Trump or Harris: The US poll results will have profound economic effects
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Subscribe to enjoy similar stories. The outcome of November’s US presidential election will have profound consequences for democracies worldwide and for geo-political flashpoints like Ukraine, the Middle East and Taiwan. But the potential economic fallout could be equally far-reaching.
In today’s interconnected global economy, with supply chains stretching across continents, policy missteps in the United States could reverberate around the world, fuelling trade wars, inflation and unemployment. Election campaigns are rarely conducive to sound policymaking, as candidates often make ambitious promises without considering their feasibility. This is especially true of the 2024 US election, with studies suggesting that both Democratic and Republican policies are likely to increase the deficit over the next decade.
The focus on short-term fixes and immediate relief could have a significant impact on America’s long-term fiscal health. According to the Penn Wharton Budget Model, Vice-President Kamala Harris’s economic policies could raise the federal deficit by $1.2 trillion by 2034. While alarming, this figure pales in comparison with the potential impact of former president Donald Trump’s proposed policies, which are expected to increase the US deficit by $5.8 trillion over the same period.
Harris and President Joe Biden have been heavily criticized for presiding over America’s highest inflation in 40 years. But inflation has fallen dramatically since peaking in June 2022, prompting the Federal Reserve to cut its policy interest rate by 50 basis points last fortnight. Despite this, Trump continues to attack the Biden administration over price increases, promising to tame inflation by, for example, expanding domestic oil
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