What Might It Mean For Investors In Singapore If Donald Trump Becomes President Of The United States?

Credit: Gage Skidmore

First he was a rich kid, then he was a business tycoon and reality TV star. This year, he may even win the race to become the next president of the United States. Donald Trump is a personality hard to ignore.

With the U.S. now voting on the candidates for the presidency, Trump’s leading the way in the Republican camp. Should he win the election race and emerge as president of the U.S., what that might for us investors in Singapore?

Here’s a quote from Trump on his view on jobs:

“I will bring jobs back from China, I will bring jobs back from Japan, I will bring jobs back from Mexico.”

From the above, it seems quite obvious that Trump is all for bringing jobs – in particular, manufacturing jobs – back to his country. Although it seems like an uphill battle for him to fight against the trend of globalisation, there may be serious implications for Singapore investors if he succeeds.

Singapore has thrived on global trade as one of the major trading hubs in the global economy. If inter-country trade would slow as a result of the U.S. moving toward being a more independent economy, the intensity of the movement of goods and services passing through Singapore may lessen given the U.S.’s heft in the global economy.

Manufacturing companies with global clients – of which Venture Corporation Ltd (SGX: V03) is one example – may see their businesses negatively impacted. Companies or investment trusts that really depend on the trading of goods  – such as container port owner Hutchison Port Holdings Trust (SGX: NS8U) – may also face challenges as trading activity between the U.S. and China falls.

Here’s Trump with his views on the U.S. military and the conflicts it is in at the moment:

“I will also quickly and decisively bomb the hell out of ISIS, will rebuild our military and make it so strong no one — and I mean, no one — will mess with us.”

From the comment just above, it seems that Trump is planning to make the military of the U.S. an even larger and more powerful force than it already is now. As the world’s most powerful nation beefs up its military might, I think the most likely scenario to play out is that everyone else would follow suit. If that happens, that’s a potential tail-wind for companies with defence capabilities. One such firm in Singapore’s stock market would be Singapore Technologies Engineering Ltd (SGX: S63).

Foolish Summary

It can be common for politicians to talk the talk but not walk the walk, so it is hard to know for sure what Trump would do if he indeed becomes the U.S.’s president. But, based on some of the things he has stated so far in his campaign, it seems to me like the world would be a much different place if he does stick to what he has said. And like we’ve seen, there’d be winners as well as losers, even for companies in a stock market as far away from the U.S. as Singapore.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim doesn't own shares in any companies mentioned.