What happens next? I’ve now been asked that question at least a half dozen times over the last week.
Just over the weekend, in general conversation a friend said to me, ‘So how about Trump? I didn’t think things could get more backwards than Brexit and then this happens. What the [expletive] happens next?’
What does happen next? We might be labouring on the Trump issue a touch, but you need to understand the ramifications in play here. It’s going to have an impact on everything from global trade to immigration and military action.
It will have direct impact on Australia, Australia’s trade, commodity prices, environmental concerns and military. It will impact interest rates, the dollar, and of course stock markets. It will impact industry, both public and private companies and their opportunities in the future.
In short it impacts a lot of things. But we also mustn’t forget that it’s a big world. Trump may influence all of it, for now, but there’s plenty of world outside the US.
The worst guy to have at the EPA
We all hope is that Trump is going to do a good job. We hope that he tones it down. We hope he doesn’t build a wall. We hope he made grave errors in his misogynist and racially discriminatory policy decision in the lead up to last week’s election.
Chances are, however, that he’s not going to tone everything down.
I’m not saying Hillary Clinton would have been any better by the way. In fact, she could have been just as bad. Perhaps the best outcome would have been a non-event and they just put it all off for another four years.
Perhaps the best outcome is complete and utter anarchy. The downfall of government completely, and a chance to let the people coordinate how their country is run in the future, using new technology platforms.
While that might sound silly, I think that’s the more likely scenario as we move into ‘Trump World’. While I hope he’s an amazing President, my instinct tells me he won’t be. And he while he might be anti-establishment, he might also inadvertently be the downfall of government completely.
But this idea of ‘crowd-sourced’ government is something that will take decades to play out. This might be the spark that fires it up, but it will take far more time than a Trump Presidency to see out its long term potential.
That leaves us with the sticky fact that we’ll likely have Trump for four years. Unless things go pear shaped on 19 December (see yesterday’s Money Morning), Trump World is here.
And where does that leave us? What happens next?
Well, here’s a snippet of what you can expect. One of Trump’s key administration positions is likely going to a man by the name of Myron Ebell. Remember this name, because it’s one that you’re going to come to hate.
Myron Ebell is probably going to get the job leading Trump’s Environmental Protection Agency (EPA) transition team.
This is a crushing blow for the future of green technologies in the US. Why? Well, Ebell is a renowned climate change sceptic. Scientific American lists some of Ebell’s career highlights,
‘In a biography submitted when he testified before Congress, he listed among his recognitions that he had been featured in a Greenpeace “Field Guide to Climate Criminals,” dubbed a “misleader” on global warming by Rolling Stone and was the subject of a motion to censure in the British House of Commons after Ebell criticized the United Kingdom’s chief scientific adviser for his views on global warming.
‘More recently, Ebell has called the Obama administration’s Clean Power Plan for greenhouse gases illegal and said that Obama joining the Paris climate treaty “is clearly an unconstitutional usurpation of the Senate’s authority.’
The New York Times backed this up by reporting,
‘Mr. Ebell has said that “a lot of third-, fourth- and fifth-rate scientists have gotten a long ways” by embracing climate change. He frequently mocks climate leaders like Al Gore, and has called the movement the “forces of darkness” because “they want to turn off the lights all over the world.”
‘No one, it seems, is immune to his criticism. He called Pope Francis’s encyclical on climate change, issued in mid-2015, “scientifically ill informed, economically illiterate, intellectually incoherent and morally obtuse.”
‘“It is also theologically suspect, and large parts of it are leftist drivel,” he added.’
What this spells out is the almost certainty that anything President Obama put in place to combat climate change will be unwound. It seems Mr. Ebell isn’t a great supporter of fact, but merely a conduit for the distribution of Trump’s fiction.
Are carmakers in trouble? Or is this an opportunity in disguise?
This could also spell a bit of trouble for certain carmakers. Tesla Motors [NASDAQ:TSLA] for example might find that any subsidies for electric vehicles (EVs) disappear quickly. That would make them more expensive than they already are.
In fact it could mean great difficulty for all car makers. There isn’t a single car company in the world right now that isn’t working on cleaner, greener technology. There are of course EV makers like Tesla, GM or Porsche. And hydrogen focused companies like Honda, Hyundai and Toyota.
And then there’s Jaguar. Today they released an all new SUV, the I-Pace. It’s an all-electric SUV designed to take on Tesla’s Model X SUV. The problem is, with Trump World and Ebell, it couldn’t be a worse time to release an all-electric car to the US market.
Trump World could be the worst thing that ever happened to EVs in the US market.
But not all hope is lost!
While the US market might turn in on itself thank to Trump World, the good news is the US is just one part of a much bigger world.
Yes. Let’s not forget, while the US is a huge market, it’s not the only one. As of 2010 there were around 4.2 billion people living in the Asia Pacific region. Then there’s another 743 million in Europe. And of course 1.22 billion in Africa. In other words, there are a lot of other markets in the world.
And if we turn to a place like China, there’s still plenty of demand and spending going on there to counterbalance Trump World in the US. Just because Trump is going to unwind Obama’s climate change programs doesn’t mean Xi Jinping and China are about to follow.
They’re still going all-in on a cleaner and greener China. Forbes reports,
‘The good news is that China will stick with its pledge to peak greenhouse gas emissions by 2030 or sooner, according to Chen Zhihua of the NDRC, China’s Chief Climate Negotiator.’
Phew! That means Jaguar, Tesla, GM and the rest have less to worry about. Furthermore SUV sales in China are up over 40% year on year. Vehicle production is up close to 20% year on year.
That means Chinese are buying up cars like there’s no tomorrow. In a country with 1.3 billion people spending money on cars, and a strong climate change policy — well it looks like the future is still bright for EVs in ‘Jinping Land’, even if it’s not so bright in ‘Trump World’.
Editor’s note: After a brief hiatus, Callum Newman is back in action with his podcast The Newman Show. Tune in now to hear the latest on how you can ‘win the wealth game’ with entrepreneur Mark Robinson. Guests on The Newman Show include the biggest names in international finance. There’s hedge fund legend Jim Rogers, Currency Wars author Jim Rickards, and trend forecaster Gerald Celente. It’s all yours, for FREE. Check it out on iTunes here or Stitcher here.