The article talks about how the upcoming U.S. election matters not only for the American people and the country’s economy but will also have a significant impact across the Atlantic. Europe’s financial markets and economic prospects will be affected by whoever is in the White House after the vote.
It is possible that the losing side may take it to streets and the matter may have to be resolved by the Supreme Court in the end and this could temporarily hit markets and consumer confidence in United States and beyond. Steen Jakobsen, chief economist at Saxo Bank, said that the markets are underestimating the possibility of a contested election and can disrupt the markets if they don't prepare for it.
“Another issue at stake is trade. If Trump is re-elected there are fears he could start a trade war with Europe, as he has previously threatened to do, claiming last year that Europe has in many ways treated the U.S. worse than China. A trade war would be damaging to both the European and U.S. economies, though the EU stands to lose more if tariffs are imposed on its exports to the States.
A victory for Biden could bring with it another challenge for Europe. According to the article, a “blue wave” Democratic sweep could “potentially pave the way for major tax hikes in the U.S. and excessive labor market regulations that may curtail U.S. trend growth and affect export-oriented Europe.” Biden as president may undo Trump tax cuts, add further tax increases and pursue an expansionary spending and social policy. In contrast, a Biden victory may also mean that the outlook for equity markets outside the U.S. will be positive.
Do you think the U.S. economy will do better under a Trump or Biden administration?
https://www.cnbc.com/2020/10/14/how-the-us-election-could-affect-europes-markets-economy-and-trade.html
1 comment:
The U.S election is definitely going to have an impact on everyone and Europe is definitely one which will be majorly affected. Whoever wins has its own trade strategies and that is bound to make on impact. Tax increases or trade wars are just very small examples of what could happen in the near future as the article states. The U.S economy is so connected with economies of the word and vice versa that predicting the future can be very hard and will unravel in a unique manner as it always does. Overall, a very interesting article.
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