Investing.com -- As the 2024 presidential election draws nearer, speculation is mounting regarding the potential of a second Trump term.
Nomura said in a note Tuesday that while Vice President Kamala Harris currently appears to be the slight frontrunner, a Trump victory is still seen as a strong possibility.
In light of this, Nomura conducted a survey among its clients to gauge their expectations for a Trump 2.0 presidency and its impact on U.S. policies, economies, and global markets.
According to Nomura’s findings, investors anticipate that Trump’s approach to tariffs would be more restrained than his rhetoric suggests. A significant majority (60%) believe that although Trump will likely raise tariffs, the increases will be less severe than the 60% on China and 10% on the rest of the world that he has proposed.
The firm adds that tax policy under Trump is expected to continue along the lines of his 2017 Tax Cuts and Jobs Act (TCJA). Nearly half of the respondents (44%) expect Trump to fully extend these tax cuts, with another 23% anticipating additional tax cuts.
Immigration policy is another area where Trump is expected to take strong action. The survey revealed that most investors (41%) predict a sharp limitation on illegal immigration without mass deportations, while a close 37% expect both stringent immigration controls and active deportations.
Foreign policy under a second Trump term could also see dramatic shifts. Notably, Nomura says that 25% of respondents believe Trump might withdraw the U.S. from NATO, while 59% think he will demand that some allies pay for U.S. defense protection.
Nomura’s survey reflects concerns about higher inflation, a larger fiscal deficit, and increased geopolitical tensions, particularly in regions like the Middle East, Russia, and Ukraine.
However, despite these potential risks, 57% of respondents expect higher GDP growth under Trump 2.0, indicating a complex and multifaceted outlook for the U.S. economy and global relations.