Donald Trump could easily be sworn in as the US President by the end of this year. He is neck and neck with Joe Biden in the polls. If Trump takes power again in the US, things will get very difficult economically for Europe. BNR's in-house economist thinks Europe could fall victim to competition between the US and China. 'We're already getting a little crushed in that competition.'
With Trump as President, things are going to get 'very tough' economically
According to de Jong, protectionist measures were on the rise before Trump became president in 2017, and that policy continued after Biden became president. “Initially the Democrats were against it. But when they came to power they did not reverse those actions.' In fact, according to De Jong, Democrats have introduced more protectionist measures. He mentions, among other things, the Disinflation Act. The economist also doesn't expect Trump to pass the law in the short term if he wins the presidential election later this year. 'Trump is a person who, when he walks in somewhere, he wants to make it known that he's there. It seems to me that he would kick it up a notch, with different accents than Biden.
De Jong expects the war between China and the US to be central to Trump's second term. Special attention will be paid to the hunting of raw materials. 'Increasingly people are realizing that China has a very strong market position in this area, not only the raw materials for strategic products, but also the processing of those raw materials. The country is completely dominant in many sectors. I think America will try to change that under Trump. However, he thinks this would lead to 'conflict' if that war is waged.
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If these conflicts arise, Europe in particular will bear the brunt. 'We're already getting a bit crushed in that competition. Think closer to home, such as ASML and the restrictions placed on that company regarding sales to Chinese customers. But the auto industry, a bastion of the German economy, is also already having to deal with a veritable avalanche of electric cars from China.
Overall, de Jong expects the status quo in the global economy to remain largely unchanged, but competition between the US and China will increase. “It's going to be harder than it is easy.”
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