Global credit rating agency Fitch deems President Donald Trump a potential threat to the global economy.
In their report released Friday, Feb.10, Fitch analysts harped on the unpredictability of U.S. policy and the Trump administration’s willingness to sever established international ties as factors that could potentially destabilize markets worldwide.
Risk To Global Markets
The agency, rating countries on their perceived debt-payment ability, said Trump’s presidency could be “a risk to international economic conditions and global sovereign credit fundamentals.”
Tax cuts and infrastructure plans planned by Trump could bolster the economy, but the agency believes it’s not going to happen right now. The team led by Fitch managing director James McCormack pointed to the administration’s abandonment of the Trans-Pacific Partnership, a pending reevaluation of the North American Free Trade Agreement, and a general rebuke of American companies with operations and investments abroad.
The analysts feared that “prolonged” volatility of currencies and financial markets may follow, with countries like Canada, Germany, China, Mexico, Japan and the United Kingdom as some that could bear the most brunt.
The feared primary risks to sovereign credits comprise potential disruptions on trade relations, decreased international capital flows, and limits on migration, which could adversely affect remittances. Nations with a huge amount of U.S. immigrants sending back remittances and shipping goods to the United States may face economic risks, the report added.
In an analysis, it is thought that these factors cited by Fitch may very well be the reason Trump was elected and rose to power. Forbes contributor Tim Worstall even dubbed it “a refreshing change” for a politician to actually implement his campaign promises, including bringing or keeping jobs at home.
In the wake of Trump issuing the immigration ban, several new protocols are believed to be under consideration. These include visitors to the United States potentially getting required to give their Twitter and Facebook passwords to the immigration counter at the airport or to border security agents.
"We want to get on their social media, with passwords: What do you do, what do you say? If they don't want to cooperate then you don't come in,” said Homeland Security Secretary John F. Kelly, clarifying this is just one of the options for added security layers being considered.
The Executive Order titled “Protecting the Nation from Foreign Terrorist Entry into the United States,” issued Jan. 27, sought to temporarily bar the entry of people from seven Muslim-majority nations in the country and suspend its refugee program. It’s a 90-day ban targeting residents of Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen.
Thousands of Americans flocked the streets to protest the immigration ban, with Google, Facebook, Apple, Microsoft and other leading tech firms and businesses taking a united legal stance against it.
In tech-related policy news, net neutrality could be at risk now that Ajit Pai is at the helm of the Federal Communications Commission, with the Trump administration taking a different strategy and seeking to eliminate important regulations set under Obama’s time.
In his first days in office, for instance, the new FCC chairman closed the investigation on internet companies' zero-rating practices, no longer probing if they violate the Open Internet Order or have negative effects on the market.