Page 28 - Issue 70

Vol 1 - issue 70 ELITE

rd
Abdelrahman Sakr- Economics- 3 Year

Trump’s Effect

The last 30 days were a complete mess safest asset in the world. SCDS of
for the global economy, all thanks to emerging countries is spiking as well,
Mr. Trump. America’s financial market especially those dependent on foreign
almost crashed after his tariffs portfolio investment. Egypt’s and
nd
announcement on the 2 of April then Turkey’s SCDS are up to a 12 months
stock prices rebounded after he high record (check graph below). And
announced a 90 days delay, and saying IMF projections to growth in emerging

he is open to negotiations. The damage markets has dropped.
is not gone however, and is here to stay. Emerging countries will be hit the most
Mr. Trump’s effect is not panic by these decisions. Even if tariffs bring the
among investors, it is uncertainty and hope that these countries might gain by
loss of trust in US institutions and the companies reshoring factories to them,

global financial order the US is there is lots of losses that most likely will
supposed to guard. The sovereign credit outweigh these potential gains anyway.
default swap (SCDS) of five year USA Not to mention that these countries have

bonds, an insurance tool against The
federal government default risk, is up to
a level second only to those of May
2023, when investors were worried
negotiations around the government

debt-ceiling would not succeed Check.
And This is the SCDS of USD
denominated dollars of the USA federal

government, previously considered the

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