A Primer: Trump vs Harris - Why do we love/dislike them?

US citizens are getting ready to head to the polls this November just as the US presidential race starts to heat up following multiple false starts. With the candidates from the Republican and Democrat parties now confirmed, they can start advocating their strong positions in charting US's future. The Republican's candidate, Donald Trump, takes a bold, confrontational and sometimes controversial approach whereas the Democrats' champion Kamala Harris' progressive approach is seen as a continuation of current President Joe Biden's administration. With their contrasting policies and views, the upcoming debates will determine the path that the USA will follow, at least for the next 4 years. We will be putting out a few articles related to the US presidential elections and how traders and investors alike can take advantage of such an event.

Donald Trump was the 45th president of the United States and is the current Republician nominee in the presidential election of 2024. Trump's boldness in his unfiltered communication style and dismissal of poltical correctness resonated with many voters previously. His outsider status, alongside his direct yet unconventional approach, has garnered him support from the voters in 2016. Having lost the 2020 presidential election to Joe Biden, he is back once again, seeking a 2nd term as President. It remains to be seen whether Trump would be able to replicate success seen in the 2016 election and reclaim the presidency in the 2024 election.

JD Vance was elected to the Senate in the 2022 midterm elections, and currently serves as a US Senator from Ohio. As a member of the Republican Party, Vance was selected by Trump, to be his running mate in the 2024 presidential election. While intially opposed to Trump being the US president back in 2016, Vance eventually starting being more vocal in expressing strong support for Trump's populist and nationalist policies, which has largely contributed to him being selected as Trump's running mate this time round.

Trump's playbook for his 2nd run continues to build upon his 2016 policies, maintaining his core themes on tax cuts, deregulations and trade protectionism and stringent immigration policies. The main theme for his policies this time continues to push the importance of nationalism, putting Americans first by strengthening and giving the homeground advantage to American industries and jobs. These policies are generally protectionist.

Trump promises to "defeat" inflation, by extending the 2017 tax cuts he implemented. His proposal to remove taxes on tips and social security benefits has garnered him support from the public who are currently suffering from financial burden due to the rising inflation and cost of living (Lobosco & Luhby, 2024). Given the sticky inflation, Trump and his supporters believe that these tax cuts will serve as a form of economic stimulus to increase job opportunities and increase business incentives for American businesses. Further, any form of tax cuts may also encourage consumers to increase their spending. Such economic growth in the US ideally will more than pay for the tax cuts proposed.

When it comes to protectionism, no one does it better than Trump. Or so he claims. "Drill, Baby, Drill"! Rehashing his previous rhetoric, he promises to slash energy prices in half and encourage further production of domestic oil and gas so as to turn the country into a self-sufficient energy source and at the same time, become an international influence in energy exports (Kennedy, 2024). Additionally, as part of his goal to "Make America Great Again", Trump aims to protect protect American industries and at the same time reduce trade deficit. He made clear that he wants to achieve this by adding tarrifs on at least a 10% on all imports from all countries and another tariff upward of 60% on all Chinese imports (The Straits Times, 2024).

Vance supports Trump's "America First" vision of implementing protectionist trade policies, arguing for its necessity to protect domestic industry from competititve international competition (Picchi, 2024). Supporters on Trump's side view these tariffs as a tool that will encourage further consumption of domestic goods and in turn reduce the existing trade deficit whilst creating more job opportunities. They believe that by discouraging imports and encouraging the purchase of domestically produced goods, U.S would be on a more competitive edge and stregthen the country's geopolitical influences.

Finally, one other key focus of his current campaign, Trump's immigration policy is something that the world already had the chance of experiencing once. Trump's strong stance on immigration controls and border security aims to "Make America Safe Once Again". Such immigration policies panders to disenchanted voters that are generally individuals who are concerned about migrants stealing jobs or abusing public benefits, at the expense of the 'real' citizens.

Trump has vowed to continue building the border wall and sealing it up, at the same time, going on record to promise the largest mass deportation of foreigners yet. Trump's immigrantion policies, built on the narrative of immigrants "poisoning the blood of [their] country" by utilising public benefits and causing an increase in the number of reported crime, has garnered strong support from his voters (Hesson & Rosenberg, 2024). He plans to suspend refugee resettlement, reducing the number of refugees the US would be willing be to take in and end temporary protected status programs (Axelrod, 2024). With his policy taking on an extreme "nationalistic" approach, his hardcore supporters believe that the influx of immigration will negatively impact national identity and social cohesion. Like Trump, Vance has repeatedly called for mass deportation of illegal immigrants and blames US housing issues on the rise of illegal immigrants (Gooding, 2024).

Kamala Harris is the incumbent Vice President of the United States, serving alongside President Joe Biden. Being where she is now is by no means a small feat. She has made history as the first female, black person and person of South Asian descent to serve as Vice President. Prior to her political career, she gained reputation for her work on criminal justice issues. Harris stepped up to the plate as first pick about a month ago when President Biden signalled that he would withdraw from trying for a 2nd term. Can Harris prove her mettle and take on another new title, as the first female president?

Tim Walz, selected by Kamala to be her running mate as VP is serving as a the Governor of Minnesota since 2019. Prior to this, he was a member of the U.S House of Representatives from 2007 to 2019, also served in the National Guard and was at one point a social studies teacher. Throughout his career as Governor, he has consistently focused on improving education support, protect reproductive freedom of women, reduce taxes for the middle class, expanding paid leaves and direct the city towards clean electricity. His efforts, align greatly with that of Harris and the Democractic Party. His affable nature also puts him in good stead with the progressive voters.

As the current Vice President of the US, political observers are convinced that a Harris and Walz victory would mean that voters will see a continuation of President Biden's policies. Her policies and priorities revolve around fostering an equitable and sustainable society, where she advocates strongly for abortion rights, climate change and affordable living, especially for the middle class.

Harris has long been a strong advocate of gender equality and reproductive rights. She strongly believes in women having the choice to make decisions about their bodies and is also pushing for ways to further support planned parenthood. She has been instrumental in making abortion rights one of the key focus of Biden's initial campaign. Harris has pledged to fight to restore the protections of Roe v. Wade across all states (De Guzman & Ewe, 2024).

Walz, on the other hand, while not strongly pushing the abortion rights agenda, has however been pushing for more support for women-owned businesses and gender equality in the workplace. It is important to note that he has been supporting policies that expand access to contraception and health insurance programs for the low income residents in his state. Healthcare and pro-choice will most definitely be a focus once again this time round.

Harris' climate change policies will see a continuation of President Biden's efforts in climate change, which includes legislation that provides hundreds of billions of dollars in tax credits and rebates for renewable energy and electric vehicles (Euronews, 2024).

Harris and Walz made accomplishments on climate change during their political career, where she placed a crucial role in the passing of the 2022 Inflation Reduction Act and he signed a law stating Minnesota to turn into a carbon-free state by 2040 (Musto, 2024).

With both Harris and Walz history of supporting environmental policies, environmentalists and activists lean towards Harris for her efforts in turning America into a green city. However, it is important to note that there has so far been no clear direction and concrete plans on how Harris and Walz will move forward on polices pushing this agenda. If anything, Kamala's brief mentions of climate change during the DNC 2024 convention seems to be just 'lip service'.

A big part of Harris' election campaign will be focusing on lowering costs for daily living and boosting economic opportunities, especially for the lower and middle class Americans. She and her team has all along believed in shoring up support and assistance instead of focusing on tax cuts. In a stark contrast to Trump's lowering of corporate tax, Harris instead aims to increase corporate tax to 28%, with expected US revenue growth (Kapur, 2024). These additional revenues would be able to create more job opportunities for Americans, to increase employment as a whole and in effect, raise standards of living while narrowing the income gap.

Harris has proposed to restore expanded child tax credit, which positively impacts children in poverty (Luhby et al., 2024). She has also proposed policies to cap childcare costs for families and is currently fighting to establish a national paid family leave program.

To further reduce the burden of the high cost of living among citizens, Harris aims to lower housing costs and make housing across the board affordable for renters. She has also proposed to implement laws to prevent corporation from violating rules on price hikes, encouraging competitive practices in the food industry. Through these interventions, Harris aims to encourage consumption and savings among individuals, and improve the well-being and education of individuals. Her focus on lower and middle class individuals and equitable taxation are attractive, for it focuses on reduction of economic inequalities and provides support for families and individuals. The idea of reducing financial burdens, especially for the sandwiched-class as well as focusing on progressive tax structure instead of tax cuts makes a strong case in voting for Harris and Walz.

To paraphrase William Shakespeare, "All the world's a stage and its people, merely actors". Now that we have been properly introduced to the actors and we know their roles, we can start exploring where the key battlegrounds are. Not in terms of swing states but the policies which will draw or lose the most voters. Some key policy battles will be fought on the following grounds:

1. Fiscal Policies - Tax cuts vs Progressive Tax

2. Foreign Policies - Tariffs, trade wars vs Multilateralism

3. Social Policies - Social Spending and Environmental Infrstructure

While they are ultimately intertwined, I break down as much as possible how the views of the candidates will square off against one another.

While the term 'fiscal' is a broad term, here, we will be focusing on tax cuts, progressive tax and tax credits.

A Trump win will most definitely continue to advocate for further tax cuts especially for businesses and the high-income class. His main argument has always been that lower taxes will stimulate economic growth by means of more investments and jobs created. Also, Trump has been consistent in his attacks on the rhetoric that democrats refuse to cut taxes and that would put a strain on government spending, only putting the nation in a deeper debt crisis. Sectors that can see benefit from Trump's presidency are the financial and industrial sectors, where deregulation and extended tax cuts offer an environment for these sectors to stimulate investment and expansion.

A Harris win will see the government pursue a more progressive tax structure. Here, Harris has been clear about increasing taxes on the wealthy class along with corporations, and using these taxes to fund social programs and at the same time reduce the widening income inequality gap. Further, like Biden, Harris has proposed to expand tax credits for the middle and low-income families. Her approach of taxing wealthy and big corporations could lead to reduced investments in the US and reduced exports of US goods, which limits the growth potential of the economy. All these in pursuit of a more equitable and bearable society.

It is really down to each individual at this point if they prefer to pursue economic growth at the expense of leaving the poor, the lost and the least of society or to sacrifice some economic growth and uplift fellow citizens in light of inflationary pressures and rising costs of living.

The world has had the benefit of already experiencing what life is like under a Trump presidency. Should he win a 2nd term, his approach towards foreign relations would be no different from the first time round. He has already made clear that he will be pushing for more tariffs on imports and also increasing the amount of tariffs levied on Chinese products. Trump has also been known for using tariffs as a tool in trade negotiations.

His push for putting "America First" by imposing such foreign policies in trade, manufacturing and even defence may be able to strong-arm certain trade partners to go along with him. However, a mis-step could also leave America more 'alone' than 'first'.

Interestingly, a Harris win may, at first glance seem to be a more multilateral approach, taking a more diplomatic tone by working with allies and international organisations to improve trade relations and resolve disputes. However, this could not be further from the truth. It is always important to "see what people do, not what they say". Under the current Biden's administration, there has been a coordinated effort with allies to impose increasing tariffs on China. Moreover, instead of stepping back on Trump's previous tariffs against multiple countries, Biden has mostly left them untouched. The current administration has also been taking a more sideline approach to the multiple wars that are happening in both Europe and the Middle East.

Here, supports should note that both parties may have alot to say when it comes to foreign policy and trade. However the actions taken so far can easily tell the more astute voters that both sides are in agreement in the treatment of countries like China.

Finally, there is a lot of noise surrounding immigration policies with Trump having talked about immigrants stealing the jobs and benefits of Americans. Interestingly, Harris is also seen as drifting towards the centre on her views regarding immigration. Surprising some of her own party as she backtracks and vows to take a tougher approach regarding immigration. This is still a developing story.

The biggest contrast between Trump and Harris would be their treatment and attitude towards society and the polices they choose to implement. Here, it will be where both sides will have to work the hardest to appeal to the electorate and convince them.

Here, Trump will push for further reductions in social spending and walkback further on the whole 'Affordable Care Act' (ACA) that was originally implemented by Obama. Trump has always argued that such social spending puts a huge strain on government finances. Previous administrations have overspent and now it is down to his administration to make things right and to draw down the huge government debt. Trump will argue that there will be no president in the history of USA that is able to make such a tough unlikable decision which is absolutely necesssary for the continued survival and prosperity of furture Americans. And while this may be seen as an unfeeling, unemphathetic move, this is much needed to 'Make America Great Again'.

On the other side of the coin, Kamala Harris is all about closing the inequality gap in society by uplifting the poor and middle-income segment of society. And the only way to do so is to use the taxes earned through progressive tax cuts and transfer it to the parts of society that needs it. She aims to achieve this by means of more social relief programs.

The other front that the two parties will clash, will be regarding gender equality and abortion rights.

While Trump's views on the two topics have evolved over time, he is known to still keep a more conservative stance to appeal to the conservatives voters. While he has been trying to push for gender equality, his off-camera actions and remarks towards women (before and during presidency) have often been deogatory and sexist. This most definitely does not help his case as it makes him seem inconsistent. And an inconsistent president is not something that any country needs.

At the same time, Trump is increasingly pro-life despite being pro-choice in the past. During his 1st term, Trump implemented extreme abortion bans and appointed three Supreme Court justices who played crucial roles in overturning Roe v. Wade, this led to guaranteed federal protections for abortion rights being removed.

Over at the Kamala Harris camp, the messaging is clear as day and consistent as well. Her approach to women's rights and gender equality is comprehensive and addresses a wide range of economic issues, thus resonating with many women.

Clearly, America's decision will shape not just their country but also the world's economy and geopolitical relationships in both the short and long term.Now that you have a primer to both candidates and their running mates. Who's polices are you more drawn to and who do you think will win the US presidential election come November 2024? Leave your thoughts and comments below.

Prepared by:

Isaac Lim CMT, CFTe
Chief Market Strategist

This report is provided for informational and general circulation purposes only and should not be construed as an offer, solicitation, or recommendation for the purchase or sale of securities, futures, or other investment products. It does not take into consideration any particular needs of any person. This advertisement has not been reviewed by the Monetary Authority of Singapore.