Recent shifts in US leadership have demonstrated that policy changes – especially in tariff, taxation, trade, climate regulations and monetary policies – can have far-reaching effects across the global economy, according to the International Chamber of Commerce-Bangladesh’s editorial of Jan-March news bulletin released on Tuesday.
A protectionist approach, notably during Trump’s presidency, strained US trade relations with China, Canada and the European Union, triggering market volatility and economic slowdowns in trade-dependent nations.
Additionally, US monetary policy under various administrations plays a crucial role in global economies. The US Federal Reserve’s interest rate decisions influence global inflation and capital flows. When rates rise to curb domestic inflation, investors shift funds to the US, causing capital outflows, currency depreciation, and economic instability in developing countries, according to the ICCB report.
The Biden administration focused on renewable energy created economic uncertainties for fossil fuel-exporting nations like those in the Middle East and Russia, as global demand for oil and gas faced potential declines. In contrast, the Trump administration supporting fossil fuels benefited these nations by sustaining demand for their exports. This divergence in policies influenced global energy markets. As a result, energy-dependent economies had to adapt their strategies based on shifting US priorities.
The US’ foreign policy under different administration plays a crucial role in global economic stability. Conflicts in regions such as the Middle East, Eastern Europe and Asia are often shaped by US diplomatic actions. Sanctions, military interventions and peace agreements directly influence international markets, the editorial read.