The potential economic and geopolitical impact of a second Trump presidency:  Implications for freelancer recruitment, international trade, tax policies, and military conflicts

A second victory for President-Elect Donald Trump signifies a substantial shift in the United States’ approach to domestic and international policy. Understanding the potential ramifications of this shift involves examining past behaviour, campaign promises and policy intentions. The effects could cascade into various sectors such as freelancer recruitment, international trade, tax policies, and the handling of military conflicts in regions like Ukraine and the Middle East. Additionally, the impacts on trade and recruitment between the UK and the EU should be considered, given their interconnected economic ties with the US.

1. Freelancer recruitment: a shift in global hiring dynamics

One of the hallmark features of the Trump administration’s policies was its “America First” strategy. If reinstated, this approach could have nuanced implications for non-US freelancers. While Trump championed deregulation and corporate tax cuts that spurred domestic growth, his stances on immigration and international labour markets were more complex. For freelancers outside the US, this could translate into:

Tighter visa and work authorisation regulations: Any reinstatement or expansion of policies such as the H-1B visa restrictions could discourage US-based companies from contracting non-US talent. This may result in fewer opportunities for freelancers in developing markets to engage with US firms.

Potential rise in protectionist policies: If Trump pursues policies aimed at bolstering the US workforce at the expense of foreign labour, companies may be incentivised or pressured to hire locally. This would hinder non-US freelancers’ access to lucrative US markets.

However, there may be counter-balancing effects. The increasing shift towards remote work has cemented a trend of global hiring that could persist despite regulatory hurdles. Where US industries need talent most, such as areas of cybersecurity, engineering and artificial intelligence, we could see a more open-minded approach to hiring foreign talent.

However, the application process will undoubtedly become more rigorous following reports of foreign state hackers tapping into the private phone calls and texts of political figures and their family members.

2. International trade: protectionism revisited?

Donald Trump’s trade policies are synonymous with the renegotiation of international agreements and the imposition of tariffs aimed at rebalancing trade deficits. A return to the White House could mean a reapplication or intensification of such measures.

Reports remind us that President Trump has pledged to impose tariffs of 10% to 20% on all imported goods and up to 60% on products made in China. Concurrently, he has vowed to bring manufacturing back to the US, reduce taxes, and deport millions of undocumented immigrants.

While some of these promises may appear drastic, they resonated with many US voters burdened by rising food and housing costs, convincing them that supporting Trump would be in their economic interest. That said, the tough tariffs seen during Trump’s first presidency hit US soya farmers hard as China took its business to other markets.

Many of Trump’s policies could fuel inflation originating in the US, undermining other countries’ borrowing capabilities. There is even talk that another interest rate cut for later this year could be on hold for the US. That could mean the Bank of England could follow suit.

Collectively, these policies “would have particularly negative consequences for Mexico, but also for the eurozone, and closely correlated with it, the Central and Eastern European region,” according to Piotr Matys, senior FX analyst at In Touch Capital Markets, as reported by Bloomberg.

Having Trump back in power could have a huge impact on Australia, too – and the nation’s biggest commodity exports, according to Matthew Durban, a former senior economist and trade commissioner at the Australian Trade and Investment Commission, told Nikkei Asia that a Trump win would be “calamitous” for the Aussie economy, while renowned economist Shane Oliver said we could be on the cusp of a “global trade war.”

Trade agreements and alliances: Trump previously withdrew from multilateral agreements like the Trans-Pacific Partnership (TPP), favouring bilateral deals instead. A similar strategic pivot might limit international trade partnerships, reducing market fluidity and impacting global economies, especially emerging markets that rely heavily on exports.

Implications for UK-EU Trade: The UK and the EU have strong trade ties with the US, both as significant markets and strategic partners. A Trump presidency could introduce shifts in these relationships:

UK-US trade relations: If Trump seeks to strengthen bilateral trade deals, the UK might find itself in a position to renegotiate a more favourable trade agreement with the US, particularly post-Brexit. This could provide economic opportunities but may also come with stipulations that favour US exports, challenging UK industries.

EU-US trade relations: The EU, a significant trading partner for the US, could face heightened tariffs or barriers if Trump’s policies revive trade confrontations similar to those during his first term. This would create economic friction, potentially impacting EU growth and, by extension, UK-EU trade dynamics.

The renewed focus on protectionism could strain the global trade network, with ripple effects reaching non-US freelancers and small businesses reliant on transatlantic economic stability.

3. Impact on recruitment between the US, UK and EU

Trump’s policies could indirectly influence recruitment opportunities between the UK and EU. If stricter US policies on international hiring come into play:

Shift in talent markets: With US companies potentially reducing overseas recruitment due to more stringent policies, the UK and EU could see an increase in opportunities to hire skilled freelancers and professionals who might have otherwise targeted US companies. This shift could strengthen intra-European collaborations and boost regional growth.

Regulatory influence: If a Trump presidency results in stricter labour policies or protectionist stances that slow down US economic growth, it could drive European firms to focus more on local and regional talent pools. This could indirectly benefit recruitment between the UK and EU, fostering more cooperative hiring practices.

4. Tax policies: business incentives and budget deficits

Tax policies under Trump were historically characterised by significant cuts, particularly benefiting corporations and high-income earners. The 2017 Tax Cuts and Jobs Act (TCJA) stands as a primary example of these fiscal strategies. A second term could see similar tax reforms aimed at reducing the burden on businesses to stimulate economic growth.

Impact on international hiring: Lower corporate taxes might encourage US companies to invest more in their domestic operations, potentially limiting the outsourcing of work to freelancers abroad. However, companies aiming for cost-efficiency may still prefer hiring overseas to take advantage of lower wages.

Budget deficits: The TCJA significantly increased the federal deficit. If similar measures are reintroduced without corresponding spending cuts or revenue-raising measures, it could lead to broader economic consequences. An escalating deficit might necessitate later fiscal tightening, potentially affecting government programmes that support global entrepreneurship initiatives.

5. Military conflicts: Ukraine and the Middle East

Trump’s foreign policy stance is often marked by a strategic pragmatism aimed at reducing direct military involvement while exerting influence through economic or diplomatic means.

Several Eastern European nations and international military personnel serving in Europe are undoubtedly concerned that Trump could weaken or even compromise the United States’ critical support for NATO. This apprehension, combined with uncertainty over the future of the war in Ukraine and the associated financial burden, has contributed to a decline in various Eastern European currencies, including the Hungarian forint.

Ukraine: Trump’s stance on Ukraine has historically leaned towards a more restrained US role. While he approved arms sales to Ukraine during his presidency, he also faced criticism for appearing hesitant to support Ukraine unconditionally. To placate Trump, Europe might be compelled to increase its defence spending overall, with a particular focus on supporting Ukraine.

A potential second term could signal a shift towards less direct support, possibly altering the geopolitical balance and influencing the European Union’s approach to the conflict. This could lead to a ripple effect on global markets, energy prices, and investment flows.

In his sole debate with U.S. Vice President Kamala Harris, the Democratic Party’s nominee, on September 10, former President Donald Trump avoided expressing support for a Ukrainian victory.

“I think it’s in the U.S.’s best interest to get this war finished and just get it done, negotiate a deal,” Trump stated.

The Spokesperson at the Kremlin Dmitry Peskov responded to journalist requests as to why Vladimir Putin had yet to congratulate President-Elect Donald Trump. “Let’s not forget that we’re talking about an unfriendly country that’s both directly and indirectly involved in a war against our nation,” said Peskov, it was reported.

Peskov said: “Since the United States fuels and participates in this conflict, then yes the United States is capable of changing the trajectory of this foreign policy,” referring to the ongoing war in Ukraine. “Whether it will be done and how it will be done, you and I will see after [Trump’s inauguration in] January.”

The Middle East: Trump’s tenure saw the US brokering peace deals through the Abraham Accords, fostering diplomatic ties between Israel and various Arab states. Some US-based professors question the success of the accords, which President Trump claims to his credit.

The repercussions of an ongoing and spreading conflict in the Middle East could have global economic implications, from oil prices that affect global inflation to shifts in international investment and stability that impact freelance economies and cross-border business activities. How Trump aligns his economic interests to those of highly contentious conflicts, such as those between Israel, Gaza, Lebanon and Iran could have lasting implications on world security.

What to expect next

Overall, a second Trump presidency could reshape global economic and geopolitical landscapes through a blend of protectionist trade policies, deregulatory tax measures, and strategic shifts in military involvement.

• For non-US freelancers, this could mean more restrictive access to the US market, driven by a potential resurgence in isolationist policies. On a larger scale, international trade would likely face new challenges, influencing global supply chains and economic partnerships.
• The UK and EU, as major trading partners of the US, could be affected by potential shifts in trade policy, either through enhanced bilateral agreements or new trade barriers.
• Tax policies would bolster certain sectors while exacerbating federal budget deficits, and military policy could see shifts with complex outcomes for regions like Ukraine and the Middle East.
• The global community would need to brace for changes marked by a complex interplay of nationalism and strategic alliances, which would significantly influence economic stability, international labour markets, and geopolitical power balances.