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Trump’s Economic Policies Expected to Drive Inflation, Affect Global Markets

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With former President Donald Trump’s historic reelection victory, financial experts warn that inflation is likely to rise in the United States and globally if Trump implements his campaign pledges, which include aggressive tax cuts, strict immigration policies, and high tariffs on imported goods. CNN projected Trump’s victory on Wednesday, securing him a second term in office alongside a Republican majority in the Senate, positioning him to enact a potentially transformative economic agenda.

U.S. stock markets surged following Trump’s win, and the dollar strengthened against major currencies as traders braced for increased inflation and fewer interest rate cuts from the Federal Reserve. Matthew Ryan, head of market strategy at Ebury, noted that a stronger dollar reflects investor expectations that Trump’s policies—particularly on tariffs and immigration—will boost inflation and potentially lead to elevated interest rates.

“Investors are bracing for tariffs… which will push up the price of imported goods for American shoppers,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. Trump’s promise of mass deportations could also raise wage costs for U.S. companies by limiting the labor pool, she added.

Higher Tariffs on Imports

During his campaign, Trump proposed raising tariffs to 10-20% on all imported goods, a drastic increase from the current 2% average, with a 60% tariff specifically on Chinese imports. He has also suggested tariffs as high as 200% on cars manufactured in Mexico or by U.S. companies that relocate production there. According to analysts, these tariffs would act as a tax on imports, increasing costs for consumers and businesses reliant on imported materials.

Economists warn that higher tariffs could disrupt the Federal Reserve’s interest rate strategy. Nomura analysts indicated that due to anticipated inflation from tariffs, they now expect only one rate cut in 2025, with policy likely remaining on hold until inflation subsides.

Impact on Global Markets and Trade

The effects of Trump’s tariffs could reverberate beyond U.S. borders. If trading partners impose retaliatory tariffs on American exports, global inflation could rise, potentially stunting world trade and economic growth. “A material increase in global inflation would follow, while the ensuing hit to world trade would negatively impact growth,” noted Investec chief economist Philip Shaw and economist Ellie Henderson.

A stronger dollar could also impact global inflation, particularly for countries that rely on commodities priced in U.S. dollars. As the dollar gains strength, these countries may face higher costs for essential goods, which companies would either have to absorb or pass on to consumers. This effect could force adjustments in international markets, with some countries like China potentially offloading excess goods to other nations with lower tariffs, possibly dampening inflation in those areas.

Risks for Key Trading Partners

Economies heavily reliant on U.S. exports, such as Canada and Mexico, may feel the direct impact of Trump’s tariffs. BMI, a market research firm under Fitch Solutions, warned that Mexico, Canada, and other nations with trade surpluses, including China, Japan, Germany, and South Korea, could face pressure to increase imports of U.S. goods. A 60% tariff on Chinese goods alone could cut China’s economic growth by up to 0.8 percentage points over the next two years, according to BMI.

German exporters could also experience significant setbacks if Trump enacts a 20% tariff on all trading partners. The Ifo Institute for Economic Research in Munich warned that German exports to the U.S.—its largest market outside the EU—could drop by around 15%, potentially posing a severe economic challenge for both Germany and the EU.

As Trump prepares to implement his economic agenda, economists expect a turbulent period for global markets, marked by inflationary pressures, potential trade conflicts, and shifting alliances.

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Chile Holds Presidential Election Amid Crime and Immigration Debate

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Chile is holding its presidential election on Sunday, with candidates campaigning on tough stances on crime and immigration. The vote comes four years after progressive Gabriel Boric was elected, at a time when the electorate is deeply divided and a new compulsory voting law adds an element of uncertainty.

Over 14 million Chileans are eligible to vote in the elections, which will also renew the entire Chamber of Deputies and nearly half of the Senate. Security and immigration concerns have dominated the campaign, shifting public attention toward conservative candidates. Evelyn Matthei has called for drug traffickers to be “in jail or in the cemetery,” while Franco Parisi described drug trafficking as “narco-terrorism” and advocated for “bullet or jail.”

The three main contenders offer contrasting visions for Chile’s future. José Antonio Kast, 59, a Republican Party member and the brother of a former minister who served under General Augusto Pinochet, is running for president for the third time. He has focused his campaign on combating crime and illegal immigration. Jeannette Jara, 51, a former minister in Boric’s government and member of the Communist Party, has pledged to expand pensions, lower electricity costs, and construct tens of thousands of new homes. Johannes Kaiser, 49, a former YouTube commentator and legislator, has questioned vaccination programs, opposed abortion, and promised to withdraw Chile from climate agreements and the Inter-American Court of Human Rights.

The introduction of compulsory voting in 2023 could significantly affect turnout, particularly among younger voters. Generation Z, born after 1996, accounts for roughly a third of the electorate, and polls suggest that 30% of these voters have yet to decide. Social media has played a major role, with candidates using platforms like TikTok to mobilize supporters. Jara and Matthei have accused Kast of orchestrating social media campaigns against them, allegations he denies.

Polls indicate a close race. Latest surveys show Jara leading with 30% support, followed by Kast at 22% and Kaiser at 15%. Prediction markets, however, see Kast as the frontrunner with a 70% chance of winning. Analysts suggest that none of the candidates is likely to secure an absolute majority on Sunday, making a run-off election probable on 14 December, likely between Jara and Kast.

A conservative or far-right advance could also reshape the legislative landscape. Polls suggest that both coalitions might achieve a majority in Congress, raising the possibility of a government with limited parliamentary opposition—a scenario not seen in Chile in the past 15 years.

Polling stations opened at 8:00 local time (UTC-4) and will close at 18:00. With crime, immigration, and economic issues at the forefront, this election is being closely watched as a test of Chile’s political direction in a highly polarized environment.

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Trump Orders Justice Department Probe Into Epstein Ties With Clinton, Other Democrats

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Former US President Donald Trump has directed Attorney General Pam Bondi to launch an investigation into connections between convicted sex offender Jeffrey Epstein and several prominent Democrats, including former President Bill Clinton. The move follows the release of new emails by Congress showing Epstein’s communications with influential figures in the US and abroad.

The emails, released Wednesday by the House Oversight Committee, stem from Epstein’s personal accounts and reveal interactions with lawmakers, business leaders, and other high-profile individuals. Trump accused the Democratic Party of attempting to revive what he called the “Epstein hoax” to distract from policy failures and political setbacks, including a recent government shutdown.

“Epstein was a Democrat, and he is the Democrat’s problem, not the Republican’s problem,” Trump said in a statement on social media. He also referenced Clinton, former Treasury Secretary Larry Summers, and LinkedIn founder and major Democratic donor Reid Hoffman, asserting that they had close ties to Epstein.

Trump confirmed that he had instructed Bondi to investigate Epstein’s connections with Clinton, Summers, Hoffman, and financial institutions such as J.P. Morgan Chase. “I will be asking A.G. Pam Bondi, and the Department of Justice, together with our great patriots at the FBI, to investigate Jeffrey Epstein’s involvement and relationship with Bill Clinton, Larry Summers, Reid Hoffman, J.P. Morgan, Chase, and many other people and institutions, to determine what was going on with them, and him,” Trump said.

Clinton has denied any wrongdoing or awareness of Epstein’s criminal activities. J.P. Morgan Chase also issued a statement expressing regret over any association with Epstein, emphasizing that it had ended relations with him years before his arrest. “We regret any association we had with the man, but did not help him commit his heinous acts,” said Patricia Wexler, a spokesperson for the bank.

Bondi announced via social media that she had appointed Jay Clayton, U.S. Attorney for the Southern District of New York, to oversee the investigation. “Clayton is one of the most capable and trusted prosecutors in the country, and I’ve asked him to take the lead,” she said, noting that the Department of Justice would conduct the inquiry with “urgency and integrity.”

The announcement comes a week before the House of Representatives is set to vote on whether the Justice Department should release all files related to Epstein, who died by suicide in a federal prison in 2019 while awaiting trial on sex-trafficking charges. Republican Congresswoman Marjorie Taylor Greene urged Trump to ensure that House Republicans vote in favor of releasing the documents, calling failure to do so a “huge miscalculation.” Greene and four other House Republicans have already filed a discharge petition, which has garnered 218 signatures, seeking the public release of all Epstein-related records.

The investigation highlights ongoing scrutiny of Epstein’s network and connections to prominent political and financial figures, as well as continuing debates over transparency and accountability in Washington.

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US Nuclear Weapons in Germany Raise Security Questions Amid Rising Global Tensions

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As the Bundeswehr marks its 70th anniversary in Berlin, the celebration is shadowed by growing anxiety over Germany’s security. Around 20 US nuclear weapons are currently stored in the country—modernised, ready for use, and symbolic of Washington’s longstanding commitment to Europe’s defence. Yet experts warn that this deterrent may not guarantee protection if the United States hesitates to act in a crisis.

The weapons, believed to be B61-12 hydrogen bombs stored at Büchel Air Base in Rhineland-Palatinate, can be deployed by fighter jets such as the Eurofighter. Their destructive capacity remains immense. The bombs form part of the US nuclear umbrella extended to NATO allies since the Cold War, but concerns have deepened over the reliability of that shield under President Donald Trump, who has questioned aspects of NATO’s mutual defence commitments.

“It has never been and cannot be certain that the US will actually deploy nuclear weapons. It is not a guarantee. But the important thing is that the enemy cannot rule it out,” said political scientist and security expert Karl-Heinz Kamp, a former president of the Federal Academy for Security Policy and an associate fellow at the German Council on Foreign Relations. “Deterrence is pure speculation. It has held up so far, for 50 years.”

Reports from several US media outlets suggest that the United States brought new nuclear weapons to Europe over the summer, with signs including flight paths and the delivery of F-35 fighter jets designed to carry tactical nuclear weapons. Germany has also ordered a fleet of F-35s, expected to arrive in 2026.

Since the invasion of Ukraine in 2022, nuclear deterrence has returned to the forefront of European security debates. Russian President Vladimir Putin has repeatedly brandished nuclear threats, touting his arsenal of about 5,500 warheads and showcasing intercontinental missiles such as the RS-24 “Yars.” Kamp noted that while Putin uses nuclear rhetoric as a political tool, actual deployment remains unlikely. “Whoever shoots first, dies second. That is not a desirable state of affairs,” he said.

Still, questions persist about whether US nuclear weapons in Germany could be relocated to NATO’s eastern flank, including the Baltic states, Poland, or Romania, as a stronger warning to Moscow. Kamp acknowledged this possibility, calling such a move a potential “signal to Russia.”

Anti-nuclear groups, including ICAN Germany, continue to demand the withdrawal of US weapons from German territory, arguing that they make the country a target rather than a protectorate.

While some analysts argue that Germany could technically produce its own nuclear arsenal, Kamp described the idea as politically untenable given Germany’s post-war commitments. The nation is bound by the 1990 Two Plus Four Treaty and the 1969 Nuclear Non-Proliferation Treaty, both of which prohibit it from developing nuclear weapons.

Public opinion also stands firmly against the idea. Only about a third of Germans support developing domestic nuclear arms. For now, Germany’s security remains anchored within NATO, protected not only by the United States but also by the nuclear capabilities of France and the United Kingdom.

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