New economic power balance in the Trump era - ERDAL TANAS KARAGÖL

New economic power balance in the Trump era

The long-running presidential race in the U.S. ended in favor of Donald Trump. The statements that the gap between Trump and Hillary Clinton shrank led to mobility in markets last week. Markets, which strongly reacted to even the possibility of Trump getting closer to Clinton, experienced a literal shock with Trump's victory.

Trump is a well-known businessman not only in the U.S., but also in the world. He can be considered to be successful in the field of economy and attaches importance to economic and business-related issues. This being the case, why did his victory cause a shock?

What is the main reason for strong market reaction to Trump's victory?

First of all, the U.S. witnessed one of the most controversial election periods in its political history and the election results were quite surprising. Almost all opinion polls showed that Trump was behind Clinton. The media's overt position against Trump during the election period, as well as markets taking Clinton's victory for granted, explained why election results caused such a severe shock.

Trump was not even given a chance, let alone a possibility of victory. In fact, there are reasons why he was given no chance. The most important reason is the slogan “Make America Great Again,” which Trump used in the election campaign. Since the very beginning, this statement was negatively perceived and came under fire.

As well as his promises, Trump's harsh rhetoric came to the fore in the election campaign. He presented his negative view of Muslims to the U.S. public as an absolute policy without hiding it. His promises to deport immigrants, anti-immigrant speeches and statements about removing the right to be a U.S. citizen for those who are born in the U.S. were both radical promises and harsh statements.

Immigrants, who encounter impassable barriers in Europe, are now facing the risk of the same barriers in the U.S. which is considered to be an immigrant country. An anti-immigrant player, who can be further defined as an enemy of immigrants, is the new president in the U.S. which attributes its strength and social welfare to diversities and differences.

Even this situation alone shows a new power balance will emerge in the world and the dynamics are highly likely to change. While immigrants are the most important topical issue in international politics, economy and security, the U.S. will take up an overt position on immigrants for the first time. At least, Trump argues so.

On the other hand, as free trade becomes widespread in the world, countries leave aside geographical distance, political disputes or troubled areas and try to remove obstacles to trade. Nevertheless, Trump is against free trade agreements. Economic players' prejudice about Trump stems from the concerns that Trump will actualize his statements. Also, there is the frustration and failure of the U.S. media. Its efforts to create a perception as it desired through biased, sidelined and unfair news, including those about Turkey, completely fizzled out this time.

The negative perception method used against Trump collapsed. While the U.S.'s own people do not trust the news of the U.S. media, we must once again question the credibility of news in the international arena.

What impact could President Trump have on Turkey?

Trump did not use a negative statement about Turkey during the election campaign. Certainly, statements about Muslims, immigrants and trade are of interest to Turkey and Turkey will be unavoidably affected by them like other countries. However, it is a fact that we should not expect great changes in the U.S.'s decisions on realpolitik according to the elected presidents.

The appreciation of the dollar and the losses in the stock market are not unique to Turkey alone. Like other countries, Turkey is also naturally affected and will continue to be affected. However, it should be noted that the process must be well managed in the short term and macroeconomic indicators must be maintained. I mean, we need to reduce the impact level.

Finally, the Fetullah Terrorist Organization (FETÖ), the perpetrator of the July 15 coup attempt, explicitly supported Clinton. Therefore, Trump's victory might both shift power balances in the world and be the beginning of a favorable process for Turkey.

I need to add that due to the change in the world's economic power balance, states have entered into a period of stronger and more radical leaders who challenge the established order and convey strong messages to their public.


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