Qatar National Bank Analyzes Potential Economic Shifts Under Second Trump Presidency

Qatar National Bank (QNB) has projected significant shifts in the U.S. economic policy if Donald Trump assumes a second term, identifying potential changes in finance, trade, and immigration as focal areas. In a detailed analysis, QNB discussed how Trump’s “America First” approach could alter the global economic landscape, given the U.S.’s extensive market size and influence.

In its weekly commentary, QNB highlighted that U.S. domestic policies are likely to have a substantial global impact, with the U.S. economy’s size and structure benefiting international markets through its established financial systems and regulatory frameworks. “With an expected nominal GDP of $29.2 trillion in 2024, out of a global total of $110.1 trillion, the U.S. economy operates at a scale unmatched by other powers,” QNB stated, emphasizing the far-reaching effects of U.S. policy decisions.

QNB noted that Trump’s platform, centered on “Make America Great Again” and “America First,” advocates for a pro-business and pro-manufacturing stance, likely driving deregulation, tax cuts, public investments in defense, and trade protectionism. According to the report, this approach is aimed at bolstering domestic industries while reducing regulatory constraints across sectors.

Regarding fiscal policy, QNB predicts Trump may reintroduce measures from his first term, including corporate tax cuts. The report suggests that Trump’s proposal to reduce corporate taxes from 21% to 15%, alongside individual tax cuts set to expire in 2025, could cost the government $3 trillion to $4 trillion in revenue. To counterbalance this, Trump has proposed an efficiency-focused government spending plan potentially led by entrepreneur Elon Musk. Should this plan succeed, QNB believes it could drive private sector growth through increased investment and consumption, without adding excessive strain on government finances.

Trade is expected to remain a contentious area under Trump, with potential tariff hikes aimed at protecting U.S. industries. Trump has floated imposing a 10% minimum tariff on imports and a 60% tariff on Chinese goods, which could lead to trade disputes and retaliatory actions from other countries. According to QNB, Trump’s aggressive trade stance may be a negotiating tactic designed to secure concessions from the European Union and China, potentially spurring foreign investment and bolstering the U.S. manufacturing sector.

On immigration, Trump’s campaign rhetoric called for mass deportations and tighter visa regulations. However, QNB believes that, in practice, a second Trump term would see more moderate reforms. The analysis forecasts targeted deportations and stricter visa screening rather than sweeping immigration restrictions, allowing for continued labor growth in critical sectors like services, which rely on immigrant labor.

QNB concluded that while Trump’s policies could significantly impact U.S. fiscal, trade, and immigration frameworks, his proposed agenda may ultimately be less extreme than campaign promises suggest. “Taken together, the proposed agenda should be less radical than campaign promises suggest,” QNB remarked, adding that U.S. economic growth is expected to maintain an annual rate of 2.5% to 3% under such a policy trajectory.