Last week, a poll from the US election race sent the global markets into a state of panic. The ABC/Washington Post poll placed Donald Trump a single point ahead of Hillary Clinton in the wake of the renewed email scandal, sparking fresh warnings from investors that a win for the Republican candidate could be bigger than Brexit, news.com.au reported.
The day after the poll was released, more than $18 billion was wiped off the value of Australian stocks - a sign investors were beginning to rethink their long-held bets for a November 8 victory for the Democratic candidate. "A Trump presidency would bring about the biggest changes in many decades in existing US arrangements on everything from taxation policy, to trade policy, social spending, immigration and geopolitics," Westpac's strategists in Australia warned in a note for investors. "We believe a Trump win has larger long-term global ramifications than Brexit." The exact global consequences of leading the world's powerhouse are difficult to predict for either candidate, but here's what we can expect. WHICH CANDIDATE IS A BIGGER CONCERN?
Donald Trump is renowned for being wildly inconsistent, meaning we may not know exactly what would happen under his presidency until it happened. But recent economic modelling by the Peterson Institute for International Economics found Trump's trade policies would wreak havoc on the global economy. They said millions of jobs, billions of dollars worth of trade and the stability of the global financial system could be at risk. "Trump's sweeping proposals on international trade, if implemented, could unleash a trade war that would plunge the US economy into recession and cost more than 4 million private sector American jobs," the report states. The US-based think tank's executive vice president Marcus Noland said the US is on the "cusp" of a decision that could turn the clock back 80 years and drive a stake through the heart of global business meccas such as Silicon Valley and Wall Street. "Manufacturing, engineering, aerospace, retail and hospitality industries could also be affected, as could overseas markets like Australia who rely on a stable international system," he said. "If the US is essentially acting as a bully and a rogue and starting trade wars with China and Mexico, that's bad for everyone," Mr Noland said one week before the US takes to the polls. "It's bad for the whole system. There's going to be much higher levels of uncertainty, significant financial market turbulence and so on. That's not good for Australia." One of the major global concerns of a Hillary Clinton presidency, meanwhile, is her perpetual willingness to engage in battle. Tom Switzer, a research associate at the United States Studies Centre, told news.com.au this "hawkishness" is a major grievance for a lot of people in the United States right now. "Clinton has more in common with George W Bush than she does with Donald Trump or Bernie Sanders," said Mr Switzer. "She's never known a war she hasn't supported. Iraq, Afghanistan, Libya, Syria. She wanted to bring down Assad. She's a hawk. She's up there with Bush and Blair, almost." Switzer warned this same world view could apply to the Asia-Pacific region, which in turn would affect Australia as well. "My sense is the Canberra establishment is rooting for Hillary Clinton. They see it as normal programming will resume, the United States will start to be an international benign force of good in the Asia-Pacific, and that is in our interests. "But there are risks with that strategy. She's more hawkish than Obama, and certainly moreso than Trump. She may escalate freedom-of-navigation controls in the South China Sea, and put Australia under pressure to do the same thing, which Turnbull and Shorten don't want to do.
"The conventional wisdom is that Clinton would be good for America's alliance with Australia, but it could also create more expectations for Australia to do more in Asia and the Middle East. I'm not sure that's where Australia is right now." China's not the only problem. Switzer warned her plans for a no-fly zone in Syria could provoke conflict between the United States and Russia. "She's a Russiaphobe," he said. "She wants to have a war with Russia. She wants to support a no-fly zone in Syria which means American planes will be shooting Russian planes to dominate the Syrian sky. Trump says that could lead to World War III, which is true! "Hillary's the interventionist on foreign policy, whereas Trump - all things considered - is less interventionist and more concerned about how much America's throwing its weight in the world. That's appealing to war-weary people who are sick and tired of seeing America lose these wars in the Middle East." While some of Trump's suggested plans - such as imposing a 45 per cent tariff on Chinese goods - do potentially pose problems for Australia, Switzer said he deserved praise for his handling of Russia.
"Washington's worked itself up into a state of Russiaphobia," he said. "They've treated Putin as the next Adolf Hitler - it's absolute nonsense. Russia's conduct has been defensive, and reactive to policies. Trump, for all his flaws, has recognised that Russia has legitimate strategic sensibilities in his own backyard." Despite all this, Switzer says global issues are hardly the main concern here. "I think the global outlook is pretty benign," he said. "I don't think Russia or China pose - at this stage - security threats to the United States, nor do I think Islamic State is an existential threat. "The biggest challenge the United States faces, in terms of national security and foreign policy issues - is that one-mile space between 1600 Pennsylvania Avenue and the Capitol Building." In other words, the internal US government is more problematic than anything going on in the rest of the world. "The dysfunction, the polarisation in Washington, that is America's greatest threat on a national security level. America's biggest problem is internal. It's a very divided country, and it's going to be even more divided under whoever's President over the next four years." WHO'S MORE LIKELY TO WIN?
While we won't know until November 8, Switzer said the general consensus among researchers is still that Clinton will win the election. But he acknowledged what a surprise it's been that Trump has made it this far. "What looked like a landslide win almost a week ago is now very narrow," he said. "But we shouldn't place too much emphasis on national polls that show a dead heat or a slight Trump victory. "The US candidate in the White House needs to win 270 electoral college votes. The electoral mass is a lot more difficult for Trump than it is for Clinton. He needs to win all of the 206 electoral college votes that Mitt Romney won, including North Carolina - where he's presently behind Clinton - but he also needs to win the states that Obama won in 2012. "And even then, he's still about 11 points shy of the 270. That's not to say he can't win - he still can - but we've just got to put these polls in a broader electoral college context." It's also worth noting that there's a difference in passion between Trump and Clinton supporters. "Trump's not gaining any new votes, but Clinton's losing votes," said Switzer. "In a low-election turn-out, that helps Trump. "Trump's supporters will turn out to vote, rain, hail or sunshine. They're pumped up. Whereas Hillary's basis is less enthused - you look at the Bernie Sanders side, and they associate her with scandal, with Wall Street, and with being a hawk on foreign policy." The very fact that voting in the US is voluntary, in other words, could dramatically shape the election result. Then again, only time will tell.