As Donald Trump’s administration looks set for a return, key policies on tax cuts, deregulation and trade wars could reshape global markets. In this interview, Marc El-Lazidi, chief investment officer at Jesmond Mizzi Financial Advisors Ltd, shares his insights on how the Trump 2.0 economic agenda could affect the US, Europe and beyond.
Q. With Donald Trump potentially returning to power, what can we expect from his administration’s economic approach?
A. Trump 2.0 is shaping up to be far more structured than his first term. Key appointments signal a clear vision, particularly in economic policy. At the centre of this is Scott Bessent, the newly appointed US Treasury Secretary and former chief investment officer of the Soros Fund.
Bessent brings decades of expertise to the role and is set to drive an agenda focused on tax cuts, deregulation and reducing government spending. These principles, reminiscent of Reagan-era policies, aim to prioritise US growth and resilience.
Unlike the unpredictability of Trump’s first term, this administration seems better prepared to implement its objectives. Bessent’s extensive experience in managing global investments suggests that his approach will combine bold policy moves with a keen understanding of market dynamics. For Trump, this appointment underscores a shift from populist rhetoric to a more pragmatic strategy designed to bolster the US economy.
Q. Bessent’s strategies seem inspired by Japan’s economic reforms under Shinzo Abe. How might these influence US policy?
A. Absolutely. Japan’s success in breaking deflation through “Abenomics” offers valuable lessons. Under Shinzo Abe, a combination of fiscal stimulus, structural reforms and monetary easing helped revitalise the Japanese economy after decades of stagnation. Bessent appears to be taking a similar approach, focusing on long-term growth by tackling inefficiencies and investing in key industries.
One critical element of Abe’s reforms was a clear focus on innovation and revitalising Japan’s labour market, elements that resonate with Bessent’s vision for the US. By fostering growth in energy, manufacturing and other high-potential sectors, the administration hopes to drive economic expansion while reducing reliance on foreign markets.
The parallels between Abe’s three-arrow strategy and Bessent’s emerging policies signal a shared belief in proactive, large-scale reforms to address systemic challenges.
Q. What does this mean for the US-China trade relationship?
A. The Trump administration’s stance on China has always been about decoupling and securing critical supply chains, and that’s unlikely to change. We can expect continued tariffs and a focus on reshoring industries like semiconductors and electric vehicles.
Under Bessent’s leadership, this approach may become more refined. Rather than broad-stroke tariffs, we might see targeted measures designed to maximise US advantages in key sectors.
For example, boosting domestic production of semiconductors − a sector critical to national security − will likely take precedence. The broader goal is clear: to reduce reliance on Chinese imports and create a more self-sufficient US economy.
This strategy could have ripple effects globally. For Asia, it may signal tighter competition in high-tech manufacturing. For Europe, it could necessitate recalibrating its own trade relationships to maintain relevance in a shifting global landscape.
Q. Europe is facing its own economic challenges. How might Trump 2.0’s policies impact the continent?
A. Europe’s structural vulnerabilities make it particularly exposed to external shocks. Deindustrialisation, energy dependence and political instability − especially in France and Germany − are creating significant headwinds.
For instance, Germany’s reliance on Russian energy and its decision to phase out nuclear power have undermined its industrial competitiveness. Meanwhile, populist movements, like Jordan Bardella’s rise in France, signal a broader political shift that could reshape the continent’s future.
The Trump administration may look to exploit these challenges. Europe’s dependence on US security guarantees and its fragmented approach to economic policy make it an easier partner − or rival − for the US to manage. For investors, these dynamics highlight the importance of closely monitoring transatlantic relations as they evolve.
Q. The US deficit remains a pressing issue. How might Bessent address it?
A. Bessent faces the monumental task of balancing economic growth with fiscal
discipline. His strategy draws heavily from Reagan-era policies: tax cuts, deregulation and reducing government spending. Energy independence, particularly through expanding nuclear and shale oil, is also central to his vision.
The emphasis on domestic energy production serves a dual purpose. First, it reduces US reliance on volatile international markets. Second, it stimulates job creation and growth in regions that have traditionally supported Trump. Bessent’s policies aim to harness these opportunities while ensuring the US economy remains resilient in the face of global challenges.
Q. How do you see the Republican Party evolving under Trump 2.0?
A. The Republican Party is becoming increasingly cohesive, merging working-class priorities with business interests. This unity is a stark contrast to Trump’s first term, which was often marked by disorganisation. Key appointments, like Bessent’s, suggest a more calculated approach to implementing policies that strengthen the US economy and address voters’ concerns.
Beyond economic policy, this shift reflects a broader ideological realignment. The party’s focus on energy, manufacturing and regional growth industries is designed to appeal to a broader base, potentially solidifying its influence in US politics for years to come.
Q. What should global investors focus on as this new economic vision unfolds?
A. Energy, manufacturing and other resilient sectors will likely dominate. As the US shifts its focus away from tech, areas like regional banks, pipeline operators and traditional energy industries are set to thrive. For European investors, adapting to these shifts is crucial, especially as the US leverages its economic policies to influence global markets.
It’s also worth noting that this realignment could signal the start of a new global investment cycle.
For decades, tech has been the rising star. Now, with a return to fundamentals like energy and infrastructure, investors may need to reconsider their portfolios to align with these emerging trends.
The Trump administration’s policies, combined with Bessent’s strategic oversight, could offer unique opportunities for those prepared to adapt.
This interview does not intend to constitute an offer or agreement to buy or sell investments or give investment advice and the contents therein should not be construed as such. Investors should remember that past performance is no guide to future performance and that the value of investments may go down as well as up. The company is licensed to conduct investment services by the MFSA and is a Member of the Malta Stock Exchange. The directors or related parties, including the company and their clients are likely to have an interest in securities mentioned in this article. For further information contact Jesmond Mizzi Financial Advisors Limited of 67, Level 3, South Street, Valletta, on tel: 2122 4410, or e-mail info@jesmondmizzi.com.