Trump’s election win may trigger a slowdown in global investment cycle, says Kearney’s Bob Willen

Under President-elect Donald Trump, US and China are headed for more volatile times. Trump has threatened to impose tariffs up to 60% on Chinese goods being imported into America.


Will this hurt China and disrupt the global economy, or will it force China to pursue stronger domestic growth and better trade ties with other nations, including India, remains to be seen, but clearly, Trump’s cabinet appointments show that he plans to execute a muscular foreign policy with respect to China.

Trump has nominated John Ratcliffe to head the CIA, Fox News host Pete Hegseth as Secretary of Defence and Florida Congressman Michael waltz as National Security Adviser. Republican Senator Marco Rubio has been nominated as Secretary of State. All of them have very strong views on how US should rise up to the Chinese threat, both economically and territorially.

How does the new Trump presidency, continuing tensions in the Middle East and the Russia-Ukraine war impact the global economy, and does India stand out as a bright spot that may benefit? To discuss this, CNBC-TV18 spoke to Bob Willen, Managing Partner & Chairman at Kearney.

Below are the excerpts of the interview.

Q: What do you think Trump's victory will mean for the US outlook towards the world and the global economy?

Willen: For some time, we've already seen some shifts away from a bipolar world dominated by the US and China ties, and what that means for organisations around the world. With Trump's election and his America First policy, there's probably even more of a shift towards localisation, regionalisation of certain markets, certain supply chains, and the changing global dynamic.

We talk a lot about entering a multipolar phase in the world, and certainly at some level, the de-globalisation of supply chains and trading relationships—a very different dynamic as we look forward relative to the past 20 or 30 years. That is fascinating for so many organisations around the world, trying to make sense of that dynamic, but also a time of significant change in so many ways and what's likely to happen.

We don't have the answers about what President Trump will do. In the end, he's also a pragmatist and needs to find solutions to serve the American people. But we do know that organisations and our clients all across the world are thinking about these things, thinking about their footprint, supply chains and operations all across the world in now very different ways.

Q: What kind of impact Elon Musk could have on Donald Trump's economic policies? Considering Elon Musk's troubles in China, his huge interest there. There has been a slowdown in Tesla's production. There is competition with Chinese EV manufacturers. Musk is big on AI, big on Starlink and SpaceX, considering his stakes, how do you think Elon Musk and the Donald Trump combination will be for India? How will he impact Donald Trump's approach to India?

Willen: He's just one of probably several close advisors that support these policies that appear to be on the way to rolling out in different ways. President Trump has talked about this throughout the campaign, and certainly, his close advisors have certain beliefs; whether one describes them as hawkish or in other ways, I don't think it's just Elon Musk.

Elon Musk looks like he's slated to play more of a domestic role, even in his appointment, looking at government efficiency. Nevertheless, this administration will think very differently about the world, and certainly, some of the policies that have been hinted at and have been proposed will reshape the trading dynamics with China, emphasise the security concerns that we've seen over the last few years in more significant ways and accelerate probably some of the trends looking at alternate sources of supply and different dynamics in trading relationships across the world, and I think India plays in the middle of that. We know that India is developing rapidly. India has incredible potential, and in this changing global dynamic, it presents an interesting opportunity, in addition to some challenges that we see going forward.

Q: Do you feel that the Department of Government efficiency that will be set up by Donald Trump, this is going to function outside of the White House? Do you think it's a welcome step?

Willen: As a US citizen myself, I'm always in favour of government efficiency. What we're seeing, though, and now I speak as an American who has spent half of his professional career outside the US, we see the role of government shifting. The government is a partner with industry in terms of economic growth and development. We talk about a new era of industrial policy where governments are playing a role in shaping industry, establishing priorities, and shaping the regulatory environment in ways that help economies develop. And you could argue that the America First policy is an extreme example of that, but we see other examples around the world where the way global trading relationships exist today, there needs to be a concerted effort between public and private sectors to deliver the best results for people.

Q: From Trump’s appointments, it's very clear that this presidency would be tough on China. How do you think this volatile trade relationship with China will impact the world economy? Will this cause a lot of disruptions?

Willen: There is always disruption when the dynamics shift quickly, and that certainly is one of the risks that we would see now is with the imposition of tariffs and other trade restrictions that may require a degree of resettling in what have been global relationships that have developed over probably many decades. We're already seeing a shift in production, say, from China to other countries in Southeast Asia. We've already seen some shifting in patterns of trade and supply chains from China to other countries.

Q: Do you expect the investment cycle globally to slow down for a few months until people understand how Trump is going to function? Maybe wait till his first six months in office?

Willen: That's probably something we will see; just to try to understand, first see the appointments that get made. It's true with the new US presidency, but probably true in other countries as well, to see the appointments, to see what the initial ideas are and how they would be translated into policy steps.

Q: How will India be poised in this volatile geopolitical order? Two wars are going on. You've got an unpredictable president in the White House with a very strong, perhaps stronger America First policy in his second term. How do you think India stands to lose or benefit?

Willen: I've spoken about de-globalisation, as some call it, also a phase that would be described as a multi-polar world. These present incredible opportunities for India to take advantage of the momentum that it has, the attributes that it has and some of the fundamental strengths that are the foundation for this new aspiration that we see in India, and I think the world is excited about that.

Looking for alternate sources of supply, certainly different relationships. I heard a great description which can be best summarised as, while the economists are talking about de-globalisation, the global south is busy doing business. They are connecting. They're making new relationships. The aspiration, and probably India is at the forefront of that, but so many countries of the global south also are quite keen to see rapid economic growth and development. All of this puts India, I think, in a great position, and we see that with our clients as well, quite excited about what's to come and the role that India could play.

Q: What sectors make you most excited about India?

Willen: Certainly it has to start with the digital economy and what India represents to the world increasingly in the digital sector. We understand and know that there's an objective to create a $1 trillion digital economy in India. I think that's very possible. That's very realistic, and already we see it leading the way in many aspects of digital growth and development.

There are other sectors as well. I think manufacturing clearly, with the Make in India programs continuing to drive growth and development in all different sectors. Perhaps energy is another sector which has India poised to play a leadership role. And in areas like pharmaceuticals, we see the growth of generics, the leadership that India already has being so important to the world and what comes next. There are many, many opportunities that India has looking forward.