US election impact on trade proposals

A perspective from Franklin Templeton – Brandywine Global

Partnervest

This is a summary of ‘Trade proposals in perspective’ published on 15^th July 2024 by Paul Mielczarski, Head of Global Macro Strategy, Brandywine Global.

The US election could introduce vast policy changes on several fronts. While fiscal policy and taxes may be at the forefront, proposed trade policies could have massive implications.

Global elections in 2024 are turning out to have more plot twists than a summer blockbuster. And while we are not seeking to be political pundits or enter the forecasting fray, as investors we must analyse potential election outcome implications and gauge the possible impact on policy, the economy, and financial markets.

The US presidential election, in particular, has the potential to introduce vast changes on several policy fronts. While markets appear to be focusing largely on fiscal policy and taxes, the proposed new trade policies are massive in their scope. If implemented, Donald Trump’s campaign proposals on trade, which include a 60% tariff on imports from China and a 10% tariff on imports from other countries, could send US tariffs to their highest levels since the 1930s. The magnitude of these proposals could certainly change, and it is impossible to know how or when any new trade policies would be implemented. However, even if only half of these tariffs are introduced, 70 years of US trade liberalization could be reversed. It is extremely difficult to forecast the impact of such a large policy shift on financial markets, inflation, domestic and global growth, or geopolitics. Hence, it is unlikely that markets are fully pricing in the impact of these proposals.

Partnervest is a specialist provider of investment solutions for Unions, Entitlement Funds, Charities and through your financial advisor at Industry Super Funds.

In particular we offer 5 multi asset funds:

• Franklin Multi-Asset Defensive Fund
• Franklin Multi-Asset Conservative Fund
• Franklin Multi-Asset Balanced Fund
• Franklin Multi-Asset Growth Fund
• Franklin Multi-Asset High Growth Fund

These funds are adjusted to consider the relative attractiveness of each asset class given the prevailing economic conditions, whilst maintaining risk and return parameters.

To learn more about how Partnervest can help you build your financial future, contact Serg Premier 1300 734 496 or email [email protected].