Publication

This commentary contends that the expected economic policies of the incoming Trump administration may actually benefit the economies of eurozone countries. Trump's plan to implement sweeping tax cuts, subsidize infrastructure investment and increase military spending make it likely that the US will face rapidly rising fiscal deficits and a huge short-term increase in demand, which will then lead to a stronger US Dollar and higher imports. Such a scenario would indeed be good for the export-driven eurozone, as would the new president’s pledge to ensure American energy self-sufficiency, which would help to suppress oil prices for energy-importing countries.