How will the economy transform under President Donald Trump's second term?

DNHN - Donald Trump's official election as President for a second term has a positive impact on the US economy as well as bringing prosperity to the world economy.

The Economic Clock (a reliable economic indicator created by British scholars in the late 1950s) is divided into four time zones corresponding to the four seasons of the economy. Time zones 1-2-3 (Fall), time zones 4-5-6 (Winter), time zones 7-8-9 (Spring), and time zones 10-11-12 (Summer). These time zones also align with the four stages of the Circle of the Universe: Decay = Fall = Slow Down, Destruction = Winter = Recession, Formation = Spring = Recovery, and Continuation = Summer = Boom.

Recently, the global economy, including Vietnam, has experienced a Winter phase marked by significant downturns: high inflation and rising interest rates. Commodity prices and corporate profits have decreased substantially, with many businesses facing difficulties or bankruptcy and unemployment levels rising. Governments have implemented tight monetary policies and reduced foreign exchange reserves. Stock and real estate markets have hit rock bottom, investor confidence is low, and many are choosing to stay on the sidelines.

The Economic Clock (Source: Royal London)

With decisive policies aimed at revitalizing the U.S. economy and restoring its global influence, ending wars in Europe and the Middle East, the official re-election of Donald Trump as President for a second term has had a positive impact on the U.S. economy and global economic prospects. This is evidenced by significant stock market gains, a strengthening USD, and a continued rise in gold prices.

Notably, in his second term, Donald Trump has shown support for recognizing Bitcoin and committed to making the U.S. the capital of cryptocurrency. He also plans to establish a national Bitcoin reserve. This has fueled optimism among cryptocurrency investors, who anticipate a more open regulatory environment, driving the value of major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). Following his electoral victory, Bitcoin reached a new record high, at one point trading at $99,600 per BTC, nearly touching the $100,000 mark predicted by analysts.

According to the Asian Development Bank (ADB), Vietnam's economic growth outlook remains positive, with GDP projected to grow by 6% in 2024 and 6.2% in 2025. Inflation is expected to stabilize at 4% for both years. Furthermore, in its mid-October 2024 economic update, Standard Chartered raised Vietnam's 2024 GDP growth forecast from 6% to 6.8%. Inflation has slowed recently, with forecasts for 2024 and 2025 remaining at 3.7% and 3.8%, respectively. The Vietnamese government aims for GDP growth of 6.5-7%, striving for even higher growth rates (7-7.5%) to rank 31-33 globally in GDP size by the end of 2025.

Benner Cycle Analysis: Many investors and professional financial traders regard the Benner Cycle as a prophetic guide for financial markets, as past global recessions and crises have coincided with its predictions. According to the Benner Cycle, the global and Vietnamese economies have reached a low point from the peak years of 2018-2019 to the bottom years of 2023-2024. Starting in 2025, recovery and growth are expected to peak in 2026. Following this, the cycle predicts a decline from 2027 to 2032.

Thus, with Donald Trump’s re-election as the 47th President of the United States and his policies aimed at ensuring U.S. prosperity and global peace, investors anticipate an economic recovery. The economy is expected to enter a Spring phase, corresponding to a recovery period after hitting rock bottom, marked by renewed growth and falling interest rates. Commodity prices and corporate profits are projected to improve, unemployment rates to decline, and stock and real estate markets to rebound. Investor confidence is likely to return, spurring active market participation.

For Vietnam, the global economic growth outlook for 2025 offers both opportunities and challenges. The Vietnamese government’s confidence in achieving GDP growth of 6.5-7% and striving for even higher rates (7-7.5%) to rank 31-33 globally by the end of 2025 is a highly positive signal. However, Vietnam may face challenges from the global economic context, including potential monetary tightening in the U.S., which could pressure exchange rates and capital flows into Vietnam. Hence, the Vietnamese government must adopt flexible monetary policies in alignment with U.S. monetary policies, accelerate structural reforms, enhance competitiveness, leverage international integration opportunities to attract foreign investment, and embrace digital technology and green industries to ensure sustainable economic development.

Dr. Louis Nam Tran (from the United States)