President Donald Trump came into office with numerous promises and with one big slogan “America first”. After one hundred days in power, this note analyses what he achieved and the impact for our investment universe: the emerging economies.

Economic reforms

Despite ambitious program reforms on taxes (Tax border or/and corporate rates tax), infrastructure investment programs and more protectionism policy, nothing went through. The main changes have not been under the news radar and mainly regard deregulation. Trump has given one of the biggest boosts to the energy industry by unilaterally dismantling some of the broad government-wide architecture that Obama built to combat climate change and by ordering his agencies to begin unwinding other environmental rules. For instance, the State Department reversed the Obama administration’s rejection of TransCanada Corp.’s Keystone XL pipeline. More deregulation is on the way, regarding the financial and the pharmaceutical sectors.

His biggest early achievement could have consequences for decades: the nomination and confirmation of Supreme Court Justice Neil Gorsuch as Appeal Court Judge, who has a long record of pro-business ruling.

To achieve his economic program, Mr. Trump would need to deal with the Congress. He failed to change the Obama care, an idea unanimously shared by all Republicans. At this stage, it is unlikely, he would be able to find an agreement on more controversial topics like the tax reform or an infrastructure investment program.

Foreign policy

President Donald Trump’s foreign policy is still a work in progress. From an American nationalist policy, the new President met the realities and a sense of responsibility for global security, and economic viability has emerged. The translation on the ground of this policy contrasts with the Trump’s rhetoric campaign.

Continuity in Middle-East

After a disastrous start in Middle-East with the idea to move the U.S. embassy to Jerusalem, Trump met the Sunni Arabs Prince Muhammad bin, Sultan of Saudi Arabia. He normalized the U.S. relation with Saudi Arabia, badly damaged under the Obama administration.

King Abdullah II of Jordan has visited twice, and President al-Sisi of Egypt has been in town to repair frayed ties.

Syria was hit with 59 Tomahawk missiles after the Assad regime allegedly gassed civilians and in Afghanistan, ISIS was hit with the Mother of All Bombs.

Still some uncertainties in Europe, but no diplomatic changes

After Mr. Trump had presented to Angela Merkel  a $300 billion “bill” for defense and security, the U.S. Department reaffirmed his attachment to the NATO.  The relationship with Russia did not improve. Sanctions against Russia, Belarus over Ukraine are in place still and unlikely to be removed soon.

On Mexico and NAFTA

Trump promised to renegotiate the NAFTA treaty and to build a wall between Mexico and the U.S. Regarding the wall, it is unlikely that the Congress will agree on a costly bill. Likely few kilometers would be built only to satisfy the public opinion.

On NAFTA, a new treaty will be agreed including new part of the economy, like e-commerce, but in principle, nothing will change. Indeed, NAFTA provides significant economic benefits not just for Mexico and Canada, but also for U.S. businesses, including Trump’s electoral base. A collapse of NAFTA would increase the costs of many U.S. consumer goods, from avocados to electronics and cars, making struggling lower-class white families particularly hurt. Supply chains would be undermined, and U.S. global competitiveness would worsen.

The Mexican peso is a great example of how perceptions of Trump have changed. It posted the world’s biggest losses after the election, weakening more than 15 percent on concern Trump would make good on his threat to dismantle NAFTA and build a border wall.  For the first time in two years, futures contracts show bullish bets for the peso outnumbering bearish wagers.

Still some uncertainties remain in Central America, but at this stage no drastic protectionism measures or massive migrant’s deportation are expecting.

No change in Asia

Despite harsh rhetoric about trade in general and trade with China in particular, he did not impose high tariffs or other protectionist measures, as threatened during his campaign. At the opposite, he seems to have developed a good relationship with President Xi Jinping. In the continuity of the Presidency of Bush and Obama, he is continuing the high-level economic dialogue with China

(renamed the Comprehensive Economic Dialogue). After suggesting that Washington’s historical One-China policy concerning relations with Taiwan would be reviewed, Trump changed his mind. Even the cancellation of the TTP has been qualified by the Secretary of Commerce as a mistake.

No implication on our Global view

We never believed that Mr. Trump would be able to implement most of these measures and had rejected a Global Trade War scenario. We maintain our main assumptions: 1. A low-interest rate environment, 2. A U.S. budget policy expansion and a limited FED’s action will weight on the dollar value, 3. A stabilisation of the global commodity prices and 4. An increase in the global risk which will play for more diversification and more liquidity investing in emerging economies.

A mixed regional view

The Trump policy should not affect the different region negatively. His inability to implement the promised reform should contain dollar increases. The risk of protectionism measures toward Asia and Central America have diminished. The cut of some subsidies programs is going to affect some Africa countries negatively.

Overall, we remain confident on emerging economies and the consensus quite negative at the start of the year went into our direction.