President-elect Donald Trump future policy stance over trade poses the single largest risk to the global economy, a survey from forecasting firm Oxford Economics has found.
The firm’s annual Global Risk Survey, conducted in the aftermath of Trump’s victorious election day, examined what investors see as being both the biggest risks to the world economy over the next 12 months and the biggest potential upsides, reports The Independent.
Nearly 30 per cent cited a trade war triggered by Mr Trump as the top risk to the global economy over the next two years.
Six months ago, only 2 per cent of respondents cited Mr Trump as the key risk.
The President-elect has previously said that despite China being America’s biggest trading partner, a trade war was already under way and that the country was a “currency manipulator”.
Last week, Mr Trump spoke directly with Taiwan President Tsai Ing-wen breaking with nearly four decades of US policy and prompting a protest from Beijing, which regards the island as its territory.
He also has vowed to crack down on imports from countries like Mexico and China with steep tariffs – as high as 45 per cent for China, and 35 per cent for Mexico.
Yet while Trump’s stance on trade is seen a potential risk, his domestic policies are viewed as potentially stimulating for the US, with 38 per cent saying the US economy could surge on new fiscal stimulus he has proposed.
“The results from the latest Global Risk Survey highlight a marked shift in the global economic outlook” Jamie Thompson, head of Macro Scenarios, said.
“With the degree of policy and political uncertainty unusually elevated, the greatest source of risk to the global economy—both to the upside and the downside— is undoubtedly now the US policy stance once President-elect Trump takes office.”