The 2020 Presidential Election in the United States comes as the nation is battling surging coronavirus cases, civil unrest and a lingering economic recession brought by the pandemic. The outcome of the election will not only determine how the U.S. responses to these issues, but will in turn impact global economies and markets as they are closely tired to the world's largest economy.
President Donald Trump and Democratic challenger former Vice President Joe Biden differ largely when it comes to political policies, notably on the economy, coronavirus response, health care, foreign policy and trade.
Candidate Policies
For the Economy, both candidates' forecasts are tied to the outcome of the coronavirus pandemic. Trump predicts that the U.S. economy will rebound throughout the rest of 2020, and will exponential grow in 2021 following the approval of effective coronavirus vaccines and/or therapeutics. The Trump administration has secured hundreds of millions of vaccine doses from lead developers through Operation Warp Speed and plans to deploy them as soon as they are approved by the U.S. Food and Drug Administration.
Biden stresses that the economy cannot fully recover until the country's coronavirus outbreak is contained. Biden's agenda for the economy includes sweeping federal actions to stave off an extended recession and measures to address wealth inequality including increased spending on education, infrastructure and small businesses, as well as raising the national minimum wage to $15 an hour.
For Healthcare, Trump has pushed his plan to replace the Affordable Care Act (A.C.A.) with a plan that includes affordable prices, lower prescription drug costs, more consumer choice and greater transparency. Trump has yet to release this plan. He has also issued executive order that call to end surprise medical bills and protect preexisting conditions.
Biden wants to expand the A.C.A., adding a new public option that would compete with private insurance companies. He estimates that the expansion would cast about $750 billion over the next decade.
For Foreign Policy, Trump has built his foreign policy platform as "America First." Under that policy, Trump has existed the U.S. from the Paris environmental agreement and has harmed NATO relations. Trump is working to end funding to the World Health Organization.
Biden has mocked Trump's approach, calling it "America Alone." He plans to reestablish past ties with the nation's allies.
For Trade, one of the defining aspects of Trump's first term his "trade war" with China. Trump believe's that China is the largest threat to U.S. prosperity, with the first part of his trade deal focused on China buying $200 billion worth of U.S. goods and issuing tariffs on imports. The second part of the trade deal is set to focus on tougher issues between the nations, including Trump's wish to end China's subsidies on state-owned enterprises.
Biden support's the bipartisan "fair trade" abroad policy, and seeks to strengthen U.S. manufacturing through $400 billion worth federal purchases from domestic firms and $300 billion in new support for U.S. tech firms. Like Trump, Biden aims to be tough on China on trade and intellectual property matters.
Possible Outcomes for the U.S. Presidential Election
Biden Victory with Blue Wave:
With a victory for the former vice president and a "Blue Wave" of election wins in both Senate and House, meaning both will have a Democratic majority, Joe Biden will have more chances to achieve his election promises of a tax increase for Americans who make over $400K a year and corporations, as well as a public healthcare push, decriminalization of cannabis and more environmentally focused government spending. This type of victory is also expected to yield a larger coronavirus stimulus bill. Markets that could see growth include ESG investments and gold
Biden Victory no Blue Wave:
Without the assistance of the Blue Wave, Biden will have a tougher road ahead of him passing legislation in a Republican majority or even a split senate. Boards that he's built his platform from will have to be achieved through bi-partisan support or by executive action in order to avoid stagnation. These factors could business to continue relatively as usual, with exceptions when it comes to pandemic legislations and mandates.
Trump Victory with Blue Wave:
President Trump has shown in the past a has issued executive orders in the face of Democratic opposition to his legislature, which means he is likely to pass more policies this way under this scenario. With a Democratic controlled Senate, Trump might still face some opposition to his 2017 Federal Tax Overhaul and be pushed towards Democratic agendas like universal healthcare and environmental legislation which would have to be tackled in a bi-partisan manner. This pairing could also yield a larger coronavirus fiscal stimulus package, as Trump has signaled that he is open to a bigger package than his party members in the Senate have proposed.
Trump Victory no Blue Wave:
If the Trump administration wins a second term, business will continue as usual for the most part, as long as coronavirus pandemic recovery takes place following the approval of a vaccine. This type of victory is likely to yield a smaller stimulus package as a Republican majority Senate would be wary to adding too much more to the national deficit.
