Trump’s Presidency: Implications For Nigeria And Emerging Markets

President Elect, Donald Trump’s decisive victory in the 2024 U.S. presidential election signals a significant shift in U.S. domestic and foreign policy, with profound impli­cations for the global economy.

His administration is expected to pri­oritise protectionist trade policies, en­ergy independence, and a reassessment of international alliances, potentially disrupting global supply chains and re­shaping trade dynamics.

For emerging markets, these chang­es could lead to heightened uncertain­ty, particularly for economies heavily reliant on exports to the U.S. or those integrated into global supply chains.

Stricter immigration policies and adjustments to foreign aid may also im­pact remittance flows and development funding, critical lifelines for many de­veloping nations.

Key Cabinet Appointments Under Trump’s Presidency

Donald Trump’s proposed cabinet showcases individuals with a mix of conservative, business-oriented, and nationalist ideologies, reflecting his ad­ministration’s policy priorities. Below are some critical appointments likely to shape global economic and political dynamics.

Marco Rubio (Secretary of State):

Expected to spearhead foreign policy, focusing on bilateral agreements and reshaping international alliances

Scott Bessent (Treasury Secre­tary):

Tasked with overseeing fiscal policy. His decisions could impact capital flows, exchange rates, and global investment patterns

Chris Wright (Energy Secretary):

His role in shaping U.S. energy poli­cy could disrupt global energy markets, with significant implications for oil-de­pendent economies like Nigeria.

Robert F. Kennedy Jr. (Health Sec­retary):

His approach to global health initia­tives will determine the U.S. commit­ment to combating diseases and sup­porting healthcare in emerging markets.

• Tulsi Gabbard (Director of National Intelligence):

Her leadership may signal a change in US approach to global security issues, potentially influencing U.S. defense ties with emerging markets.

Number of Trump’s policies that will affect emerging markets

Based on Mr. Trump’s pronounce­ments and cabinet selections, several policies under his presidency will sig­nificantly impact emerging markets, which are often shaped by factors such as global trade, foreign relations, energy policies, technological advancements, and labor market dynamics.

1. A Strong Dollar:

The coming of Trump government brings a clear probability of a stronger dollar.

A strong dollar and higher interest rates could increase debt burdens, fuel inflation, slow economic growth, and re­direct foreign direct and portfolio invest­ments back to the U.S., from emerging markets. U.S. fiscal policies influence global investment flows, particularly into emerging markets.

A tightening of monetary policy or higher interest rates in the U.S. could trigger capital outflows from emerging markets, leading to currency deprecia­tion and inflation.

Conversely, policies promoting for­eign direct investment (FDI) might in­crease U.S. investments in developing economies.

2. Protectionist Trade and Commerce Stance:

Trade policies directly affect emerg­ing markets that rely on exports to the U.S., such as textiles from Bangladesh, electronics from China, and agriculture from Africa.

A protectionist stance, including increased tariffs or quotas, could hurt these economies, while trade deals that favor U.S. goods might create uneven competition.

However countries willing to nego­tiate could secure advantageous trade deals, driving growth in specific indus­tries.

3. Foreign Relations and Diplomacy:

Trump’s foreign relations policy would likely focus on bilateral trade agreements and renegotiating terms with countries in Asia, Africa, and Lat­in America.

Emerging markets often depend on access to U.S. markets for exports, and changes in tariffs, trade quotas, or sanc­tions could disrupt their economies. For example, stricter trade policies could re­duce export revenues in countries like Mexico, Vietnam, and Nigeria.

4. National Defense and Global Secu­rity:

Defense policies could affect emerg­ing markets by influencing geopolitical stability. For instance, U.S. military presence or support in regions like the Middle East or South Asia could either bolster economic activity by foster­ing security or destabilise economies through conflict.

Furthermore, emerging markets with military ties to the U.S. might benefit from defense aid or technology sharing.

A resolution of the Russia/Ukraine conflict is also a possibility with the at­tendant improvement in food produc­tion from that region.

5. Immigration and Border Security:

Stricter immigration policies could impact remittance flows, which are a lifeline for many emerging market econ­omies. Countries such as Mexico, India, Nigeria and the Philippines depend heavily on remittances from workers in the U.S. If immigration laws are tight­ened, the inflow of foreign currency to these markets may decline, affecting household incomes and local economies

6. Energy Independence and Renew­ables:

Trump’s energy policies, focusing on strengthening fossil fuel expansion and reduced environmental regulations, would likely disrupt global energy mar­kets.

For emerging markets dependent on oil and gas exports, such as Nigeria, Venezuela, and Angola, an increase in U.S. production could drive down global oil prices, reducing export revenues.

Conversely, less emphasis on renew­ables could slow down green invest­ments in emerging markets.

Conclusion

Donald Trump’s return to the presi­dency brings both challenges and oppor­tunities for Nigeria and other emerging markets.

His administration’s focus on pro­tectionism, energy independence, and reshaped international relations will likely create headwinds for tradede­pendent economies and those reliant on remittances or foreign aid.

For Nigeria, a significant oil exporter, U.S. energy policies prioritising domes­tic production may suppress global oil prices, squeezing revenues.

Stricter immigration policies could also reduce remittance inflows, impact­ing household incomes and economic stability. However, there are opportuni­ties to deepen bilateral trade ties and at­tract foreign direct investments through strategic policy alignment and proactive diplomacy.

To navigate this complex landscape, Nigeria must diversify its economy and strengthen trade relations with alterna­tive markets, including China.

There is also a need for policymakers to focus on fostering technological inno­vation and building resilience against external shocks.

By adapting strategically, Nigeria can mitigate risks and capitalize on emerg­ing opportunities in the evolving global order under Trump’s presidency

• Akanni Akindele, Financial Expert, Writes for WQER