Trump impeachment more like a storm in the US teacup

KUALA LUMPUR: News that the US President Donald Trump has been impeached by the Democratic-led House of Representatives is seen more like a storm in the US teacup that is unlikely to raise major concerns among global market players.

When contacted by Bernama yesterday, AxiTrader chief Asia market strategist Stephen Innes viewed the impeachment merely as a partisan move by the Democrats to ensure the Republican President’s “dirty laundry” remains in the headlines.

“The impeachment process will not pass the Republicanled Senate vote, but the Democrats will try to delay the process to prevent the Senate from summarily writing it off.

“Given that the Republicans hold a Senate majority, it would need 20 Republican senators to flip to impeach Trump and as of today, none have suggested they will,” he said.

Hence, Innes said, the global markets have to a large degree ignored this noise.

Echoing Innes’ opinions, Rakuten Trade Sdn Bhd vicepresident of research Vincent Lau said the news would not cause major concerns among investors, as many believed it was unlikely for the Republican- controlled Senate to remove Trump from office in a trial that would begin in January 2020.

“It is not a major thing to be worried about. If worst comes to worst, the impeachment would only make Trump

‘ lose face’ or have his image tarnished, since he is the third US president in history to be impeached by the House of Representatives,” he said.

However, on whether the impeachment process would damage Trump’s re- election in November 2020, Innes remains uncertain.

“If it does, and Democratic presidential candidates Joe Biden or Elizabeth Warren become definite favourites to win the presidency, the markets will react very negatively due to their aggressive taxation policies,” he cautioned.

As for trade relations with China, both Innes and Lau are optimistic that the impeachment would not have big impact on the trade deal.

According to Innes, the Democrats are equally protectionist so the impeachment does not necessarily mean a thawing of trade tensions.

“This could backfire on the Democrats as it could become a rallying cry for the Republicans and result in more swing voters that view the process as a political sham,” he said.

Meanwhile, Lau, who believes the Senate would keep Trump in office, said the “phase one” US- China trade deal would not be affected following the impeachment as both countries need the deal to further boost their economic growth. — Bernama