In a move that has been heavily criticised by foreign leaders, charities and corporate business owners, Donald Trump moves to ban refugee’s from at least 7 countries for 90 days. The decision was made in the protection of US citizens although many have branded it a ‘ban on Muslims’.
The decision has sparked outrage from foreign leaders, Angela Merkel the German Chancellor has expressed her criticism of the move, while the British Olympian Mo Farah has labelled the move ‘ignorant and prejudice’.
Surprisingly the US Dollar has strengthened against the Euro and US Dollar, but the wider implications for the global economy are quite profound. Trump plans to expand his agenda into Mexico, where he has already made plans to make the Mexican government foot the bill for the wall. The Peso has continued to post losses against the US Dollar since Trump first made the announcement during his campaign back in Summer.
The US President has rattled more than just Mexico’s feathers, tension is already building between China and Taiwan since Trump’s inauguration, with reports that Chinese aircraft carriers are heading across the Taiwanese Strait.
His proposed plans to implement tariffs on Chinese imports could also be at the detriment of the Australian economy with China one of its biggest exporters of raw materials, but the prospect of a trade war with China extends well beyond the Australian economy.
The news is very likely to have implications closer to home, and as petitions mount for the Government to block Trump access to the UK May has rejected the calls claiming it would ‘undo everything’. Even in the absence of tolerance the Prime Minister appears desperate to secure a trade deal with the US even if the consequences upset other European neighbours. May has already been warned against negotiating trade deals whilst it remains a member of the EU, and in light of recent events the relationship between the UK and EU may head further south.
There remains significant global risks and those exposed to currency fluctuations may be best to protect their position sooner rather than later, it grows increasingly difficult to predict which way exchange rates will sway.