On January 20, President-elect Donald Trump will officially assume office as the 47th President of the United States. This marks the continuation of his political career and introduces new uncertainties and expectations for global financial markets.

1. The Trump 2.0 era

In his victory speech, Trump declared that he would usher in a "golden era for America." Known for his strong and pragmatic leadership, his policies often carry a strong "America First" ethos.

During his first term (2017–2021), Trump significantly boosted the US stock market with tax cuts, deregulation, and economic growth initiatives. However, his protectionist trade policies and diplomatic strategies also triggered market fluctuations.

As he returns to the White House, how Trump balances domestic policy and international relations will be a pivotal factor influencing US stock market trends.

2. Key milestones: how can the market prepare?

History shows that policy timelines often serve as triggers for market volatility. Understanding the timing of Trump’s policy rollout can help investors better manage risks.

1. November 2024: Trump wins the election. The Republican Party gains control of both chambers of Congress, boosting expectations for decisive policy implementation.

2. January 20, 2025: Official inauguration. New cabinet appointments lead to heightened market volatility, with investors watching closely for policy signals.

3. Late January 2025: Cabinet nominations.

4. Late January to early February 2025: Strategic planning begins, including the release of the National Security Strategy Report and submission of the FY2026 budget proposal.

5. Mid to late 2025: Implementation of the National Security Strategy, and Congressional approval of the FY2026 budget.

*Source: [Western Securities] Overseas Policy Special Report

3. Trump’s policy agenda: prioritising domestic interests

Trump's policy proposals continue to reflect his previous style: tax cuts and deregulation.

1. Tax policy: Trump tends to maintain low tax policies, including keeping or further lowering corporate tax rates. His policies emphasise stimulating investment and economic growth through tax cuts.

2. Government spending and fiscal policy: He tends to reduce government spending on social welfare and public projects while increasing spending on defence and security. His policies emphasise less government intervention and more reliance on market forces.

3. Trade policy: Trump's "America First" policy emphasises protecting US manufacturing through tariffs and bilateral agreements, which may exacerbate tensions with major trading partners, especially China.

4. Employment and labour policy: He opposes the federal government setting higher minimum wage standards and leans towards reducing labour regulations to increase business flexibility and lower hiring costs.

5. Healthcare policy: He strongly opposes universal healthcare and supports market-oriented healthcare reforms to reduce the government's role in healthcare.

6. Energy policy: Trump supports fossil fuels and opposes renewable energy, advocating for the removal of restrictions on US energy production.

7. Digital currency: Trump is fully supportive of digital currencies, advocating for the removal of government regulation on digital currency transactions.

4. Tariff policies on China: escalation or moderation?

Trump may revive high tariffs on Chinese goods, potentially triggering a chain reaction in global markets:

1. China's exports remain stable, but the export structure is further shifting: China may continue to adhere to a strategy of diversifying its export markets, reducing reliance on specific markets to lower trade risks. Moving forward, it may further expand into other emerging markets, such as Africa and Latin America.

2. Rising US inflation: Higher prices for imported goods lead to increased consumer costs.

3. Trade deficit persists: Despite higher tariff revenues, narrowing the trade deficit remains challenging.

*Source: [Western Securities] Overseas Policy Special Report

5. "Trump trades"

Trump Media & Technology Group (TMTG) was founded by Donald Trump with the primary aim of providing a platform for free speech, especially after his social media accounts were banned from mainstream platforms. TMTG's main product is Truth Social, a social network targeted toward a conservative audience and designed to bolster Trump's political influence. The company's development is closely tied to Trump's personal brand and political career, particularly during his 2024 presidential campaign.

Tesla CEO Elon Musk is a staunch supporter of President Donald Trump and has spent millions of dollars supporting his campaign. As an American electric vehicle manufacturer, Tesla benefited from increased support for domestic manufacturing during Trump's administration, which will help drive Tesla's expansion in the US market.

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