Markets react unkindly to a Trump presidency

As the likelihood of a Trump presidency became more likely during the night, global markets began to plummet. This is because his pledges to add huge tariffs to Chinese imports and renegotiate long-standing trade deals have made him unpopular with investors and economists.

The South Korean won plummeted. Trump has criticized free trade deals President Obama made with the country and they are heavily reliant on the US as an export market. He has also threatened to withdraw the 28,000 US troops stationed there unless Seoul pays for them.

The other currency which fell drastically was the Mexican peso. Some used the currency as a poll for a Clinton victory because of Trump’s pledges to “build a wall” along the southern border. The peso strengthened in the past day but fell by nearly 10% when Trump’s chances improved.
How will Trump’s pledges to rescind trade deals impact the labor market? L. Alan Winters has written about reducing trade barriers in his article on Trade regulation and job creation. He says, “While the immediate effect of reducing trade barriers tends to be a rise in unemployment, the longer term sees the reversal of this rise and an eventual decline in unemployment.”

Related articles:
International trade regulation and job creation, by L. Alan Winters
How does trade liberalization affect the performance of firms? by Joachim Wagner
More articles on how trade policy affects the labor market.