Mertkan Oruc
25 October 2024•Update: 25 October 2024
ANKARA
Less than two weeks before the US presidential election while the race is close between Republican candidate former President Donald Trump and Democratic candidate Vice President Kamala Harris, whose economic stances largely differ, experts say a potential Trump win in November could be the “worst-case scenario” for the EU and China.
The seven swing states—Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin—will determine the election outcome, with estimates showing that Trump may be slightly ahead of Harris.
Levent Aydin, professor of economics at Ankara Social Sciences University, told Anadolu that the election’s outcome may affect not only US domestic economic policies but also trade relations and economic systems worldwide.
Aydin noted that Trump adopted the “America First” approach during his previous term, and the trade war he launched against China resulted in supply chain disruptions worldwide and strained the US trade relations with allies.
“Trump’s protectionist policies and high tariffs resulted in a contraction in the global trade volume, fueling uncertainties around the world—In this election, Trump said that he would encourage companies to bring back their production from overseas to the US by imposing high tariffs on Chinese imports to the country, and he also said that ‘tariff’ is the ‘most beautiful word in the dictionary,’” said Aydin. “He will continue with the same policies from his previous term.”
Aydin highlighted that Democratic candidate Vice President Kamala Harris may adopt policies more favorable to free trade, a continuation of the Biden administration.
He noted that the US might not engage in trade wars under a potential Harris administration and could take a more cooperative approach in international trade, strengthening trade agreements with the EU and other strategic allies to boost global trade.
Aydin stated that the presidential candidates may influence the Fed’s monetary policy decisions, with a potential Trump administration favoring economic growth through low interest rates and a Harris administration possibly advocating tighter monetary policies until inflation stabilizes at the 2% target by mid-2025.
“Harris aims for more sustainable global growth via green energy efforts and international cooperation, while Trump wants to strengthen the economy through protectionist trade and a fossil fuel-oriented approach,” he said.
“The positive and negative elements of both candidates’ programs could impact the world economy’s future in global trade, energy markets, climate and environmental policies, and international cooperation,” he added.
- Trump victory may cut EU exports, dent China's growth
Filiz Eryilmaz, economics professor at Bursa Uludag University, told Anadolu that the Fed’s monetary policies influence the entire world, and the new president’s interest rate policy will be critical, especially for developing nations like Türkiye.
Eryilmaz stated that Trump’s unpredictable behavior in international relations could create an uncertain global atmosphere with protectionist policies at the forefront.
“Trump’s coming to power is the worst-case scenario for China, however, a Harris victory would also mean that a trade war with China would continue, though not as harsh as it would be under Trump,” she said.
Eryilmaz noted that European Central Bank (ECB) President Christine Lagarde has recently emphasized the potential impact of trade wars and tariffs on the EU if Trump wins.
“There is a serious recession in the EU and the region’s biggest weakness is in its exports—the EU exports to both the US and China, and Trump’s coming to power would directly decrease EU exports to the US,” she said.
“China’s growth is important for the EU as its main export market, and if the US further raises tariffs on China, the country’s growth could be even lower and it would indirectly hit a blow on Europe,” she added.
Eryilmaz underlined that the Russia-Ukraine war would likely shift toward peace in a scenario where Trump wins, which could positively impact the EU economy.
She mentioned that Trump’s policies could favor a stronger US dollar, potentially weakening the euro.
*Writing by Emir Yildirim in Istanbul
