“However, this shift might benefit India and ASEAN countries. Continued US-China polarisation also risks exacerbating geopolitical divisions in the region, increasing risks of disruption to the global supply of semiconductors,” it added.
In a second Trump administration, Moody’s expects large fiscal deficits, protectionist trade actions, climate-measure rollbacks, a stricter stance on immigration, and easing regulations.
Trump is likely to pursue more aggressive immigration policies, including increased deportations, the construction of additional border barriers, stricter visa regulations, and reduced asylum grants.
“Although aimed at reducing unauthorised immigration and prioritising legal immigration based on merit, they could lead to labour shortages in sectors that rely heavily on immigrant labour, such as agriculture, retail, hospitality, construction and healthcare,” Moody’s said in its comment on US presidential elections.In Europe, the reduced US support for Ukraine might increase European governments’ fiscal burdens as governments initially try to compensate for the US support, Moody’s said.
“US disengagement from NATO would also increase security risks in Europe by emboldening Russia, putting countries along NATO’s eastern border at greatest risk. Also, the proposed blanket tariffs and US-China tensions will likely hurt trading partners in the region, but could indirectly benefit Europe by making it a more attractive investment destination because of its relative policy stability,” the US-based rating agency said in its report released late evening.