Just a few months remain until the 2024 U.S. presidential election, and markets throughout the world are anxiously watching the political scene develop.
The U.S. is a major player in international trade, investment flows, and economic trends because it is the anchor of the global economy. Thus, this election is not just a national but also a worldwide event with profound effects on trade dynamics, geopolitics, and economic stability.
With a GDP of more than $25 trillion, the U.S. accounts for nearly 25% of the global economy. This economic influence has an impact on global financial markets, with 28% of institutional traders citing election-year volatility as their top concern for 2024. The November 2024 presidential election is expected to shake global markets even more than a typical U.S. presidential election year, with various countries voting on hotly contested and important issues. The volatile markets are anticipating the stability that November will bring, with trade policy and environmental commitment being the two most significant global tipping points.
International trade has historically been impacted by U.S. tariffs and trade policies.
2018 saw a 0.3% decline in GDP because of the Trump administration’s tariffs against China, which seriously disrupted global supply chains. Despite not making much of an effort to oppose these tariffs this term, the Biden administration has been more critical of Trump’s trade policies after his 2024 State of the Union speech. China’s and the U.S.’s trading partners will be impacted by the election’s effect on trade restrictions.
Due to tighter regulations, Mexico’s export percentage to the U.S. grew, positioning it as this year’s top import source. However, because of its reliance on China for supply chains, Europe found it difficult to profit from U.S. hostility toward China. While European businesses are currently reducing their exposure to China to de-risk their supply chains.
One major source of controversy is U.S. leadership in the climate movement.
Worldwide investments in renewable energy have increased since the Biden administration’s re-entry into the Paris Agreement and the passing of the Inflation Reduction Act in 2021, when the worldwide renewable investment market grew by almost 50%. The Trump administration’s reluctance to implement drastic climate expenditure measures, however, is due to geoeconomic issues like the swift uptake of electric cars (EVs).
Concerns regarding China’s dominance over EV components have caused many Western countries, including the U.S., to postpone enacting pro-EV measures. While Trump has not yet said if he will withdraw from the Paris Agreement, he has embraced some of Biden’s climate proposals. The U.S.’s election decision in November will probably influence global energy markets and green technology.
The 2024 U.S. presidential election will be a pivotal moment with significant implications for global markets.
The direction of U.S. trade and environmental, fiscal, and foreign policies will shape global economic landscapes, affecting everything from market volatility to international trade dynamics and ecological investments. As the world watches, the decisions made by U.S. voters will resonate far beyond American borders, highlighting the global stakes of national elections in an interconnected world.
