Trump is a relatively new convert to the appeal of cryptocurrencies, having recently launched a venture of his own in the space, and has promised to make the US the centre of the crypto universe. His campaign got a lot of money from crypto billionaires.

Bond investors weren’t as ecstatic. Trump’s tax cuts are unfunded and, along with his trade and immigration policies, would add $US7.75 trillion to US government deficits and debt and, according to the Committee for a Responsible Federal Budget (CRFB), potentially as much as $US15 trillion.

America’s debt-to-GDP ratio is already 99 per cent, with a debt of around $US36 trillion. It would grow to 129 per cent over the next decade under the CRFB’s central projection for the cost of Trump’s policies.

Those policies, particularly his plan to introduce a baseline tariff of 10 per cent and possibly 20 per cent for all imports and a 60 per cent duty on imports from China, would be highly inflationary, as would his promise to round up more than 11 million illegal immigrants in detention centres and deport them, which would shrink America’s pool of low-cost labour.

The prospective blow-outs in US debt and the inflation rate have unsettled bond investors. If Trump delivers his platform and inflation surges again, they might be called on to play a vigilante role similar to their counterparts in the UK bond market, who forced Liz Truss out of office in 2022, 50 days into her term as prime minister, after she announced big but unfunded tax cuts.

Trump’s fixation with tariffs (and lack of understanding of how they actually work) has implications beyond their impact on America’s inflation rate (because the increased cost of imports would be passed onto US businesses and households) and economy (where the growth rate would be lower than it might otherwise be).

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While the US Federal Reserve Board is likely to cut US interest rates by 25 basis points this week, with another of similar magnitude expected next month, it is more likely to be raising rates sometime next year to counter the rising inflation resulting from Trump’s policies, which would set up a confrontation with a president who has made it clear he wants influence over the Fed’s decision-making.

The yuan, Australian dollar and euro were among the currencies that depreciated in response to the US election result.

Their economies – particularly China’s and, because it is our biggest export market, Australia’s – would be hard hit by Trump’s tariffs. UBS has estimated that, if Trump does slap a 60 per cent tariff on all imports from China, it would halve China’s economic growth rate.

If Trump forges ahead with his tariffs, the International Monetary Fund has estimated that a 10 per cent baseline tariff would cut 0.8 per cent from global GDP next year and 1.3 per cent in 2026. While China would be most affected, so too would the US economy, with the impacts much greater if other countries retaliate with their own tariffs.

Some in Trump’s orbit argue he is using the threat of tariffs as leverage to get better trade outcomes for the US and that the baseline tariff and the 60 per cent he has threatened to impose on China’s imports are more bluff than real.

The self-professed lover of tariffs – “to me, the most beautiful word in the dictionary is tariff” – believes himself to be the consummate dealmaker, so there may be something to that.

The last time he used tariffs to negotiate a deal, however, was in early 2020, when China averted the threat of even higher and broader tariffs by agreeing to, among other things, buy an additional $US200 billion a year of US exports.

According to the Peterson Institute, it actually bought about 58 per cent of the US products it had committed to, but its imports from the US were still below the levels experienced before the trade war. Effectively, Trump’s first trade war achieved nothing.

Trump’s tariffs would diminish the US and global economies for no gain, but losses for everyone.

They would be a tax on US households, attract retaliation and deprive the US of the critical minerals that China has a stranglehold on, undermining America’s technology advantages. You can’t create basic, let alone advanced, technologies without access to the raw materials for semiconductors, for instance.

Trump wants to end Joe Biden’s “EV mandate” (there is no such thing) and is likely to withdraw the US from its global carbon emission commitments. The green elements of Biden’s Inflation Reduction Act are unlikely to survive the Trump presidency, even though they and the CHIPS Act have sparked a massive investment boom in the US.

The prospect of global trade and growth shrinking and the US reversing the Biden administration’s clean energy policies led to the copper price slumping 5.3 per cent on Wednesday.

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The copper price is regarded as a barometer of global economic health and prospects and has taken on extra significance because of its importance to green technologies. “Dr Copper,” as it is sometimes referred to, appears concerned about the patient.

Four more years of Trump and more of the chaos and dysfunction that characterised his first term, but this time unchecked by either his cabinet or Congress, is a disconcerting prospect. If he does what he says he will do, as promised in his victory speech, Americans might regret what they voted for once they experience it.

Those outside America, of course, can only hope that there are some sensible Republicans in the administration and Congress to discipline Trump’s wilder instincts while preparing for the worst that he might do.

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.