From Beijing and Tehran to Brussels and London, and further away to Mexico City and Caracas the night of 8 November will create a landmark in contemporary world history. The results of the US election and the new occupant of the White House in Washington D.C will certainly affect the way the world turns around. The poll differences between the two contestants, the Democrat Hillary Clinton and the Republican Donald Trump are so vast that analysts have given up following them, they just watch the exchange of fire.
The world is bewildered with what is happening in the US. Governments, major political parties and global entities, know that the results of the American Presidential race, like it or not, will have effects on every global issue, economic or political. That’s why directly or indirectly almost all the major political forces and countries have sided with Trump or Clinton, or at least they have made clear which of the two would be better for their own interests.
Who backs whom?
For one thing, the Russian President Vladimir Putin has taciturnly left to be known, that under Hillary he expects that the US will be even more aggressive to his country and to him personally, so he prefers Trump to win. In Beijing, the usually very restricted and cautious leadership of the vast country is seen as favoring Clinton. This is the case because Trump has been hostile to China, accusing her of founding its economic growth on millions of lost US jobs. Only lately he said that China can destroy the US just by devaluing its currency.
The Europeans have more reasons to support Hillary though. For one thing, Trump has accused them that they count on the US military spending for their security. He reiterates that America is spending too much on the NATO alliance, thus undermining his country’s fiscal stability. Understandably, a Trump administration will ask the Europeans to search deep in their pockets for NATO’s needs.
What the Europeans need
This week Brussels found one more reason to prefer Clinton to Trump, because she appears more positive vis-à-vis the Transatlantic Trade and Investment Partnership (TTIP), the mammoth free trade agreement that the US and EU have been negotiating for at least three years, without success. Negotiations were supposed to have been completed by the end of 2014, but it’s not clear if an accord can be reached earlier that 2019. In any case, if Trump gets the top US job, TTIP will certainly be shelved for good.
Europe has one more important reason to prefer Clinton. The Democrat candidate is regarded as much better disposed to ease the economic relations of the West with Iran. Europe is too eager to see the US lift the severe trade sanctions on this nation of 78 million people, ready to consume whatever the EU has to offer. What is more important, Iran has the money to pay well for European goodies, thanks to the country’s large oil reserves and the bulky exports. Europe is quite ready to penetrate the Iranian market because of the traditional relations with the country. Germany and France are leaders in this respect.
Even Greece hopes to gain from the lifting of the Western trade sanctions on Iran. Last week, Athens vetoed a US – EU blockade on the largest Iranian lender, the Saderat Bank. For a decade now the bank was not allowed to deal with the western financial structures, because of anti-terror concerns. The truth is that many other EU member states would have wished to have an open road to Tehran through the Saderat Bank. It seems that, in this case, Athens is doing the dirty work for many other capitals. Obviously, the EU wants to make sure before the 8 November that the road to Tehran can be opened widely at any moment, whatever the outcome of the US election might be.
The financial sharks support Clinton
The same is true for the New York financial hub, spearheaded by the Wall Street Stock Exchange. The giant US financial industry wants to keep the bridges open whoever gets the top Washington job. The giant banks though and the bourse itself have long ago shown their preferences for Hillary. New York bankers have spent hundreds of millions of dollars in support of her campaign.
Understandably then, during the few weeks ahead of the 8 November election and more characteristically in the past few days, the stock market goes up and down according to what the pollsters say. The stocks move up when Hillary leads and tumble when Trump heads the race as it is happening this week. It was very interesting to see last week Wall Street suddenly taking the descent, after the FBI announced that more Hillary e-mails on her private database when she headed the State Department will be scrutinised. As if this was not enough, last Tuesday, the FBI released 129 pages of documents about the 2001 investigation against Bill Clinton. In this affair, Bill Clinton, on his last day in the White House, pardoned a hedge fund tycoon, accused of tax evasion.
The FBI turned the tide
The latest revelations by FBI have turned currently the tide against Clinton. This week for the first time Trump was found in polls to lead by 1%. In this way, Trump is back in the race, with full potential still to win. The financial markets have already shown what may happen in such a case. The dollar and the New York stock market will lose ground, at least during the first weeks following a Trump victory. This fall will be followed by all the financial markets of the world. Stocks and bonds alike will shed some of their value, and practically all financial assets will be devalued to some extent, of course at the exception of gold. The precious metals, the standard safe haven of value, will again become investors’ best option.
All in all, after 8 November the world may not look like it is now. Whatever the outcome of the election might be, either with Clinton or Trump, the US will be a different place, probably more unpredictable and dangerous in the interior and also more aggressive in its relations with the rest of the world. This is obvious if the winner is Trump, but a Clinton win will have severe effects as well. Hillary has repeatedly threatened nuclear power Russia with unprecedented force.
In any case, this Presidential campaign has divided the US so deeply, that the two sides will need much time to balance. In the meantime a lot of extraordinary events may take place.