017. New risks
and opportunities will certainly emerge but it
might be difficult for South Africa to maintain
solid economic growth.
Many political and economic analysts believe
that Trump will turn his focus inwards. His
presidency will deliver South Africa with the
same level of economic uncertainty as Brexit
did early this year. Trump has made it clear
that he will put America first in every

international negotiation. It is important to


note that this inward-looking approach may
cause damage to international trade
relationships leaving emerging economies like
South Africa open to serious economic
challenges.
The African Growth and Opportunity Act
(Agoa) trade agreement may come under
severe pressure. It wavers the import levies on
approximately 7 000 products from 39 African
countries. Trump has been quite vocal about
his intentions to strengthen the Americas
domestic manufacturing businesses, which
means that he may add higher import duties
to these products.
Given the impending challenges, now is the
perfect time for South Africa to look inward
too. Economic vulnerabilities such as the
downgrade to junk combined with the
geographical challenges like the persisting
drought is putting a damper on economic
growth. That doesnt mean that all is lost. By
implementing economic and structural
reforms to address the challenges of
corruption and infrastructure inadequacies,
South Africa can position itself as in
international destination of choice and the
gateway into Africa.
While the situation in the United States has
the potential to derail our emerging economy,
it is the responsibility of every South African
to ensure that we protect our democracy and
move our economy forward. This is the
moment that our collective resilience, our
diverse ideas and our ability to work together
must
be
used
to
overcome
the
unpredictability. It is time that our political
and economic leaders on both sides of the
fence stand together and show true
leadership.

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

Though his election campaign dismayed many


in the Arab world, Donald J. Trump is unlikely to
implement radical foreign or economic policy
shifts that would alter strategic alliances with
allies like Saudi Arabia and the UAE or impede
American interests in the Middle East.
While Arab government relationships have
varied in strength with past U.S. presidents, be
they republican or democrat, ultimately the
national interests of countries have determined
the course of a relationship with each
administration in office.
Though some notable Arab figures in the
business community in Dubai have been openly
critical of Trump, Arab governments have
adopted a wait and see approach with respect
to the president-elect. Numerous Arab leaders
(in the UAE, Saudi Arabia, Egypt, Bahrain, Jordan,
Lebanon and others) have extended an open
hand to work with Trump.
The rhetoric used in the election campaign by
Trump is widely viewed by Arab governments as
tailored for the domestic consumption of
Americans, rather than directly linked to foreign
countries. Invariably, the opinion is that once he
assumes office, Trump is a businessman who is
unlikely to make radical changes that endanger
U.S. commercial interests and will move to the
center, solidifying ties with the UAE, Saudi
Arabia, Kuwait, Qatar and the wider region.
That said, Trumps retaining of Walid Phares
during the election campaign as a foreign policy
advisor and his potential appointment to the
new administration, could have negative
implications (at a political not necessarily
commercial level) moving forward given his
neoconservative leanings and ardent antiMuslim views. Phares moved to the U.S. from
Lebanon where he took part in the countrys 15year civil war as a member of a radical Christian
militia. It is worth noting that previous
presidents, like George W. Bush have retained
similar advisors (like John Bolton, Elliot Abrams)
with little material impact on the commercial
front with Arab allies.
Politically, issues that are strategically important
to Arab allies of the US, include Irans reentering the international community, Americas
lukewarm support of Palestinians and backing

of Israel, U.S. hesitation to intervene in a more


pronounced manner in Syria, the ongoing
conflict in Yemen and the security implications
of ISIS. On the economic front, Trump is
expected to follow in the path of previous
American
administrations
strengthening
commercial ties with the Arab world that will
help create jobs and spur economic growth in
the U.S.
Though the signing of the Iran accord with the
U.S., Europe and Russia angered Gulf countries
(including the UAE and Saudi Arabia), it has not
adversely impacted American businesses
operating in the region. American businesses do
however have to mute any public expression of
entering the Iranian market if they are heavily
vested in the UAE or Saudi Arabia to avoid risk
of a backlash.
In 2002, the backing of Israels military offensive
against Palestinians by the Bush administration
adversely impacted the perception of the U.S.
across the entire Arab world, leading to a wide
scale grassroots boycott of American fast-food
companies. On the surface, governments of the
region including the UAE and Saudi Arabia were
forced to acknowledge growing popular
resentment. However, while they may not have
officially endorsed the boycotts, they left it to
the commercial businesses to counter them
and as a pressure valve allowed citizens to
demonstrate openly. Still, there was no
measurable risk to Westerners in the UAE as a
result of the regional political environment or
U.S. foreign policy.
Though the substance of the U.S. policies may
have been at odds with the Arab populous with
respect to the invasion of Iraq, there was no
tangible impact as a result of that on businesses
operating in the region beyond boycotts in the
food and beverage market. They thrived and
continue to do so.
Given the past distinction between international
trade ties and political policies of the U.S., a
Trump presidency will unlikely impact American
commercial interests abroad in the Arab world.

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

Political earthquake could shake ASEAN into


shape.
As a political earthquake, the UKs decision to
vote to leave the worlds largest trading block
now serves as a mere appetiser to Donald J.
Trumps America First-led electoral entre.
The global order is in flux, driven by a virulent
brand of populism, and with little end in sight.
Asia Pacific, and more specifically ASEAN
countries in the region had been keenly
following events in the United States. Trumps
America First policy has contributed to his
stunning ascent to the Oval Office, but what
are the consequences of this approach for the
ASEAN region?
One of the cornerstones of President Obamas
administration had been the much vaunted
Trans Pacific Partnership (TPP).
This policy eventually turned from cornerstone
to millstone for the Democratic Partys
preferred
candidate.
Secretary
Clinton
ultimately took up opposition to this
programme in a bid to outflank nomination
rival Bernie Sanders on policy while Presidentelect Donald Trump has used his opposition
to this deal as a lightening rod for his
supporters to vent their anger against the
perceived injustices of globalisation. Both
candidates were crystal clear that the deal was
bad for America in a globalised world that was
not delivering a net benefit for ordinary
citizens.
Even the most optimistic observers must now
admit that the TPP is dead. Singapores Prime
Minister Lee Hsien Loong recently highlighted
the potential benefits of rapidly finalising any
deal in the dying embers of the Obama
administration. Telling TIME magazine that, It
shows that you are serious, that you [the U.S.]
are prepared to deepen the relationship and
that you are putting a stake here which you
will have an interest in upholding.

[Congress] understand that 95 percent of the


world's consumers are outside the U.S. and we
need to be playing out in that marketplace, so
the TPP will help."
With a President Trump likely to tear up the
deal, ASEAN economies could be forgiven for
feeling acute concern for their trading futures
with the U.S. looking likely to reject a pivot to
Asia in favour of a more inward looking
posture.
This inward looking posture could not just
impact on trade but also on regional security.
It can be argued that the Obama years
represented a calculated and partial
retrenchment from the region, leading to an
emboldened China and concerns among
ASEAN governments, still adjusting to a more
assertive China. President-elect Trump has
revealed very little genuine detail in relation to
his foreign policy ambitions, which means that
regional capitals are now playing a waiting
game to see where we go from here. These
are uncharted waters with a new captain at
the helm.
The United States has acted as the leading
guarantor of regional stability in Asia Pacific
for over 50 years. The General Election result
throws this established order into doubt now
that Trump promises America First. The result
could be viewed as the much needed impetus
for ASEAN economies to work more closely
than ever before now that the old guarantor
could become less reliable. Perhaps this is a
watershed for the region in trade terms at
least that we must now enter a new era of
ASEAN First in response to this landmark
political result.

The governor of Singapores American


Chamber of Commerce sounded a cautionary
note, stating that, "We need to make them

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

On November 14th, Chinese President XI


Jinping initiated a phone call with Presidentelect
Trump.
XIs
benign
attitude
demonstrated
Chinas
willingness
to
cooperate with the U.S. in the hopes of
alleviating the Sino-U.S. tension from recent
years. However, Trump gave no concrete
response aside from diplomatic rhetoric.
Although ambiguity is expected at this early
stage, it may imply more uncertainty for the
future of the Sino-U.S. relationship.
In contrast to Trumps tendency towards antiglobalization and protectionism, China is
further deepening reform and opening up to
other countries, engaging in globalization and
regional affairs. The recent Sixth Plenum of
the 18th Chinas Communist Party (CCP)
Congress officially declared XI Jinping as the
core leader. This designation confirmed XIs
consolidation of power and signaled that he
stands above his peers. In this sense, XIs
reform and opening up agenda as well as his
initiatives, including One Belt One Road
(OBOR) and Asian Infrastructure Investment
Bank (AIIB), will be further supported and
promoted in the future years. Due to Chinas
opening policy towards foreign investment
and enterprise services, Chinas circumstances
will remain relatively stable despite the
change in U.S. politics.
From a macro perspective, China may benefit
from Trumps presidency. With the U.S.
withdrawing from TPP, its challenges to China
also end. As U.S. protectionism would limit
the countrys role in the international arena, it
would leave a leadership vacuum for China to
fill, which can then help China transform from
a rule-follower into a rule-enabler in
globalization.
There are a number of uncertainties, however,
with one coming from Trumps possible
restrictions on trade with China. Throughout
his
campaign,
Trump
made
hostile
statements, including bringing cases against
Beijing to the WTO and imposing a 45% tariff
on Chinese imports. In this sense, Trump may
adopt protective measures on certain
industries, particularly in industries where

China has a trade surplus via-a-vis the U.S.,


including higher trade tariffs against Chinas
exports, anti-dumping measures etc.
The Trump regulatory reform plan is
disproportionately and quite intentionally
aimed at boosting the U.S. manufacturing
sector, which may have impacts on clean
energy companies, both foreign and
domestic. Trump intends to reduce U.S. tax
and believes it will help close the current
offshoring gap.
Another uncertainty is Trumps stance on
Chinas currency after labelling China as a
currency manipulator during the campaign.
If the RMB currency fluctuates as a result of
Trump imposing pressure, U.S. enterprises in
China may face unstable operational costs,
fiscal and tax risks, etc. In any way, U.S.
accusations of RMB devaluation are not a new
topic and Beijing is likely to resist the
international pressure and remain a stable
RMB as it has in the past.
Trumps commitments to U.S. employment
are a third uncertainty. Trump has promised
during the campaign that he would bring jobs
back to Americans, particularly in the
manufacturing and infrastructure sectors,
through tax reform and renegotiation of
international trade deals such as the North
American Free Trade Agreement (NAFTA).
Since he has made accusations that American
jobs are being stolen by foreign people,
there are possibilities that Trump may push
U.S. multinational enterprises to employ more
U.S. citizens, both locally and overseas. In this
sense, U.S. enterprises in China are likely to
face pressures from their own country.
However, given the nature of U.S. business
and multinational companies based in the
states, it would take a lot of bureaucracy and
a resourceful government mechanism to
make this happen.

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

Fear of the unknown: reaction to Donald J.


Trumps win
The long-awaited results of the U.S. elections
that declared Trump as president, sounded off
mixed reactions globally, with countries either
openly expressing an uncertainty or
expressing their excitement and hoping for
closer ties.
In India, the market reaction to the election
results was coupled with the major,
unexpected announcement the previous day
to ban currency notes of Rs. 500 and Rs. 1000,
causing Indias stock exchange BSE Sensex
plummeting close to 1,700 points. If only the
results are considered, India Inc. estimated
that Trumps win would not affect India much,
although concerns were raised about trade
deals, immigration policies and his campaign
rhetoric about curbing outsourcing. The
caution came in spite of Trumps promise that
the U.S. and India would work closely
together, if he wins.
Impact on Immigration

One of the promises by Trump during his


campaign was that he would focus on
creating jobs for U.S. citizens by stemming
immigration. He had said that he would end
the use of H-1B visa as a means of cheap
labour and would bring in additional checks
for companies using the H1-B by ruling that
they would have to provide jobs for Americans
before they hire foreign nationals. According
to a report by financial services company India
Infoline (IIFL) , North America generates about
60% of $82bn software export revenues for
the Indian outsourcing industry. The report
says: It will be imperative though, for IT
services providers to focus a lot more
aggressively on value addition by moving up
the value chain to stay relevant in the US
market.

temporary work visas. Indias Commerce and


Industry minister Nirmala Sitharaman said he
will negotiate the visa issue with the Trump
administration when it takes over in January.
Ratification of the Trans-Pacific Partnership
For India, the TPP agreement meant increased
investment in agriculture, trade in goods and
services, promoting investment in the
manufacturing industry, and deepening
cooperation in intellectual property. As Trump
has said he will not ratify the deal, India will
have to find other markets to cooperate with.
There are also ongoing negotiations between
the two countries for a Free Trade Agreement,
which is currently marred by uncertainty.
Sitharaman said Thursday, No matter what
the presidential candidates promised during
the campaign process, we do not know their
position clearly.
ASSOCHAM is confident
Indias apex trade association ASSOCHAM
said it was confident that the apprehensions
regarding Trump would be proved wrong. The
associations President Sunil Kanoria said in a
statement that India Inc. can work with the
Trump administration on infrastructure
projects. He lauded the political change and
added that the factors affecting the local
financial markets, would settle down once the
currency swap in India is accepted fully by the
banks. He added that India now has to
improve its soft power and has to strive to be
a country that complements the U.S.

India has also repeatedly raised concerns


about the procedure of the U.S. to grant visas
to Indian citizens, including filing a case with
the World Trade Organization against
Washingtons decision to impose high fees on

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

Public opinion in Japan towards Donald J.


Trumps election has been negative. Yahoo!
Poll surveying the public the day after the
election showed a large majority said they
expect Japan-U.S. relations to become worse,
and less than 10% expect them to improve.
The Japanese government had expected
Hillary Clinton to win, evidenced by Japanese
Prime Minister Shinzo Abe only meeting with
Clinton during his visit to New York to attend
the UN General Assembly in September.
It is traditional protocol for the Japanese
Prime Minister to visit a newly-elected U.S.
President approximately one or two months
following the inauguration. This was the case
for Bill Clinton, George W. Bush, and also
Barack Obama. On November 17th, Prime
Minister Abe met President-elect Trump in
New York City on his way to attend this years
APEC Summit in Lima, Peru Trumps first
meeting with a foreign head of state since his
election.
Along
with
the
official
announcement of his visit, the Japanese Prime
Ministers Office published a congratulatory
message on its social media channels. These
posts received incredibly high engagement
with the majority of responses negative.

the U.S. and Japan will worsen under the


Trump presidency. Of the respondents, 63%
expect incentives to invest in the U.S. will be
reduced. On November 10th, the Yen-to-USD
appreciated 400 points, although it was only
for a short period of time and it has since
recovered to its pre-election level.
In Japan, there is an obvious feeling of social
pressure to avoid even attempting to
understand Trumps positions, even in casual
circles. During the U.S. election campaign,
people felt embarrassed or guilty to talk
positively about Trump because it was widely
recognized that he is a symbol of vulgarity. It
will be interesting to see how the perception
of Trump in Japan changes, if at all, following
the Prime Ministers visit. Even more
interesting is the prospect of Trump one day
meeting the Emperor of Japan.

After their meeting, Abe said the two had a


very candid discussion, reassuring the public
that the Japan-U.S. relationship can continue
to be strong.
It is standard protocol for Japanese business
leaders to make neutral comments on the
occasion of political elections, whether
domestically or globally. However, Akio
Mimura, the Chairman of the Japan Chamber
of Commerce & Industry and former CEO of
Nippon Steel Sumitomo Metals Co., made a
public comment requesting Trump to make
practical, logical judgment. His comment on
the U.S. Presidential election was absolutely
exceptional, and many businesspeople felt Mr.
Mimuras comment reflected the intense
anxiety and fear shared by the economic
leaders of Japan. In October, Reuters made
surveyed the top 400 Japanese companies,
and 57% expect the trade situation between

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

As Korea and the United States have been


maintaining a close relationship for a long
time, its political climate not only affects
Korea from an economic and trade
perspective, but also in national security and
defense matters.
With a domestic scandal around current
President Park Geun-Hye raging, a lot of
attention has been paid to the U.S. election
result. Trumps election pledges attracted a lot
of interest from the start of the presidential
campaign, and several topics have aroused
discussion not only among politicians but also
the general public as well.

considered, a potential re-negotiation of the


trade agreement, as Trump called for during
his presidential campaign, is of high concern.
Consequently, there are worries that the
Korean economy will be impacted negatively
once Trumps election pledges are executed,
especially as the economy is already
struggling. In particular, Trumps calls to buy
American might dampen export rates,
especially in the automotive sector. As the
U.S. is Koreas second biggest trading partner
after China, even a small change could have
large impact.

The public sentiment after the election has


been full of worries and uncertainty, because
the relationship with and level of trust
towards the Obama administration had been
very good over the past eight years.
The first and foremost topic of concern is
national security, after Trump criticized allies
for relying too much on the military force of
the U.S. during his campaign. As Trump
demands Korea to increase its defense
spending, him being elected as the next U.S.
president will lead to a greater impact on
Koreas national security policy, particularly in
response to increased provocation from
North Korea, a country that favors military
over soft power.
Furthermore,
Trumps
remarks
could
potentially present a wrong image to North
Korea who has continuously shown
provocation through nuclear testing, that it is
okay to ignore the international opinion on
non-proliferation. Nonetheless, Korean media
and the general public still have hope that the
new presidential administration will continue
to maintain the strong relationship between
the two nations, regardless of Trumps
election pledges.
Another important issue is the Korea-U.S. free
trade agreement. Trade and commerce are
two of the most important drivers of the
South Korean economy, as its dependence on
foreign trade is over 90%. Given these factors

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

Like much of the rest of the world, Donald J.


Trumps surprise victory was met with shock
and disbelief in Australia. Unlike much of the
rest of the world, we in Australia were able to
watch the election results roll in in real time.
The first polls across the United States began
to close shortly after 10.00AM AEDT (Sydney
and Melbourne), with initial results in key
states favoring Hillary Clinton. By the time
many of us returned from lunch at around
1.00PM, Trump began to surge. And he did
not stop. We watched his lead grow, and
throughout the afternoon it became
increasingly clear that Clinton was not going
to pull off a come from behind win. As many
of us left work before 6.00pm, U.S. news
outlets were beginning to make official what
we had known for hours. Trump had won. As
we were arriving home after work, Trump was
giving his victory speech.
The reaction has been one of confusion and
discomfort. Our Prime Minister, Malcolm
Turnbull, was photographed throughout the
day in Parliament hunched over his phone
with the Foreign Minister Julie Bishop, neither
of them looking thrilled. Turnbull who
phoned Trump to congratulate him has
already discussed the U.S. military presence in
the Asia Pacific with the next President and
implored him to rethink his opposition to the
Trans Pacific Partnership, of which Australia is
a member. Although Turnbull later told
reporters that Trumps views on the TPP are
well known. To put it simply, like many other
nations in the region, Australia is worried that
a Trump Administration may abandon the
Asia-Pacific, where it performs a vital function
as a counterweight to Chinas growing
ambitions. There are also fears of a Trump-led
trade war with China, Australias biggest
trading partner.

crucial Senate voting bloc. Ring-wing MPs in


Turnbulls own government have been
outspoken supporters of Trump for many
months, with former Prime Minister and
Turnbull nemesis Tony Abbott tweeting
Congrats to the new president who
appreciates that middle America is sick of
being taken for granted. Meanwhile, the
Leader of the Opposition, Bill Shorten stood
by previous remarks that Trumps views were
barking mad, citing the President-elects
comments about women and people of color.
Greens Leader Richard Di Natale noted that
the American people have let us down.
Whilst publicly the government maintains that
Australias highly valued military alliance and
trade relationship with the United States will
remain intact, across the country there is a
deep feeling of anxiety towards a Trump
Presidency. The front page of The Herald Sun
a popular Melbourne tabloid read Shock
and Awe, whilst Wall Street Journal affiliate
newspaper The Australian had America stuns
the world emblazoned on its cover. The
Australian Financial Review simply said:
American revolution.
Yet, a day after the result there were signs that
Australias reaction may have been overblown.
Following an initial 4 per cent decline on the
Australian share market, the ASX 200 added
$50 billion a day later in the biggest one-day
percentage gain since October 2011. Despite
this, across Australia uncertainty remains over
a President-elect who failed to articulate the
finer details of his policies, with no one here
quite sure how Trumps victory will affect the
key areas of Australias relationship with our
closest ally.

As Phil Coorey, Chief Political Correspondent


at The Australian Financial Review, said, the
Trump victory may make life more difficult for
Turnbull on the home front. Trump has
emboldened Senator Pauline Hanson and her
right-wing One Nation Party, who although
not aligned with the government, contain a

Edelman | Southside | 105 Victoria Street | SW1E 6QT London | www.edelman.co.uk | 0203 047 2000 | @edelmanUK

You might also like