A VICTORY for Donald Trump in this week’s long-awaited US presidential election is likely to spark a sell-off in sharemarkets around the world and have potentially serious implications for trade-focused economies such as Australia’s.

With the Republican presidential candidate Mr Trump almost level with Democratic candidate Hillary Clinton in the polls, concerns are mounting about the fallout should the controversial businessman win the race to the White House on November 8.

A win by Mr Trump would likely trigger stock market falls of five to 10 per cent globally, while safe havens like bonds and the US dollar would rally, according to AMP Capital chief economist Shane Oliver.

Investors are particularly worried about Mr Trump’s protectionist trade policies triggering “a global trade war”, Dr Oliver said in a report. “Australian shares would be particularly vulnerable to this given our high trade exposure,” he said.

The economic implications for the US and rest of the world are mixed, with many Trump policies, including big tax cuts and increasing defence and infrastructure spending expected to provide an initial boost.

“Longer term though, the budget will likely blow out and protectionist tariff hikes would likely set off a trade war along with much higher consumer prices and immigration cut backs would boost costs,” Dr Oliver said. Mr Trump has promised major personal and corporate tax cuts, and has repeatedly attacked China during his campaign, blaming the world’s second-largest economy for stealing American jobs.

His protectionist policies — which include a 45 per cent tariff on Chinese goods and 35 per cent on Mexican goods — could hit global trade.

University of NSW Business School economics fellow Tim Harcourt holds grave fears about a Trump presidency.

“Trump could be the most isolationist, protectionist President since Herbert Hoover in the ‘20s, so its actually quite alarming for the world, particularly if he put up tariffs and cancelled trade agreements and so on,” Mr Harcourt said.

Mrs Clinton is seen as more of a steady hand, given the former Secretary of State’s extensive political experience.

While Mr Trump is unlikely to pick a trade fight with Australia, any tension with China would have a knock-on affect locally, according to former Australian foreign minister Bob Carr.

“I think the economic shock to Australia would be big. The damage he would do by a trade war with China would be immeasurable,” he said.

The Australian dollar is expected to fall if Mr Trump wins and his policies, including tax cuts, higher government spending and tariffs, are “very inflationary”, according to currency strategists at the Commonwealth Bank. A weaker Australian dollar would make imports more expensive, although it would be positive for commodity exports.

Investors have already started to offload shares in the US and Europe as well as Australia on concerns about a Trump presidency.

US stocks this week dropped to their lowest level since July as Mr Trump rose in the polls after the FBI reopened its probe into Mrs Clinton emails. Should Mrs Clinton win, it would be positive for stock markets, with an initial relief rally forecast.

Another positive for Australia is Mrs Clinton’s pledge to strengthen international alliances and embrace trade deals.

But if Congress is split with the Democrat Party controlling the Senate and the Republican’s the House of Representatives, it will “limit any impact” of the result on financial markets, according to CommSec chief economist Craig James.