As the global leader, geopolitical influences introduced by the U.S. affect national relationships, armed conflicts, and, of course, foreign markets and economies. Understanding this, it’s not surprising that U.S. trade policies and foreign markets are highly interconnected, and when U.S. leadership shifts, there are often profound election effects on global trade. This is certainly the case during this year’s upcoming presidential election. Kamala Harris, the Democratic presumed candidate, approaches trade and foreign policy differently than the Republican nominee, Donald Trump. Depending who wins the election, businesses must be prepared to adjust accordingly to new changes.
Interestingly, both candidates do not disagree on everything when it comes to trade policies and foreign markets. In fact, there remains common ground in many areas. But at the same time Democratic and Republican philosophies differ enough in these areas to affect strategy, and in some areas, there are certainly some differences of opinion about how trade agreements should be pursued. Given this, it’s worth recognizing how each candidate’s views about trade could paint a future picture of foreign markets. Election effects on global trade will occur regardless of who wins the U.S. presidency. However, changes could move in significantly different directions depending on the victor. And businesses should be prepared to react accordingly.
Partisan Perspectives and Trade Policies
Trade policies and foreign markets are intimately connected regardless of the nation in question. If one country raises import tariffs or structures a regional trade agreement, global markets will react. But the impact that U.S. trade policies have on these markets tends to be more profound. Given that the U.S. has the strongest economic influence, this is not surprising. This is why election effects on global trade occur with each passing presidential contest. This will certainly be the case as Harris and Trump vie for the presidency. Both candidates wish to enhance U.S. trade positions in the global economy, but their approach is drastically different. By understanding partisan perspectives in this regard, it becomes easier to anticipate how global markets might react.
From a Republican standpoint, Trump embraces American protectionism when it comes to trade policies and foreign markets. In essence, this means his policies strive to protect U.S. jobs and ensure domestic workers have opportunities for employment first. It also means having a commitment to eliminate the trade deficit with other countries. In an effort to make “America first,” Trump proposes raising import tariffs to 10% across the board except for China, which would have 60% tariffs. He also opposes many existing trade agreements with other nations since he sees the terms as placing America at a disadvantage. If elected, the election effects on global trade from these policies could be profound. Trade would likely shift benefitting domestic jobs and markets while foreign markets could contract. There is also a chance penalties against companies outsourcing business processes to foreign countries could be imposed. Business might therefore need to adjust their market strategies accordingly for this election outcome.
On the Democratic side, Harris embraces trade policies that are much less protectionist in nature. Her trade policies and foreign markets’ perspectives aren’t completely different from Trump’s however. She also opposes economic and trade dependence on China, and she is antagonistic to China’s anti-competitive practices. But at the same time, her trade policies are much more focused on worker protections and environmental safeguards. She also embraces world trade agreements that could promote global economic growth. In this regard, Harris’ policies could expand trade globally for businesses but demand social and environmental protections as well. Opportunities for outsourcing business processes and manufacturing could increase as a result, but there may also be higher trade-related costs as well. Election effects on global trade should Harris win the election would be notably different as a result.
Additional Foreign Affair Policy Platforms
In addition to basic trade policies and foreign markets perspectives, both candidates also have international affairs agendas. For Harris, investing in foreign alliances is valued to strengthen America’s position globally. This involves supporting NATO and also continuing to support Ukraine’s efforts against Russia. However, Harris also believes countering China’s influence in Africa, Indonesia and the Pacific is a priority. For Trump, his foreign affairs position also is antagonistic to China’s global influence. But he is less enthusiastic about foreign alliances, especially if such alliances are unfavorable to the U.S. financially. As such, he would likely place additional pressures on NATO and even act independent of the alliance if needed. Thus, each candidate’s foreign policy platform share some similarities but also some key differences.
In terms of election effects on global trade related to these foreign affairs positions, there could be some major shifts. For example, a Democratic victory could favor stronger global markets with nations participating in NATO and other alliances. In contrast, a Republican win might result in a contraction of these same markets. This would be particularly true if higher U.S. import tariffs are imposed for all nations. At the same time, geopolitical participation at a higher global level could lead to the U.S. involvement in various conflicts. This could undermine global trade and supply chains while imposing higher trade costs. In theory, protectionism and a less-involved U.S. globally might be less risky in this regard. Predicting these effects can be challenging. But election effects on global markets based on these policies will certainly occur.
Planning a Global Market Strategy Post-Election
When it comes to developing a global trade strategy, it’s evident that there will be significant election effects on global trade. Different trade policies and foreign markets’ response to these varied policies will force companies to adapt. For example, outsourcing business processes and manufacturing could be met with resistance or encouraged depending on results. Likewise, broader markets and opportunities to expand may occur, or these may contract based on overall shifts. In this regard, it’s important for companies to develop a global strategy that can adjust to election outcomes. And relying on experts and key partners for strategic planning can be a valuable decision.
Outsourcing is essential for business growth–read why in this Bold story.
