What would be the impact of Trump’s re-election or Biden’s election victory? Both would probably focus their efforts after the election on supporting the economy on its recovery path. Biden, in particular, has repeatedly advocated a stronger role for the state – he would increase government spending substantially. He wants to finance this with higher taxes for companies and wealthy citizens. Trump, on the other hand, is likely to remain true to his course: He wants to use tax cuts to give the economy a boost again.
Even if the approach to fiscal policy differs between Trump and Biden in this respect, the election result would probably not have a major impact on the economy, at least not over the next two to three years. The measures that can ultimately be implemented will largely depend on the composition of Congress. Only with the backing of both chambers could the future US president implement major reforms.
Especially for Trump, the chances of this seem slim at present. Biden, too, will probably be able to count on a narrow majority at best, which could make his work more difficult. But even if Congress were to give him stable backing: economic conditions would probably force Biden to back away somewhat from demands such as a drastic increase in corporate taxes or a doubling of the minimum wage. These apparently served primarily to get left-wing Democrats behind him in the election campaign.
Future trade policy is likely to differ between the two candidates as well, but the tone is more likely to be different: Biden would probably rely more on de-escalation in this area than Trump. But Trump, too, is obviously no longer interested in a renewed escalation in the trade dispute with China. This would ultimately be accompanied by a significant risk for the recovery of the economy and the stock market. No noticeable, distinguishable effects on the economy as a whole would therefore not be expected from trade policy either. However, political tensions with Beijing are likely to continue, regardless of whether Trump or Biden wins.