Joe Biden appears to have won the presidency, narrowly capturing enough of the swing states he needed, particularly in the Midwest.
Several states might end up undertaking mandatory recounts, but Biden’s leads in those states are nevertheless big enough to make it unlikely the results will be overturned. The Senate picture is not complete yet either and won’t be until early next year, but we would be surprised if the Republicans lose either of the two run-off elections required in Georgia.
As the Republicans will still control the Senate, most of Biden’s policy plans are dead on arrival. There will be no tax increases on corporations or higher income earners, no green new deal-style infrastructure spending, no near-doubling of the Federal minimum wage and no major health care reform. But a Biden administration could still pursue tighter regulation of the financial and energy sectors simply by restoring the teeth of the regulatory agencies for those industries.
We expect Biden to pursue a closer relationship with the European Union, in part to build alliances that could be more effective in countering the growing global influence of China. More generally, while Biden will be less protectionist than Trump, we don’t expect him to enthusiastically embrace renewed globalisation. The upshot is that, regardless of who is President, US-China relations are likely to remain tense.
Trump vs Biden: The Aftermath
In the immediate wake of the 3 November vote, Paul Ashworth, Michael Pearce and Andrew Hunter from our US Economics service were joined by Senior Markets Economist Oliver Jones to discuss the election outcome. While acknowledging that many headline results were yet to be announced, the team’s discussion took in the market reaction so far, likely scenarios – including the implications of possible legislative gridlock – and paths ahead for the US economy and markets.