The November 2024 race is shaping up to be one of the most unusual and consequential in recent US history. The Republican frontrunner, former President Donald Trump, will campaign while defending himself against 91 felony criminal charges across four separate cases. Meanwhile, the unpopular incumbent, President Joe Biden, will tout his record to an electorate sceptical of his age and capabilities. Voters may be eager to avoid a Trump-Biden rematch, but no other candidate has a clear path to either party’s nomination. 

Despite the resilience of the macro economy, US voters are feeling pessimistic about the state of the nation. An historic bout of high inflation, elevated crime rates, and record levels of irregular migration at the southern border, among other issues, have contributed to widespread disillusionment with the political direction of the country. Polls from late 2023 show that more voters trust Trump to handle many of these issues better than Biden. These polls do not bode well for the incumbent but are of only limited utility in predicting 2024 outcomes – still 11 months away – considering the dynamism of American politics and the narrow political divide of the electorate. 

Round two 

Biden maintains significant advantages over his likely opponent beyond incumbency. For one, Democrats have been largely successful in campaigning against Trump and his ideologies in every election cycle since 2018. Trump has been a huge asset in driving turnout among Democrats, and the White House calculates that antipathy towards Trump can close Biden’s enthusiasm gap.  

Second, access to abortion remains a coalescing issue for Democrats, who have repeatedly and successfully campaigned on it since the Supreme Court overturned a decades-long national right to abortion in June 2022. Access to abortion – an issue on which numerous polls show majorities of voters trust Democrats – helped Democrats outperform in the November 2022 mid-terms and have guided them through a string of major victories in special and off-year elections since. Biden will make abortion rights a major theme of his campaign in the hopes of driving turnout among suburban women, a key constituency for both parties. Trump, meanwhile, has struggled to project a consistent message on the issue. 

Third, Trump’s criminal trials are an unprecedented factor in the race. Two of these are scheduled to begin in March and May, and a verdict is likely in at least one before November 2024. While the indictments have not hurt Trump’s standing among Republican primary voters, polls have shown that voters in the broader electorate will be less inclined to vote for him should he be convicted. Biden thus stands to benefit from Trump’s criminal proceedings even if they simultaneously drive turnout among Trump’s base, which will likely be enraged at what they perceive to be political persecution. 

Nonetheless, the polarization of the country as well as structural factors – namely, the Electoral College system – mean that the race will be very close, as demonstrated by multiple recent razor-thin presidential elections. As in 2016 and 2020, the election will almost certainly come down to a handful of so-called swing states – even just a handful of precincts representing a fraction of the electorate – increasing the impact of variables ranging from adverse weather to online misinformation.  

Even if Biden holds on to the presidency, his party is unlikely to fully control Congress. Republicans need to retake just two seats from Democrats to control of the Senate, which they are likely to accomplish given that Democrats must defend several seats in Republican-leaning and swing states. However, Democrats are well positioned to take back the House of Representatives; Republicans need to defend 18 seats in districts that Biden won in 2020, and voters are more likely to cast straight-party ballots given high polarisation. Nonetheless, while a divided or opposition-controlled Congress would limit Biden’s agenda, he would still have wide latitude to pursue his foreign policy and regulatory priorities.  

Foreign policy implications 

Perhaps the largest point of divergence between the candidates will be on foreign policy. A Biden second term would see continuity with the first – this includes maintaining US global leadership through a strong focus on multilateralism and strengthening its alliances. Biden would continue to robustly support the transatlantic alliance and Ukraine in the conflict against Russia, despite difficulties in securing additional funding from Congress. The US would also seek to advance its political, economic and security ties with countries in the Indo-Pacific in an attempt to moderate Chinese regional influence. Biden would prioritise enlisting allies in adopting trade and technology controls against China, as well as invest in regional security partnerships, such as AUKUS and the trilateral Japan-South Korea-US alliance. 

In contrast, a Trump presidency would likely deprioritise alliance building, emphasise transactional and strong-arm foreign policies, and increase American isolationist tendencies by downplaying international institutions. This would threaten disunity among US allies on issues like the Ukraine-Russia War or competition with China. While Trump would likely maintain most of the US trade and technology controls on China – many of which were implemented or initiated under his own presidency – he would likely deprioritise their multilateral adoption, thus decreasing their effectiveness. He would also likely abolish many of the US-China dialogues that were established in 2023, thus increasing volatility in the relationship.   

Regardless of the winner, trade risks would be maintained as the US – and other countries – continue to prioritise restrictions on capital and trade flows in the name of national security, national competitiveness and supply chain resiliency. However, a Trump victory would once again likely inject an additional element of volatility as the US tears up or reworks existing trade agreements with allies and potentially initiates unexpected wide-scale tariff wars to reduce trade deficits, as was the case with the US-China trade war. 

Faith in US participation in multilateral groupings would be severely diminished internationally. Trump would also likely carry out his objectives more decisively than before, as he would be more assured in his decision-making and less amenable to the advice of established foreign policy figures in the Republican party.  

Regulatory challenges and opportunities 

Either administration would present risks and opportunities for businesses. A second Biden term would allow him to cement and expand his climate agenda, including supporting renewable energy production and the clean energy transition. A divided or Republican-controlled Congress is unlikely to pass any new fiscal incentives, but existing subsidies and tax credits for clean energy technologies as designated under the Inflation Reduction Act (IRA) would be safeguarded. The risk of regulatory whiplash with regard to climate would also be lower than under a Trump administration. Even without legislation from Congress, Biden would have the authority to introduce new regulations through executive orders and administrative authorities – at least insofar as these survive scrutiny by the US Supreme Court. The Securities and Exchange Commission (SEC) and Environmental Protection Agency (EPA) would be most active in issuing new climate-related rules for businesses.   

However, general regulatory risks would likely be higher under a Biden administration as he seeks to pursue his agenda through executive action. In addition to climate, Biden would focus on antitrust action and labour rights, leading to more compliance requirements and government prosecutions of offenders in these areas. While a second term would give Biden more time to install federal judges and civil servants, Senate Republicans – should they control the chamber, as is likely – would block many of his nominations, increasing institutional competition and leading to a further erosion of norms and administrative capacity in some areas.  

Trump, on the other hand, would roll back many elements of Biden’s domestic agenda. Under a unified Republican Congress – which could accompany a Trump victory – he would likely attempt to repeal the IRA and halt the distribution of green subsidies and incentives that have not yet been allocated.  While businesses would lose significant subsidies, financial incentives and tax credits from the repeal of the IRA, the rollback of burdensome climate-related regulations – such as emissions standards or the SEC’s proposed climate disclosure rules – would reduce compliance costs for businesses, especially in the fossil fuel, power generation, automotive and manufacturing sectors. Trump would implement a widespread deregulatory agenda, seeking to cut red tape across the federal government for the benefit of a wide range of industries.  

However, Trump would also make significant employment cuts in the federal bureaucracy and install political allies throughout the administration as part of a strategy to shrink the government and limit its administrative capacity. This would increase operational risk as lowered administrative capacity would impair the business environment, with some companies and actors close to the administration and its allies getting preferential access. 

Under either administration, the regulatory patchwork between Republican and Democratic states will be sharpened. Republican-controlled states would push back on Biden on various regulatory and climate policies, while Democrat-controlled states would aim to retain and strengthen Biden’s climate agenda under Trump. This trend has grown in recent years as rising political polarisation drives one-party control over more state governments. Companies will increasingly need to navigate diverging state and federal regulatory agendas. 

No matter the result, the 2024 election will underscore the volatility of the US political system. Elections have become increasingly relevant for global businesses; US allies and adversaries as successive administrations make sharp changes in foreign and regulatory policy. Despite the familiar names on the ballot, the risks to businesses are unprecedented.  

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Paolo Musto

Paolo Musto

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