[RN7]

To give my own two cents on what's going to happen under Trump.

Infrastructure: Trump made a lot of references to how the US has fallen behind other countries in the condition of its road and rail network, bridges and airports, and there is talk about renovating the deprived inner-cities. Certainly in comparison to some Western European countries, China, Japan and the Gulf States the US has neglected its transport infrastructure. This is a major project and could cost up to one US$ trillion or more and I'm not sure how he is going to fund it, but it would be a popular move and I think we can expect some action on this in the near future. I think it will be part of his strategy to rebuild American industry, and it will provide a big boost to the construction and steel industries.

Climate Change: Trump is no believer in climate change and is heavily critical of other countries such as China and India which are now the main contributors to emissions. He will almost certainly pull America out of or heavily modify the Paris Climate Agreement to suit America. He really has no choice if he wants to revitalize the coal industry and expand the energy and petrochemical sectors which will be vital to creating jobs and expanding the economy. This could prove a major political problem for Trump over the next few years.

NAFTA: I think it's fair to say that it's dead at least in its current form. I don't think Canada has too much to worry about but Mexico certainly does. All of those factories which relocated to Mexico to take advantage of cheap labour exist for the purpose of exporting manufactured products back to the US. They make huge profits for US companies and the Mexican government takes its cut in various types of taxes, and the factories employ hundreds of thousands if not millions of Mexicans. It's going to be tough on the Mexican economy as these factories are on the frontline if Trump carries through his promise to bring industry back to America, but Mexico is a potentially rich country and it's a shame its government and ruling class have done little to exploit that fact. Trump could also use the threat of this to force Mexico to at least patrol its own border if not partially fund a wall/fence on the border.

NATO and Europe: Trump wants the Europeans to pay their share of the defence burden. The US accounts for 70% of NATO's budget so the Europeans have no real argument here. To be fair Britain does spend its fair share on defence, but the other big European powers such as France, Germany, Italy and Spain really do not. I don't think Trump is anti-NATO but he does expect rich European countries to spend more on their own defence. Higher defence spending will hit the budgets of all European countries, and with Russia flexing its muscles in the east and a lot of money and resources being diverted to cater for the flood of immigrants and refugees it could lead to a lot of discontent in Europe as other services are strained. Europe has a lot less to worry about in trade issues than Asia as US owned factories in Europe are mainly US owned subsidiaries that have been around for decades or were specifically built to have access to the European market. However Ireland's status as a tax haven for some US corporations will be heavily scrutinised, and Germany could take some flak for running a US$ 75 billion trade surplus with America.

It will be interesting to see how Trump develops US relations with the major European powers over the next couple of years. Brexit highlighted the relative faults and limitations of the European Union, and with Jean Claude Juncker wanting to escalate the formation of a EU Army because Trump is now US president it will be even more interesting to note how individual European countries will really support a new army that excludes the US and British armed forces. Trump's political views are also the polar opposite to Angela Merkel and Francoise Hollande in Germany and France, although maybe less divergent with those of Britain's Theresa May. With Europe's financial problems and the chaos caused by the huge influx of refugees I think it's possible we could also see right wing governments taking power in France and Germany in the very near future.

Russia: Trump and Putin seem to have a lot of mutual respect for each other, so we should see a diffusion of tension with the Russians. However I think Putin imagines that Russia will be an equal to America on the world stage, but I don't think Trump thinks that and has a tongue in cheek attitude to Putin. Trump will certainly lift the current sanctions against Russia which is crippling the Russian economy, and I think he will give Russia a free hand in the Crimea, the Ukraine and the former Soviet states as they are of no real interest to America. The US will probably also cooperate with Russia over Syria and ISIS. I could also see Trump using the threat of Russia to force European members of NATO to spend more on their own defence.

The Middle East: I think Trump's attitude to the Middle East will cause some problems. Trump will go after ISIS more aggressively than Obama, so we will see more US forces sent to the region and there will be some cooperation with the Russians in Syria in this matter. Other than that I think Trump's attitude towards the Middle East is that its more trouble than its worth. America no longer needs oil from the Arabs and OPEC, so they can no longer dictate American policy in the region. Trump is definitely pro-Israeli which is bad news for the Palestinian National Authority and its backers. Its also bad news for Iran and we will see an abandonment or radical modification of Iran's nuclear deal. Saudi Arabia could also find themselves in trouble as I can't see Trump tolerating their export of Islamic fanatics and manipulation of oil prices while America underwrites its national security.

China and Asia: Trump heavily criticised China in his election campaign and I can't see him backing away from changing the current status quo of US-Chinese trade relations. I don't know if Trump will carry out his threat to impose heavy taxes on Chinese imports and start a full scale trade war. Trump may simply tax selective Chinese imports and dangle incentives to encourage US companies to bring the factories back to America, but it's not good news for the Chinese economy no matter what way you look at it and I think China's day in the sun is over. At the very least China will have to seriously reduce its US$ 343 billion trade surplus with America and reel in its government backed cyber-espionage/thievery.

China of course is a lot more economically and politically powerful than Mexico. China owns US$ 1.3 trillion worth of US Treasury Bonds and could seriously disrupt the supply chain that supplies the US and the developed world with manufactured goods. China could also target selective US companies in China and not buy any more airplanes from Boeing. But the Chinese economy is already in serious trouble largely due to its own making, and the money it earns from its trade surplus is dependent on factories which make goods for foreign corporations (mostly American). If the US imposes tariffs on Chinese imports and also sanctions certain Chinese companies and individuals from trading and using US dollars like they are currently doing with Russia then the Chinese economy could collapse. A hardline Chinese government could also cause a lot of trouble in the Far East for America and its allies. Chinese defence spending is of course linked to its economy but finding money for arms has never been a problem for communist dictatorships. China could cause no end of trouble in the South China Sea and threaten Taiwan and other countries in the region with whom it has territorial disputes notably Japan. China could also encourage and even fund North Korean aggression. The role of Russia could also be important in this respect as Russia is the main source of Chinese arms purchases and military technology and a lot of its energy and raw materials.

Other Asian countries could also face the wrath of Trump over trade. Japan, South Korea, India and Taiwan have a combined trade surplus of US$ 130 billion with America, with Japan alone accounting for a US$ 67 billion trade surplus. Japan is likely to face the worst criticism as Japan also owns US$ 1.1 trillion of US Treasury Bonds which is nearly as much as China, and is the second largest investor in America after Britain. Japan also spends 1% of its economy on its own defence and this expenditure is less than Britain and France despite the fact that the Japanese economy is as large as the combined British and French economies. Like many NATO countries in Europe Japan has no argument here. The knock on effect of trade trouble with China and other could also put the entire Asia-Pacific region into recession, and will also hit the resource and energy export orientated Australian economy.