The U.S. Presidential Election and the Global Economy

The fluctuations, varying from mild to severe, in markets around the world, from stocks to gold, showcase the concerns and confusion of international financial circles ahead of the U.S. presidential election on November 8. Investors and traders are naturally risk-averse and fear the ambiguity and risks associated with unexpected events. If the U.S. sneezes... Given the process of globalization and the obvious and hidden ties between national economies, the emergence of an uncertain atmosphere even in developing countries frightens investors, let alone the questions raised today regarding political developments in the world's leading economic power. While awaiting clarity, many financial market players have turned away from high-risk assets and sought refuge in 'safe haven' values, especially gold. Legislators who ratified the U.S. Constitution in Philadelphia in September 1787 could never have imagined that their small country would one day become a major power influencing global politics and economics. In this sense, the future guest of the White House in Washington, whether we like it or not, holds the reins of many events in other countries of the world, without the people of those countries having a role in electing him as president or the ability to influence his decisions. Let us not forget that the security of a large part of Europe, from the shores of the Atlantic Ocean to the borders of the former Soviet Union, is under the control of the North Atlantic Treaty Organization (NATO), which is commanded by the U.S. Also, the security of the world's most important trade route in the South China Sea, which is a passage for a significant portion of goods, is provided by the U.S. Seventh Fleet. The European economy is also closely linked to the economy across the Atlantic, and it is famously said that if the U.S. sneezes, Europe immediately catches a cold. In this situation, the U.S. president also takes on a role akin to the presidency of Europe, partly because no European country can intervene militarily in other parts of the world without the green light from the U.S. and its logistical support. European stock markets also tend to follow the trends of American exchanges on most days. However, the most significant factor contributing to America's global economic power is its market. This country imports three trillion dollars worth of goods and services every year. In other words, thousands of manufacturing firms and tens of millions of jobs outside the U.S. depend on this country's market, and due to this dependency, they are closely linked to the U.S. dollar and its monetary and financial policies. There is no reputable firm or bank in the world that does not have a relationship with the U.S. market. Today and tomorrow, the factors mentioned form the foundations of America's economic authority on a global scale. These foundations are certainly not unshakeable, simply because no power can harbor dreams of 'eternity.' New powers in the world are emerging one after another, creativity and innovation in other countries are on the rise, and the emergence of new markets is one of the very important phenomena in international life. The U.S. dollar, like the market and technology of this country, will face very serious challenges in the not-too-distant future. But today is different from tomorrow, and an active economic diplomacy, if it wants to serve national interests, must consider today and align its behavior regarding the United States with current necessities. This does not mean ignoring future trends. Currently, it seems that a large part of the American financial circles desires the victory of Hillary Clinton, but at the same time prefers that the majority in the U.S. Congress be held by Republicans. In Europe and Asia, economic circles also clearly show a preference for Hillary Clinton's victory due to fears of America's isolationist policies. The man or woman who emerges victorious from the U.S. election on November 8 will lead this great economic power. Overall, it seems that the personality and discourse of Donald Trump, which fundamentally differ from the traditional foundations of the Republican Party, face skepticism from American economic circles. A deep belief in the market and its mechanisms and a comprehensive defense of free trade and exchange have always been at the forefront of the American Republican electoral charter. Mr. Trump has distanced himself from these principles and has adopted a completely different stance, especially regarding free trade at the international level. In this context, he has described the North American Free Trade Agreement (NAFTA) and the World Trade Organization as disastrous for his country and has promised to withdraw the U.S. from such institutions. Thus, the Republican candidate who has a serious chance (more or less at the level of his Democratic rival) of entering the White House in Washington promises to shift the world's most powerful nation towards an isolationist policy by questioning the foundations of the global order (including NATO and the World Trade Organization), which naturally worries economic circles both in America and around the world. The important question is: will Donald Trump's election as President of the United States also materialize like 'Brexit' (Britain's exit from the European Union)? Currently, it seems that a large part of the American financial circles desires Hillary Clinton's victory, but at the same time prefers that the majority in the U.S. Congress be held by Republicans. In Europe and Asia, economic circles also clearly show a preference for Hillary Clinton's victory due to fears of America's isolationist policies. However, beyond the personality of either candidate and their programs, what keeps the U.S. safe from unpredictable shocks and tensions is the institutions that the founders of this country enshrined in the Constitution. The U.S. president, whoever he may be, is restrained by Congress, the Supreme Court, and the powers delegated to each state against the federal government.