With just over three months until the U.S. presidential election, experts predict that anti-China trade policies to protect domestic interests will continue, regardless of the election outcome. However, they note that the impact could be more significant if former President Donald Trump wins the election.
The Economist Intelligence Unit (EIU), a British economic analysis firm, recently hosted a webinar to discuss the potential financial impacts of the presidential election on key industries. The webinar featured Ana Nicholls, EIU’s director of Industry Analysis; Matthew Oxenford, the lead analyst for sustainability; and Barshari Bhattacharya, the Deputy Director of Industry Analysis.
Participants expected that trade policies focused on countering China and protecting domestic markets would continue, regardless of the party. They all agreed that strategic industries such as electric vehicles, solar panels, and steel would be primary targets.
Bhattacharya noted, “More than 30% of the goods imported into the U.S. are food and consumer products. Items such as furniture and toys are highly dependent on China. As trade barriers increase, rising prices and limited options for businesses and consumers are inevitable, so companies will continue to localize their supply chains.”
Chinese direct-shopping platforms such as Shein and Temu jeopardize domestic markets. They are impacting the U.S. market in particular by avoiding tariffs through the $800 de minimis threshold and relatively selling cheap products.
As a result, American consumers buying directly from China have surged, resulting in complaints from domestic clothing companies and the textile industry. Both candidates would have to address such issues directly.
Participants unanimously agreed that Trump’s policies would have a more substantial economic impact. They mainly focused on his proposed 10% universal tariff. Bhattacharya explained, “Trump emphasizes the trade deficit with China and has a history of imposing punitive tariffs. If tariffs increase, inflation could surpass 4%.”
Attendees also analyzed opposing views on immigration and climate change policies between the two parties. Bhattacharya analyzed, “Both candidates will strive to eliminate illegal immigration, but the Democrats will continue immigration policies focused on labor workers for industries facing shortages, while the Republicans will likely raise the standards for legal immigration and increase deportations.”
The automotive industry will directly suffer from climate change policy. The Democrats will maintain support for electric vehicle and battery production in the U.S., while the Republicans will ease regulations on internal combustion engines and reduce incentives for electric vehicles.
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