What to Anticipate from a Trump Administration in 2025?

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SIMON BROWN: I’m currently speaking with Bastian Teichgreeber, the Chief Investment Officer at Prescient Investment Management. Thanks for joining me, Bastian. With president-elect Trump scheduled to be inaugurated on January 20th, many are considering how his administration might shape global trade policies. He’s certainly attracted attention with his tariff discussions, but do we truly understand what to anticipate from President Trump once he takes office?

BASTIAN TEICHGREEBER: Thank you for having me, Simon, and good morning. Indeed, there’s been extensive talk regarding tariffs. There’s significant worry, particularly following Trump’s sweeping tariff threats aimed at various nations, which could profoundly impact global trade, especially with Brics countries, affecting us here in South Africa.

That said, we must proceed with caution. Trump is known for his transactional nature and understands that tariffs can stunt growth, influencing both foreign nations and Americans too. Hence, it’s still unclear whether he will go through with all the tariff policies he’s pledged.

SIMON BROWN: You raise a good point. When he previously warned Mexico and Canada, it seemed more like a bargaining tactic rather than a real intention to enforce a 25% tariff. His transactional approach is quite apparent, as some experts in China suggest they find Trump’s style manageable.

BASTIAN TEICHGREEBER: Indeed. Historically, we suggested that Trump’s presidency would usher in more uncertainty compared to Biden’s potential leadership. Still, I’m not so sure that’s entirely accurate. Trump is indeed transactional and strategic; he sincerely wants what’s best for the American populace, which is understandable.

For us in South Africa, the optimum strategy is to align with his policies. Supporting an independent Brics currency or moving away from the dollar may not yield substantial results since he will likely continue to utilize the dollar’s strength and its status as the global reserve currency.

SIMON BROWN: Isn’t there an inconsistency in that Trump champions a strong dollar, yet a weaker dollar could ultimately benefit the U.S.?

BASTIAN TEICHGREEBER: Yes, in the long run, a weaker dollar might be beneficial, but overall, Trump tends to favor a strong dollar. Additionally, the U.S. economy is less dependent on exports now; it’s largely driven by consumer spending, which enables them to handle a strong dollar. So that’s the current direction.

The policies he is likely to implement, such as tariffs and fiscal expansion, should support the dollar, which has already begun to strengthen—indicating that Trump’s strategies might indeed fortify the dollar’s stability.

SIMON BROWN: So, is it as simple as a stronger dollar due to Trump’s policies automatically resulting in a weaker rand, considering much of this is already anticipated?

BASTIAN TEICHGREEBER: It’s not quite that straightforward, to be honest. Our South African economy is closely tied to global growth. Generally, our currency thrives when the global economy is flourishing. Many of Trump’s policies could ignite growth.

If we consider his intentions to deregulate U.S. businesses and reduce taxes to invigorate consumer spending, this could enhance global growth prospects, which may ultimately favor the rand as a high beta currency.

Thus, it’s conceivable for both a stronger dollar and a stronger rand against other currencies.

SIMON BROWN: One final note—geopolitical tensions continue to be a major concern, with ongoing issues in Ukraine, Syria, and the Middle East. Investors, especially in Europe, are certainly monitoring the situation closely.

BASTIAN TEICHGREEBER: Absolutely. I concur that geopolitical tensions are likely to present significant risks as we move into 2025. It seems that uncertainty remains a persistent theme, particularly as the situation in Ukraine shows few signs of de-escalating. That’s a concerning reality.

While Trump has made grand pledges regarding conflict resolution there, it’s uncertain how events will unfold, but we must remain vigilant about these rising tensions.

SIMON BROWN: You’ve made an important point. Uncertainty is indeed a constant factor, and regrettably, it appears that the situation in Ukraine will endure for some time.

Thank you for your time, Bastian Teichgreeber, Chief Investment Officer at Prescient Investment Management. I appreciate your willingness to engage early in the discussion.

To catch the full MoneywebNOW podcast, tune in every weekday morning here.

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