Trump is back: what Kazakhstan can expect from the US

Tengrinews.kz - Kazakh economists have assessed the consequences of Donald Trump's victory in the US presidential election for the global economy, oil prices, inflation, and Kazakhstan's trade with its main partners

In his speech after winning the election, US President-elect Donald Trump promised to lower taxes, support the oil industry, and increase tariffs on imports to the US from China and Europe. We asked Kazakh economists how these measures could affect the global economy and the economy of Kazakhstan in particular.

Trade pressure on China and risks for the global economy

Economist Marat Kairlenov noted that the possible increase in trade pressure on China from the United States, which Trump indirectly mentioned in his speech after the elections, could hit China hard and lead to defragmentation of the global economy. In turn, China, as the largest buyer of raw materials, experiencing a crisis, may reduce its purchase, which will negatively affect the prices of not only oil, but also other raw materials.

Impact on oil production and prices

"Trump has said that after his victory he intends to increase US oil production. All other things being equal, for example, the influence of the Iran factor, this could lead to a decrease in oil prices from the current levels of $70 per barrel to $60, and hopefully not lower," the economist noted.

Peace initiatives and sanctions

According to Kairlenov, Trump's promises to achieve peace and end the conflict in Ukraine should not be taken so optimistically, since it is unknown under what conditions this peace will be achieved. Will Ukraine have guarantees and will the war really be ended or only suspended. This will also seriously affect the issue of sanctions and whether the sanctions pressure on the Russian economy, which significantly affects the economy of Kazakhstan, will increase or decrease.

The impact of tariffs on inflation and the dollar

"Trump threatens high tariffs on Chinese and European products, which could cause prices and inflation to continue to rise worldwide. The US Federal Reserve may continue to raise the base rate in this regard, which will cause the dollar to rise in price. Also, the growth of oil production in the US could lead to a drop in prices to $50-60 per barrel, which could be a double blow to Kazakhstan, on the one hand, due to the expensive dollar, and on the other, due to the fall in oil prices. At the same time, Trump is known for his support of the stock market and will put pressure on the Federal Reserve System to lower the rate. Let's hope that there will be no 'perfect storm' for the economy of Kazakhstan, but we need to be prepared for it," Kairlenov added.

Slowing global economic growth

Economist and author of the Telegram channel "Commentary" Eldar Shamsutdinov believes that the possible introduction of high tariffs on imports by the United States, especially from China, could slow global economic growth, reduce the volume of world trade, and cause inflationary pressure. For Kazakhstan, as an export-oriented economy, this could lead to a decrease in demand for raw materials and a decrease in export revenues. In addition, exchange rate fluctuations and a deterioration in foreign trade conditions are possible. Increased volatility of foreign exchange could increase inflationary pressure.

Increased oil production and pressure on prices

"The second Trump administration will likely seek to increase US oil production by easing environmental regulations and expanding offshore and federal land leasing opportunities. According to the latest data, the Energy Information Administration has raised its oil production forecast 2024, expecting an average production level of 13.25 million barrels per day. This is 20 thousand barrels more than the previous estimate. In 2025, further growth is expected to be 13.77 million barrels per day. Increased oil supply from the US may put downward pressure on global oil prices, especially if demand does not grow at a corresponding pace," the economist noted.

Interest rate increase and dollar strengthening

According to the expert, if the US Federal Reserve System decides to raise interest rates to combat inflation, this could strengthen the dollar. For developing countries, including Kazakhstan, this is a negative factor, as it leads to capital outflow, weakening of national currencies, and higher costs of servicing external debt. This could also increase the cost of borrowing for Kazakh companies and the government. On the other hand, raising rates could slow economic growth in the US, which could reduce demand for exports from developing countries.

Potential reduction in geopolitical tensions

Regarding foreign policy and Donald Trump's promises to end all military conflicts, the expert notes that this could reduce geopolitical tensions, which would have a positive effect on the global economy. Reducing sanctions pressure could open up new opportunities for international trade.

"For Kazakhstan, this could mean expanding trade ties and attracting foreign investment, which would have a positive impact on economic growth. However, everything will depend on specific strategies for freezing or resolving conflicts. If peace agreements are achieved through increased sanctions or economic pressure, for example, by lowering world oil prices to deprive Russia of financial resources, the consequences for Kazakhstan could be quite serious," Eldar Shamsutdinov added.

The US presidential election took place on November 5. Republican Donald Trump won the election. He received 277 votes, while his vice president, Democrat Kamala Harris, received 224. A few hours after the polls closed, Trump declared a "political victory" and called himself the 47th president of the United States.

Earlier, renowned American philosopher and political scientist Francis Fukuyama, a senior fellow at Stanford University, has commented on the implications of Donald Trump's victory in the U.S. presidential election.

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