EHIME ALEX, Lagos
Though the coronavirus pandemic has dealt a big blow to countries economies, the United States presidential election in November is likely to have a significant impact on the global economy, business environment, and geopolitics in general, Deloitte’s team of economists said.
In an analytical report on Wednesday posted on Deloitte’s official website, the experts said the world view of the two U.S. presidential candidates could hardly be more different.
They observed that Trump has turned the table, endorsing restrictions on trade and immigration, dismissing alliances and treaties, and focusing on a mostly domestic agenda.
In contrast, they said Biden has spent half a century in politics supporting the post-war bipartisan consensus.
The experts argued that if Trump is reelected, he would likely continue to see trade as a zero-sum game, restrict investment from China, and dismiss alliances such as the North Atlantic Treaty Organization and organisations such as the World Trade Organization.
Observing further that Trump will continue to restrict immigration, the experts said, “This implies more isolation and protectionism for the United States and, potentially, a vacuum in geopolitics that could be filled by other powers, such as China”.
But if Biden is elected, they said, it is likely that the U.S. will, in part, return to the old consensus.
“This will mean a renewal of the Atlantic alliance and a bias toward freer trade, migration, and cross-border investment. It will also likely mean a return of the United States to the World Health Organization, the Trans-Pacific Partnership, the Paris Accords, and the Iran nuclear deal,” the experts stated.
The team noted however that on trade, Biden will face obstacles and will have to navigate differences within his own party.
In a recent interview Biden was asked about Trump’s tariffs on China, he said he would “re-evaluate the tariffs upon taking office.”
According to the experts, being hard on China is currently popular in the U.S., because of both a perception that China’s trade policy has hurt the United States and concerns about human rights issues.
“Moreover, within the Democratic Party, there is a strong protectionist sentiment among many, especially in the labor union movement as well as among the far left who see freer trade as mainly benefitting big business. Thus, Biden, who’s instinct is likely globalist based on his Senate experience, must avoid being seen as too globalist within his party,” the expert warned.
The Deloitte’s experts noted that the current situation is quite different from the past.
“Over the past half century, almost every US president was inclined toward freer trade and stronger alliances. Often, they or their parties faced opponents who complained that these policies were damaging to the country.
“Yet those opponents, upon taking office, usually reverted to globalist policies. For example, Bill Clinton ran against the first President Bush on a relatively protectionist platform, only to push for freer trade once in office.
“Likewise, Barack Obama ran in 2008 complaining that the second President Bush was too inclined toward free trade, only to push for more free trade himself.
“This time, a Democrat is running against a decidedly, and historically anomalous, protectionist Republican. He faces an electorate that, according to polls, is strongly suspicious of China but is still supportive of the benefits of trade. Navigating this will be tricky not only during the campaign, but even after becoming president should he win,” they added.
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