About us > ASN News

US Presidential Election 2024

How will it affect the global economy and the electronics market?

The US presidential election in 2024 is fast approaching and with it a number of questions about the future direction of the global economy and markets. The political situation in the US has far-reaching implications for the whole world, particularly in the areas of trade, investment and economic growth. The US is the world's largest economy and its decisions have implications for all continents. In this comprehensive article, we take a detailed look at the key factors and risks associated with the upcoming election and their potential impact on the global economy and electronics market.

Current economic situation

The global economy has faced a number of challenges in recent years, from the COVID-19 pandemic, which has crippled world trade and disrupted supply chains, to rising inflation and geopolitical tensions. Yet the situation appears to be stabilising and economic indicators are showing signs of improvement. Economic variables have started to return to long-term normality over the past six months after three years of disruption. The question is how long this period will last and whether it will be affected by the outcome of the US presidential elections.

The United States is showing a robust economic performance, outperforming other advanced economies. The US economy grew by 3.1% in 2023, more than four times the growth rate of 2022. The labour market remains strong, with an unemployment rate below 4% for 24 consecutive months, the longest period since the 1960s. Consumers are committed to spending despite high inflation, thanks largely to record levels of savings and rising stock ownership.

Candidates and their economic programmes

The main candidates for the US presidency are again incumbent President Joe Biden for the Democratic Party and former President Donald Trump for the Republican Party. Both have different visions for the country's economic policy:

Joe Biden focuses on supporting the middle class, investing in infrastructure and clean energy, and raising taxes on corporations and wealthy individuals. His administration has pushed through the Inflation Reduction Act to boost the domestic economy and increase resilience to global shocks.

Donald Trump has pushed for tax cuts, deregulation, protectionist trade policies and restrictions on immigration. During his previous tenure in the White House, there were large tax cuts that are due to expire in 2025. Republicans are likely to try to prevent them from expiring.

The outcome of the election may therefore have a significant impact on the direction of the US economy and, by extension, the global economy. The narrowing of the Republican field after the Iowa primary could lead to a more even contest for the party's nomination. Trump's lead in the upcoming New Hampshire primary could shrink to just 3% if the field narrows to him and former South Carolina governor Nikki Haley.

Geopolitical tensions and trade wars

Another factor that may influence the election is the growing geopolitical tensions in the world, especially between the US and China. Trade wars and rivalry between these powers may lead to further disruption of global supply chains and higher prices. A Donald Trump victory could mean a return to tough anti-China rhetoric and the introduction of new tariffs and sanctions.

Foreign direct investment is shifting significantly from China to other countries such as India, Indonesia, Brazil, Mexico, Poland and Turkey. Should Donald Trump win the White House again, tariffs on China and potentially other countries can be expected. The effects of these measures will spill over to the rest of the world and may influence decision-making in other countries.

Geopolitical tensions are not limited to relations between the US and China. The United States has recently engaged in retaliatory strikes against militias and terrorist groups supported by Iran, while much of the world is preparing for elections. More than 40% of the world's population is going to vote in 2024, with isolationism and further fragmentation of the global economy at stake.

Impact on the electronics market

The electronics market is very sensitive to global economic events. Most electronics manufacturing is concentrated in Asia, particularly in China, so any disruption in trade relations between the US and China could have a significant impact on the sector. Increased tariffs and export restrictions could make electronics more expensive for end customers and slow down innovation in the sector.

The technology sector has become a dominant player in the market due to the pandemic and the need for telecommunications and office software. This year has been a banner year for technology in the artificial intelligence space. Technology has become a geostrategic weapon in our divided world.

Possible trade wars and geopolitical tensions could lead to further decoupling of supply chains between the West and China. This could impact the availability and prices of electronic components and finished products. Companies operating in the sector should diversify their supply chains and seek alternative markets to mitigate potential risks.

Outlook for the future

Based on the available information, the US presidential election in 2024 can be expected to have a significant impact on the global economy and the electronics market. A Joe Biden victory could bring greater stability and predictability in international relations, while a Donald Trump re-election could lead to escalating trade disputes and geopolitical tensions.

A Joe Biden victory could lead to higher taxes on corporations and wealthy individuals and more spending to expand the social safety net, such as investment in childcare. Conversely, a Donald Trump victory would likely mean an effort to prevent the expiration of tax cuts from his previous term and a continuation of protectionist trade policies.

It will be crucial for investors and electronics companies to monitor the election campaign and be prepared for different scenarios. Diversifying supply chains and seeking alternative markets can help mitigate any negative impacts. Investors should focus on long-term growth and follow a strategic asset allocation in their portfolios.

Overall, 2024 will be a watershed year for the global economy and the electronics market. The outcome of the U.S. presidential election will determine the direction the world will take, and companies and investors should be prepared for different scenarios. It will be important to monitor not only economic fundamentals, but also geopolitical developments and the potential escalation of tensions between major powers.

Conclusion

The US presidential election in 2024 will undoubtedly be one of the most significant events that will influence the direction of the global economy and markets in the coming years. The electronics market, which is strongly intertwined with global supply chains and technological developments, will be significantly affected by the election outcome.

Whether Joe Biden, Donald Trump or a possible third candidate wins the White House, it will be important for the new administration to promote innovation, free trade and cooperation between nations. Trade wars and geopolitical tensions could lead to the fragmentation of the global economy and a slowdown in technological progress, which would have a negative impact on businesses, investors and consumers around the world.

Companies operating in the electronics market should closely monitor developments in the election campaign and be prepared for a variety of scenarios. Diversifying supply chains, seeking new markets and investing in innovation can help mitigate any negative impacts and ensure long-term competitiveness.

Investors should consider the long-term perspective and strategic asset allocation in their portfolios. Despite short-term turbulence caused by elections and geopolitical tensions, the technology sector continues to have strong growth potential, particularly in areas such as artificial intelligence, 5G networks and green technologies.

There is no doubt that 2024 will be a year full of challenges and opportunities. The US presidential election will be one of the key factors that will determine the direction the global economy and electronics market will take. It is up to companies, investors and political leaders to prepare for these challenges and work together to create a prosperous and sustainable future.

FAQ

How could the US presidential election affect electronics prices?

The outcome of the election may affect electronics prices mainly through the US trade policy towards China. If trade disputes escalate and tariffs increase, this could lead to more expensive electronics for end consumers. The unbundling of supply chains between the West and China could further erode the availability and prices of electronic components and finished products.

Which sectors of the electronics market will be most affected by the elections?

Sectors that are heavily dependent on manufacturing in China, such as smartphones, computers and consumer electronics, are likely to be most affected. However, the entire technology sector, including firms focused on telecommunications, software development and artificial intelligence, may be affected.

How can companies in the electronics market prepare for the election?

Firms should monitor developments in the election campaign, diversify their supply chains and seek alternative markets for their products. It is also important to have contingency plans in place for different scenarios. Companies should consider investing in innovation and new technologies that will help them remain competitive in the event of disruptions to global trade relations.

Which election outcome would be most favorable for the electronics market?

In the short term, Joe Biden's victory would probably be the most favourable for the electronics market, as it could bring more stability and predictability in international relations. In the long term, however, it will depend on the specific policies and measures that the new administration puts in place. For the technology sector, encouraging innovation, investing in research and development and creating a favourable regulatory environment will be key.

Will the elections affect other sectors of the economy?

Yes, the US presidential election will impact the entire global economy, not just the electronics market. For example, financial markets, the energy sector, the automotive industry and healthcare will also be affected. The outcome of the election may affect regulations, tax policy and government spending in these sectors, which will have an impact on businesses, investors and consumers around the world.