Key Insights
- Deglobalisation, support for U.S. industry, and competition with China—these touchstones are likely to inform trade policy no matter who wins the election.
- Trump would likely focus on trade deficits and use trade as a negotiating tool. Harris would likely favor a multilateral approach to competing with China.
- For investors, understanding companies’ exposure to overseas supply chains and their potential to increase prices in response to rising costs will be critical.
Deglobalisation, support for key domestic industries, and economic competition with China—these touchstones are likely to inform U.S. trade policy whether Democrat Kamala Harris or Republican Donald Trump wins the election.
But how each of the major-party presidential candidates would seek to make free trade fairer from the perspective of U.S. interests differs dramatically in scope and approach.
These divergences could have important implications for markets, industries, and geopolitics during the next president's time in office and beyond.
A Trump presidency would likely focus on trade deficits
Former President Trump and some of his key advisers have tended to regard significant trade deficits with other countries as potential signs of unfair competition and a detriment to the U.S. economy.
During Trump's four years in the White House, his administration sought to alleviate some of these imbalances by imposing tariffs on roughly USD 380 billion worth of imports, the bulk of which were from China.
In the runup to the 2024 election, Trump repeatedly has floated a 10% border tax on all goods coming to the U.S. from abroad and a tariff as high as 60% on imports from China.
Setting aside feasibility and the specific numbers, these pronouncements signal that a second Trump administration likely would take an aggressive stance on trade policy that would extend beyond China.
Such an approach could set the stage for extracting concessions, either on trade or to further other policy objectives.
Trade restrictions focused on specific industries or companies could also be in the cards, along with efforts to institute stronger rules on goods' country of origin.
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