Dear Readers,

The great American author, Mark Twain (real name Samuel Clemens), is reported to have cautioned, “Never discuss politics or religion in polite company”. Despite Warwick being a polite company and with some of the world’s politest and nicest clients, we don’t have the luxury of ignoring or avoiding politics when managing clients’ wealth. This is not to say that we would ever be partisan in our viewpoints, but rather that politics plays such a huge role in the global and local economy, that we are duty bound to take it seriously. So, with this in mind, how do we interpret Donald Trump’s presidential victory last week and what does President Trump 2.0 hold for the world and South Africa in particular?

At one level, the answer lies in Mr Trump’s first electoral victory and presidency in 2016. He clearly identified where both the Democrats and Republicans were going wrong by ignoring unpopular and sensitive issues eating away at the traditional support base of both parties, most notably jobs, illegal immigration, China and the bloated state (remember “drain the swamp”?). In 2024 Mr Trump doubled-down on these messages and his political opponents, President Biden and Vice President Harris, failed to recognise the salience of these for the majority of the electorate.

Indeed, for the first time in 20 years, the Republican party candidate received a majority of the popular vote, as well as winning 312 electoral college votes, and achieving a majority in the Senate and House of Representatives. In other words, President elect Trump will enter the White House in January 2025 with a very powerful political hand.

But what is his mandate and what has he committed to doing policy wise? This can be summarised as follows: clamp down on and deport illegal immigrants, “end inflation”, lower domestic taxes and raise import tariffs, withdraw from the climate change convention and reduce regulation, cut the state sector, end the war in Ukraine, have his legal cases and challenges dropped and clarify abortion rights. It remains to be seen how much of this ambitious agenda is achievable in the next four years of course.

What is clear, however, is that the US business sector, financial markets and the dollar responded to the election results favourably. But your viewpoint regarding Mr Trump’s victory will be coloured by your country of residence, the sector in which you operate, your policy viewpoint and your relationship with the US.

But what does President Trump 2.0 mean for South Africa? Naturally it is far too soon to tell, but again, we can extrapolate from his first Presidency and infer from it. Overall, South Africa is low down on the President elect’s agenda and is likely to drop even further during his second term. South Africa has increasingly aligned itself with the BRICS, China and more recently Russia specifically at the expense of relations with the US and Europe. Besides bilateral trade relations being harmed by higher US tariffs and less than satisfactory strategic/military relations, South Africa’s membership of the African Growth and Opportunity Act (AGOA) is up for renewal in 2025. This will be reviewed by a Republican controlled Congress that is more concerned about South Africa’s foreign policy in key issues and potentially less inclined to renew South Africa’s favoured nation status. Indeed, we have some clever diplomatic footwork ahead of us as a country.

This does not mean that South African investors will be negatively impacted by the Trump 2.0 administration, but rather that Warwick’s chosen team of asset managers in Orion Investment Managers will need to stay on top of what is a rapidly evolving US and global investment environment. We have every confidence that they are ideally placed to do exactly that!

Until next month, stay informed, stay invested and stay safe.