June 2024 | The US election rematch between President Biden and former President Trump will focus market attention on their respective agendas. There is a range of potential economic and foreign policy changes that could emerge in their second term, as well as the repercussions for financial markets. The candidates' foreign policy agendas could lead to a range of outcomes. An escalation of protectionism, particularly higher tariffs, may provoke retaliation. In this paper, we assess five policy areas based on the candidates' current comments: foreign policy, trade, taxes, immigration and energy. While rhetoric may not always translate into action, stated policies offer valuable insights into the two candidates' thinking.
01 | A second term for President Joe Biden will likely see the US continue to be deeply involved in geopolitical hotspots, while pressuring allies to share the burden. Foreign policy under Donald Trump may be less predictable, with intensified economic sanctions and a less certain commitment to allies.
02 | Tax policy will be a key issue, with neither candidate proposing a clear path to US debt sustainability. Trump will prioritize extending his 2017 Tax Cuts and Jobs Act, while Biden will likely seek to cut taxes for low-to-middle-income earners and raise taxes for high-income earners and corporates.
03 | Equity markets may perform better under a divided government, as contentious tax increases and aggressive trade policies are less likely to be implemented. Both agendas could lead to higher deficits that will push up debt and Treasury yields.
Unless otherwise stated, all information contained in this document is from Amundi Asset Management US (Amundi US) and is as of June 7, 2024. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi US and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. Amundi Asset Management US is the US business of the Amundi Asset Management group of companies.
