Economists have already started dissecting party programs as the Democratic Party presents its finest face at the DNC, which gets underway on Monday.
As of right now, a Washington Post-ABC-Ipsos poll indicates that Republican nominee and former president Donald Trump and his running mate, U.S. Senator from Ohio J.D. Vance, have a slight national lead over Democratic front-runner and vice president Kamala Harris, who is expected to win the party nomination on Thursday night, and her running mate, Minnesota Governor Tim Walz. As of August 18, a CBS News/YouGov Battleground Tracker had Harris leading Trump with predicted 225 electoral votes, while Trump had 219 votes. Among the crucial battleground states that are still up for grabs are Arizona, Georgia, Michigan, North Carolina, and Pennsylvania. It feels like Florida is swinging for Trump while Minnesota is leaning toward Harris.
In the meantime, some economists are delving into the declared political platforms of the contenders and how they might affect trade and tariff policies.
In a research note released on Thursday, the chief economist of Goldman Sachs’ global economics team concluded that while higher tariffs on Chinese goods could lead to the possibility of a global trade war with “significant impacts” on trade and growth, higher tariffs on goods from other nations could raise the cost of consumer goods imported from the United States.
If former President Donald Trump is re-elected, the Goldman Sachs team anticipates “significant increases” in tariffs on China, which it given a high probability at 90 percent odds. This might have the effect of slowing growth and raising inflation in key countries like the U.S. and Europe.
The research added, “In addition, changing trade policy could force businesses to reconsider their supply chains, resulting in a reallocation of global trade that helps some countries but hurts others, especially China.” According to the analysis, trade might be reallocated across different economies in response to higher tariffs. Trade reallocation caused by tariffs would benefit Mexico and Southeast Asia, but moves in net trade toward lower-cost nations would be detrimental to China and other East Asian economies.
TD Cowen Washington Research Group managing director Jaret Seilberg stated on Friday that if vice president Kamala Harris wins the US presidential race, she is likely to carry on Joe Biden’s significant regulatory initiatives. She probably favors moderation, in our opinion. Furthermore, Seilberg stated, “We believe she has a more conventional perspective on trade and monetary policy.”
As for Trump’s “10 percent tariff is off the table along with the potential labor supply shock of deporting millions of undocumented immigrants,” Seilberg’s colleague and Washington analyst Chris Krueger is predicting differently.
On the other hand, Permanent Normal Trade Relations (PNTR) with China, which were established following China’s 2001 entry into the WTO, might be repealed in the event that Trump wins. Krueger cited data from the U.S.-China Business Council that predicted, should Trump win and get the PNTR repealed, a broad increase of the present tariffs from 19 percent to 61 percent—with following Chinese retaliation.
In addition, Krueger predicts a significant effect on the labor market in the event that Trump wins and proceeds with the greatest deportation campaign in American history. This could open the door to additional policy changes in line with the GOP Platform, such as the removal of TPS (temporary protected status) for hundreds of thousands of people and DACA (deferred action for childhood arrivals), the reinstatement of “Remain in Mexico,” and the return of the “Travel Ban,” which targets immigration from particular countries among other prohibitions and restrictions on entry into the United States.
