Results of a Biden or Trump win by Investing.com

It seems that Joe Biden and Donald Trump are preparing to compete once again in the presidential election. The Senate is expected to become majority Republican and the House of Representatives to become majority Democratic. The different economic policies proposed by the two candidates will greatly affect areas such as international trade, government spending and taxes, immigration, sectoral government support, and the enforcement of laws that prevent companies from unfairly restricting competition.

If Donald Trump is re-elected as president, the US is likely to engage in more restrictive trade practices. Trump has suggested imposing higher tariffs on goods imported from other countries.

JPMorgan strategists predict that while these taxes will increase government revenue from customs duties, they will lead to higher prices for consumers by 1.1% and 1.5% for each tax, respectively.

“Shifting the analysis from a simple model to a more complex model would significantly change the estimated impact of the tariff on Chinese goods. It may be simpler for companies to find alternative suppliers from countries other than China than to completely replace existing imported products,” the analysts wrote in a report.

On government spending and taxes, analysts say President Biden’s plan includes a series of tax cuts for individuals making less than $400,000 established by the Tax Cuts and Jobs Act, while restoring higher tax rates for higher earners.

Biden plans to raise the corporate tax rate from 21% to 28% and raise the tax rate on US companies’ low-tax foreign earnings to 21%.

On the other hand, Donald Trump has not offered detailed plans for his tax policy. Trump has expressed support for significant tax cuts that would benefit all types of individuals and businesses.

Applicants have very different immigration policies. Biden tightened entry rules but held immigration numbers steady, while Trump promised to close the border with Mexico and “begin a large-scale removal of unauthorized immigrants already in the country,” the statement said.

In terms of sector-specific government support, the Biden administration encouraged the transition to environmentally friendly technologies through legislation such as the Inflation Reduction Act and the CHIPS Act, which led to large investments in semiconductor manufacturing and clean technology.

“This legislation provided essential support for business investments in what would otherwise have been a difficult environment for capital expenditures,” JP Morgan noted.

However, a Trump administration could threaten these investments by opposing policies that favor environmentally friendly technologies, which could deter investment in these critical sectors.

Still, analysts believe it’s a manageable risk for two reasons: Repealing the deflationary law would require Republican control of the Senate and House, which is considered unlikely, and because a significant portion of the law’s spending is inflation and the CHIPS Act in Republican-dominated areas, it could dampen opposition.

Another aspect that is differentially affected by election results is the application of competition laws. Biden has adopted a strong enforcement policy against big tech companies like Google (NASDAQ:) and Meta. Instead, analysts expect a Trump administration to adopt a more lax approach that would ease the regulatory burden on large companies.

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