Trump becomes president 20th January 2017! What does it mean for Wine Investors?

There were a lot of people flooding the streets with banners and tears the night Donald J Trump got elected. As Michael Moore puts it, America has retaliated at the elite rich by electing a President like Trump.. While many of Mr Trump’s plans make a lot of sense for a stronger economy over the long haul. In the short term, it’s likely the stock market will go down or correct itself in 2017 and like most stock market adjustments, they always come when you least expect them to. Dow has rallied to an all time high nearing 20,000 points yet the data points on the economy do not point to a bullish market for 2017.

So why all the growth in the stock market? I’ll leave that analysis for the stock pundits.

The bold words thrashed out by Trump towards China about import tariffs may create a bump in the economy just on the repercussions of the relationship between the two countries. It is unlikely that China will be affected by the USA if they start a trade war. After I saw the sales figures from the famous U.S.A. Black Friday and CyberMonday, they did a total of 6.79 Billion USD for the 2 days. As opposed to China for their Singles Day sale through AliBaba which did 17.8 Billion USD (Just one day!) A trade war is likely to affect the U.S.A more than China.

The most obvious factor that will have a positive impact on wine investment is the global outlook for the stockmarkets moving through 2017. As investors bail out of stocks, they will move their assets into fine wine. It is clear from the data on fine wine that more money flowed into fine wine investments in 2016. The Livex posted 4 consecutive high months and results for October showed a 3.6% increase in the Livex 100. Very dramatic increases in wine should continue for 2017. Confidence is high for wine investors and they realised the opportunity and come back into the market with a positive buying force.

Trump plans to bring back jobs to America by forcing U.S companies like Apple to bring back production of their products in the U.S. While this is the ‘right thing to do’ for the American people. It is not as straightforward as it sounds.

Making the IPhone in the USA as opposed to China will most certainly make the IPhone more expensive or a profit margin reduction for Apple. I can not see the latter happening.

As for Wine Imports into the USA, this remains to be seen whether Trump will apply higher tariffs on fine wine that is not made in the USA.

In all the statements that Trump has made, we could not find any reference to applying taxes on fine wines. He is a wine lover and enjoys a good glass of fine wine. Given that the Trump Hotel chain carry a healthy selection of fine wine and Champagne on their menus. It is unlikely he will push decisions that could affect revenue streams of his own business.