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- The relationship between Trump and Putin has long been a source of controversy.
- Analysts say Trump could broker a Ukraine peace deal on terms favorable to Russia.
- That could have severe consequences for both the US and global economy, experts say.
With only a month to go before the presidential election, CEO Jamie Dimon warned last month that investors are overlooking geopolitcal tensions as key risk that could significantly weaken the global economy.
“Geopolitics is getting worse, they are not getting better. There is chance for accidents in energy supply. God knows if other countries get involved. You have a lot of war taking place right now,” Dimon told CNBC-TV18 during a visit to India.
Dimon said that if geopolitical tensions elevate to instability and conflict, it will drag down the stock market in a way that pales in comparison to prior market crashes.
Trump’s words and actions differ
Ingram pointed out that there has in the past been a gap between Trump’s words and actions, and questioned whether Trump would be willing to risk the economic blowback on the US of canceling Ukraine aid, with arms manufacturing firms in swing states such as Pennsylvania massively boosted by the Congressional aid bills.
“What we’re hearing from him, from a political perspective, but what he’d actually practically do will be different,” said Ingram.
It is also unclear Trump would continue to impose sanctions on Russia if he becomes president.
“It’s much harder to predict him on that stuff,” William Reinsch, a senior advisor at the Center for Strategic and International Studies, told The Wall Street Journal in August. “I would say [he is] sort of inconstant. He tends to veer from one thing to another.'”
Either way, Trump will have to deal with economic problems at home, including record debt levels and surging interest payments.
Trump’s economic plans are estimated to raise the federal debt level by double the figure expected if Kamala Harris is elected, according to a report out this week.
Harris would add $3.5 trillion to the projected fiscal debt through 2035, while Trump would add $7.5 trillion, the Committee for a Responsible Federal Budget analysis said.
“Our large and growing national debt threatens to slow economic growth, boost interest rates and payments, weaken national security, constrain policy choices, and increase the risk of an eventual fiscal crisis,” it added.
If elected for a second term, Trump has pledged to purge the US government of those he deems disloyal to his agenda if reelected and could surround himself with loyalists rather than career officials seeking to check his more impulsive decisions.
Pomeranz said that Trump’s policies in a second term would more openly reflect his admiration for Russia’s leader, regardless of the US’ economic plight.
“Putin is the autocratic leader that Trump most admires,” he said. “Trump will present any end of hostilities [in Ukraine] as a personal victory, and Putin will validate this.”