- Republican Donald Trump won 276 electoral college votes Tuesday, becoming President-elect of the U.S.
- The news spurred markets to tumble worldwide: the Dow Jones Industrial Average had fallen by over 700 points as of press time, and the Mexican peso sank 13% compared to the dollar for the biggest drop in two decades, according to various news outlets.
- The decline reflects a deep uncertainty in the U.S.'s role as a global business leader given President-elect Donald Trump's opposition to established trade agreements and animosity toward otherwise long-time partners, like Mexico.
The initial reaction to Trump's presidential victory is one of uncertainty as analysts struggle to define the degree to which the President-elect would have to enforce his campaign goals.
Typically, Tuesday's victory over the White House, House of Representatives and Senate would indicate a clear policy agenda, but Trump's main policy proposals have not been universally accepted. His proposals to renegotiate the North American Free Trade Agreement and to build a wall on the southern border are among some of the most controversial issues and are among those most likely to impact the supply chain.
Meanwhile, a similarly shocking vote in July demanding the U.K. exit the European Union shows uncertainty is not good for business nor the economy. On the plus side, severe currency declines have rendered some benefits for businesses managing foreign revenue streams and domestic operation costs. Made-in-the-U.K. exports are more competitive as a result, too, but the small benefits are but silver linings in what is otherwise a story about risk.
Recent reports reveal Brexit, and the uncertainty surrounding its regulatory impact, led global supply chain risk to rise to its highest levels since 2013. The popular approval of President-elect Donald Trump's protectionist policies will likely raise the index to a higher level.
When the President-elect visited Mexico, the country's president agreed to converse about a potential reinvestigation of the free trade agreement were Trump to become president. Those talks will be closely watched by the business community.
In the meantime, as business leaders watch tumultuous financial markets, the President-elect must prove to investors his policies will not lead to financial ruin. If it is negotiable, importers and exporters alike would do well to enter long-term contracts with suppliers at a set exchange rate to weather the storm.
How will the Trump victory impact other industries? Here's what we know about the President-elect.