Republican Donald Trump claims victory

Following his win in Pennsylvania and earlier victories in other key battleground states in Georgia and North Carolina, Republican candidate Donald Trump took to the stage shortly after in Palm Beach, Florida. 

Trump is set to become the 47th President of the United States (US) as he took an early victory lap on stage and expressed gratitude to his family, friends and team. Interestingly, alongside Grover Cleveland – the first Democrat elected following the Civil War – Trump is the second president to serve for a second non-consecutive term for four years.

In a surprising turn, Trump’s victory speech was relatively subdued; no threats of tariffs were mentioned, and he did not refer to his opponent, Democratic candidate Kamala Harris, who postponed her scheduled speech at Howard University. ‘Winning the popular vote was very nice’, Trump said in his speech, adding: ‘America has given us an unprecedented and powerful mandate; we have taken back control of the Senate’.

Several members of Trump’s team and friends were invited to speak on stage. His running mate, JD Vance of Ohio, thanked Trump for allowing him to ‘join you on this incredible journey’. Vance added, ‘I think we just witnessed the greatest political comeback in the history of the United States of America’.

Dana White, the CEO of the Ultimate Fighting Championship (UFC), also addressed the nation, stating, ‘Nobody deserves this more than him [Trump]’. He remarked that Trump ‘is the most resilient man I have ever met’.

Elon Musk, CEO of SpaceX and Tesla, also received significant praise from Trump, voicing his appreciation and calling Musk a ‘super genius’, emphasising that ‘we have to protect our geniuses’. Musk has been vocal in his support for Trump and reportedly invested over US$130 million in his campaign.

Foreign leaders applauded Trump for his victory. UK Prime Minister Keir Starmer congratulated Trump and said he looks forward to collaborating with Trump in the years ahead. India's Prime Minister Narendra Modi took to the platform X to convey his wishes as well, emphasising his desire to strengthen the partnership between the two countries. Additionally, Israeli Prime Minister Benjamin Netanyahu described Trump's win as ‘history's greatest comeback’ in his post on X.

What does Donald Trump’s victory mean for the US?

Donald Trump will be inaugurated on 20 January 2025 at the US Capitol building in Washington, DC. Americans can expect tax cuts, immigration controls and tariffs.

A Trump presidency will also likely mean lower taxes, a move with plans for widespread changes to taxation, which should increase spending and spur sentiment, at least in the near term.

n his own words, Donald Trump’s second term is expected to be ‘nasty a little bit at times, and maybe at the beginning in particular’. Trump has promised an aggressive approach towards illegal immigration in the US, which could include plans of mass deportation of undocumented migrants, noting that he ‘will launch the largest deportation program in American history to get the criminals out’.

Trade tariffs are another one of Trump’s policies that the US economy can expect, as he is expected to increase the protectionist policies he introduced in his first term. However, as noted, he failed to address this in his victory speech today.

Another important issue that Trump and the team must address is the debt ceiling (or debt limit), which is the maximum amount of money the US Treasury can borrow to pay its debt obligations. You may recall that the ‘statutory debt ceiling’ was suspended in early January and is due to be reinstated on 1 January 2025. This may involve the Treasury drawing on its existing cash to fulfil its short-term obligations until another suspension of the debt limit is imposed or the debt ceiling is further increased.

Trump trade is alive and kicking

Markets responded as expected, reigniting the Trump Trade, with the US dollar (USD), US Treasury yields, US equities and digital currencies all catching a strong bid.

Despite moderately fading session highs, the US Dollar Index is up 1.5%, which could eventually see the Index aim for June peaks at around 106.13, closely followed by 106.52, the high for the year. US Treasury yields remain underpinned, with the benchmark 10-year yield holding near session highs around 4.42% (up 3.5%).

While commodities experienced a selloff, we have seen a modest recovery unfold, drawing spot gold (XAU/USD) and WTI oil off session lows. In the crypto space, versus the USD, Bitcoin clocked a fresh record high of US$75,415 (up 6.4%), and Ethereum is up nearly 9.0% and testing the upper boundary of a symmetrical triangle, pencilled in from US$2,062 and US$2,790.