Effect of Donald Trump on the world's economy

Trump is being bold on the global stage, but that boldness could come with a cost. If countries start to worry they could become targets of US foreign policy, they may grow more cautious about holding large dollar reserves.

That points to a continued shift toward gold in 2026 and potentially a softer dollar over time.

Trump's aggressive moves in Venezuela and threats against Colombia and others aim to pre-empt Chinese influence by creating a strategic buffer, preventing a modern Cuban Missile Crisis. Economically, this has triggered a global "risk-on" environment. By controlling the world's largest oil reserves, Trump seeks to crash energy prices toward $50/barrel, simultaneously curbing Western inflation and draining Russia's war chest. Greenland represents the ultimate prize in the minerals arms race, containing 25 of 34 critical raw materials essential for modern technology and defence, including 25% of global rare earth reserves, breaking China's monopoly. However, this pursuit risks fracturing NATO. For the global economy, this unilateralism means fragmentation. While the US benefits from lower energy costs, the UK faces sharp growth slowdowns due to rising export barriers. Currencies will remain volatile with a strong Dollar, with the Pound and Euro struggling with US protectionism.