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Macro Expectations of a Democrat Win

28 October 2020 By Mircea Vasiu

Most national polls in the United States favor a Democrat win. A so-called “blue wave” is about to hit America, and many voices already declare Biden and the Democratic party winners. 

The 2016 Trump’s win left a bitter taste for Democrats. For most of the race, Hillary was winning in polls, and then Trump reversed the course. Since he took over the White House, he and his administration changed a lot of the policies left by the Obama administration. Trump’s four years at the White House have been seen as an error – so what would the world expect from a Biden win?

Implications of a Biden Victory

The first thing that the world expects is for the United States to take back its place in the international arena. Foreign policy changed dramatically since Trump arrived at the White House. Once the NATO leader, America detached from its leading role, with many voices fearing the organization will simply disappear, should Trump win a second term.

Another thing associated with a Biden victory is the “strongmen” trend breaking. From this perspective, a Biden win goes against the trend, as strongmen are popular in the 21st century – think Erdogan, Xi, Putin. By voting against Trump, America would break this trend and regain its position as a leader of the free world.

Europe is particularly interested in a Biden win. Otherwise, it will face a tough price war with Trump, as tariffs are looming. This week the WTO approved an EU request for tariffs on $4 billion of US goods. This is not the way to move forward as retaliation will only lead to an escalating price war with costs for both Americans and Europeans.

China is, of course, on top of the list. So far, Trump’s administration trade-deal with China was one of the main reasons why the stock market did not perform according to its potential. Until the coronavirus pandemic, every time some negative news out of the trade deal with China came out, the stock market tanked. A Biden administration would be encouraged to push for China to allow the local currency, the Yuan, to appreciate more, to reflect the strength of the Chinese economy. This way, imbalances will offset automatically without the need for a trade war.

As this article reveals, a democratic win is dramatically different from four more years of Trump at the White House. What will Americans vote? We will find out in less than a week from now.

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