We have assessed the risk associated with the different political and economic approaches of Joe Biden and Donald Trump. On November 5, Americans will go to the polls for a historic presidential election.
Evaluation of Risks Surrounding the 2024 US Elections
Coface economists have evaluated the risks pertaining to the outcome of the US elections on November 5 in an internal analysis. The 2024 election in the USA is likely to be incredibly tight and increase political uncertainty. Reference is first made to the fact that the congressional elections coinciding with the presidential election constitute an additional factor of uncertainty. This is reflected in the fact that Congress has been split since the mid-term elections in 2022, with the Republican Party controlling the House of Representatives and the Democrats enjoying a majority in the Senate, which consequently restricts the President’s ability to act.
Examination of Key Policy Areas
The economists of the Coface economics department focus on five main areas: industrial and climate policy, fiscal policy, trade policy, competition between the USA and China, and foreign policy. In terms of industrial and climate policy, Coface identifies a risk in connection with the fact that Trump has announced that he will eliminate tax incentives for clean energy. For Biden, however, these will remain a priority. Regarding fiscal policy, the report states that both candidates are likely to seek to bring significantly increased budget deficits under control. To this end, Biden would try to increase corporation tax, in addition to the rate of taxation on high-income households. In contrast, for his part, Trump is likely to try to extend tax cuts. In terms of trade policy, neither candidate is keen to get behind free trade agreements. Trump has even raised the possibility of a blanket tariff of 10 percent on all US imports.
Foreign Policy Outlook
On the subject of the competition between the USA and China, the economists talk of “out-competing China”, which is likely to remain a key focus of US foreign policy regardless of who emerges victorious in November. All signs point to foreign policy being one of the biggest points of difference between the two administrations. Biden would be keen to restore a multilateral approach and re-establish traditional alliances. However, Trump’s recent criticism of NATO and countries that are failing to meet the 2 percent of GDP rule on defense spending would seem to suggest a less cooperative approach with traditional allies of the USA.
