WASHINGTON — From the violent reaction in Asian currencies to frantic media speculation about what lies ahead, it’s clear Donald Trump’s big win is a game-changer of epic proportions.
The plunges in Chinese stocks and the yuan alone show how investors are rapidly reordering their approaches to global financial risks and opportunities. The dollar surged on the news Trump scored a second term. US stocks jumped, as did cryptocurrency prices. Yields on US Treasury securities shot higher, too.
The “Trump trade” that Asia has in mind is to take cover. A Trump 2.0 White House will surely be more inward-looking, putting Asia’s export-oriented economies in harm’s way.
The blast radius is a wide one. Though aimed at China, Trump’s planned 60% tariffs will upend Japan, South Korea, Thailand, Vietnam and other trade-driven economies. The fallout on transshipment flows could be incalculable.