One of the world's leading credit-rating agencies thinks Trump could be a disaster for the global economy

In a report on Friday, Fitch said the uncertainty of Trump's economic policies, as well as his penchant for protectionist trade policies, posed a risk not only to sovereign bonds but to overall economic conditions as well.

"The Trump Administration represents a risk to international economic conditions and global sovereign credit fundamentals," a press release from Fitch said. "US policy predictability has diminished, with established international communication channels and relationship norms being set aside and raising the prospect of sudden, unanticipated changes in US policies with potential global implications."

Fitch said some of Trump's policies — specifically tax cuts and deregulation — would be positive for economic growth but his recent policy preferences and talk on trade and immigration would be an overall drag. From the release (emphasis ours):

"The primary risks to sovereign credits include the possibility of disruptive changes to trade relations, diminished international capital flows, limits on migration that affect remittances and confrontational exchanges between policymakers that contribute to heightened or prolonged currency and other financial market volatility. The materialization of these risks would provide an unfavorable backdrop for economic growth, putting pressure on public finances that may have rating implications for some sovereigns. Increases in the cost or reductions in the availability of external financing, particularly if accompanied by currency depreciation, could also affect ratings."

Fitch did note that US policy toward countries "may change quickly" under the Trump administration. There have already been reports of tension between Trump and longtime allies such as Australia.

Fitch did say the upheaval may be short-lived, suggesting the administration could "settle in" and promote pro-growth policies. Fitch sees this outcome, however, as unlikely. From the release (emphasis ours):

"In Fitch's view, the present balance of risks points toward a less benign global outcome. The Administration has abandoned the Trans-Pacific Partnership, confirmed a pending renegotiation of the North American Free Trade Agreement, rebuked US companies that invest abroad, while threatening financial penalties for companies that do so, and accused a number of countries of manipulating exchange rates to the US's disadvantage. The full impact of these initiatives will not be known for some time, and will depend on iterative exchanges among multiple parties and unforeseen additional developments. In short, a lot can change, but the aggressive tone of some Administration rhetoric does not portend an easy period of negotiation ahead, nor does it suggest there is much scope for compromise."

Fitch said countries that bear the most risk under a Trump administration are those that have had a close economic connection to the US under previous administrations but could "come under scrutiny due to either existing financial imbalances or perceptions of unfair frameworks or practices that govern their bilateral relations."

In addition, countries that have a large number of immigrants in the US that send back remittances and those that ship goods to the US face risks to their economies.

According to the release, the list of countries and regions that could see a significant negative impact from Trump's policies are Germany, Canada, Japan, China, Mexico, the Netherlands, the UK, Honduras, Nicaragua, Guatemala, El Salvador, Brazil, East Asia, and Central Europe.