Donald Trump's return sparks global stability fears

With Donald Trump set to return to the White House next Monday, global leaders and policymakers are bracing for a year of significant political and economic challenges. After a tumultuous first term, his re-election signals potential disruption on the international stage, particularly over his confrontational approach towards China, Mexico and the European Union.

The world’s already fragile stability, exacerbated by the lingering effects of the COVID-19 pandemic, the Russia-Ukraine war, Middle Eastern conflicts, and climate change, points to an uncertain future.

Trump’s foreign policy, which has leaned heavily toward nationalism and protectionism, could further destabilise global markets. His previous term saw the initiation of a trade war with China, including the imposition of tariffs. With his return to power, these trade conflicts are likely to reignite. Trump has already indicated plans to impose 10-20 per cent tariffs on all Chinese imports.

The economic repercussions of a renewed trade war between the US and China would be severe. Both nations might devalue their currencies to gain a trade advantage, which, while benefiting them in the short term, would harm developing nations, particularly in Africa. Weaker currencies would lead to inflation, reduced purchasing power, and a rise in external debt.

Additionally, China’s role as the largest global consumer of oil means any downturn in its economy would reduce demand and cause global oil prices to fall. While oil-importing nations might benefit from lower prices, oil-exporting economies, particularly in Africa and the Middle East, would be hit hard. The ripple effects would create volatility in global markets.

International collaboration

Trump’s protectionist stance contradicts the growing global consensus that multilateralism is key to tackling today’s challenges. Issues such as climate change, the COVID-19 pandemic, and geopolitical conflicts require international collaboration, yet Trump’s rhetoric often favours unilateral actions that isolate the US from its allies. For example, his threat to take control of the Panama Canal, following Panama’s dealings with China, represents a unilateral move that could destabilise international relations.

The world cannot afford isolationism in the face of crises such as the Russia-Ukraine war or climate change. Global institutions like the United Nations and the World Trade Organization are essential for guiding collective action. In an interconnected world, disruptions in the major economies have far-reaching consequences.

The challenges facing the world today, from economic instability to climate change, require collective action. Trump’s return to power presents significant risks, but it also underscores the necessity for global cooperation. The global community must work together to address pressing issues, finding common ground to avoid conflict and economic hardship.

The writer is a journalist and communication consultant.