DDN Business Insider | Economic implications of Harris-Trump debate: Experts weigh in
Editor's note: Last Wednesday was the second debate of the U.S. presidential election. It was also the first televised debate between the current U.S. Vice President, Democratic presidential candidate Kamala Harris, and Donald Trump. The intense debate lasted for 90 minutes, capturing the attention of all parties involved. What important information was revealed during this debate? How will this impact the election, and how will it affect the economy and international relations?
【Anchor】Hello everyone, welcome to DDN Business Insider. I am Yunfei Zhang. Last Wednesday was the second debate of the U.S. presidential election. It was also the first televised debate between the current U.S. Vice President, Democratic presidential candidate Kamala Harris, and Donald Trump. The intense debate lasted for 90 minutes, capturing the attention of all parties involved. What important information was revealed during this debate? How will this impact the election, and how will it affect the economy and international relations? To discuss these topics, we have invited
Xu Zewei, Senior Economist and Chairman of 91 Financial Information Service(Beijing)Co.,Ltd., renowned economist Song Qinghui, for commentary and analysis. Welcome, both!
【Anchor】The debate between Harris and Trump has sparked strong reactions in both the media and financial circles. First, I would like to ask Mr. Xu, Overall, who do you think performed better in the debate? What important messages did they convey?
After the debate, both Trump and Harris's camps claimed victory. Trump emphasized his hardline stance on immigration, while Harris highlighted her opportunity economy plan and support for the middle class. There were clear differences between the two on issues such as abortion rights, healthcare, and tax policy. Whilst Neither sides proposed new specific policies, both attempted to tag each other with memorable and impactful labels for voters.
However, many American media outlets view Harris as having gained the upper hand in the debate. She skillfully mentioned Trump's pain points and sensitive issues multiple times, such as rising crime rates, the growing trade deficit with China during his presidency, and the fact that many attendees at his rallies felt boring and left early. Furthermore, Harris also cited that many world leaders have mocked Trump in the past, in contrast to her calm, rational, and composed style fora more qualified candidate. Compared to Biden's performance in debates, Harris stood much stronger. In post-debate polls, most believe Harris performed better. Although there may be some fluctuations in polling after this debate, there is still time before the election, and these fluctuations are likely to dissipate. We will continue to monitor the developments.
【Anchor】Yes, so what key governance plans did the two U.S. presidential candidates mainly articulate? Mr. Song, what is your view on this intense clash?
Overall, Harris and Trump are indeed evenly matched, but I observed that during certain parts of the debate, Trump resorted to personal attacks on Harris, such as Biden』s recent negative attitude towards this democratic candidate. I believe this wouldn』t serve him too well.
In this debate, I noted that Trump pointed to that the U.S. economy is in poor shape, and mentioned that the country is facing the worst inflation in history. Secondly, on the immigration issue, Trump maintained his hardline stance, promising that should he be re-elected, he will carry out the largest mass deportation action in U.S. history. Lastly, regarding global warfare, Trump vowed to accomplish peace between Ukraine and Russia within one day, however impossible it may seem, given the current situation.
On the other hand, Harris primarily focused on her support forwomen's right to abortion. She stated that women should be the ones to make decisions about their own bodies, rather than having the government to dictate what they should do. Additionally, Harris's stance on immigration is more moderate than that of Biden and previous Democrats. She supports providing clear pathways for long-term undocumented immigrants to enter the U.S., and will continue to promote some of the rather controversial plans that allows immigrants to legally enter the U.S. and seek asylum under the Biden administration. Finally, Trump』s criminal cases also became the centerpiece of Harris』s counterattacks.
【Anchor】Alright, Some say that a Harris victory will have a positive impact on the U.S. economy, while a Trump victory could pose certain risks. Mr. Song, what do you think about this? In particular, how might this affect expectations for U.S. interest rate cuts on the horizon?
In my view, if Harris wins the U.S. presidential election, it could have a positive impact on the future of the U.S. economy, potentially bringing a significant boost for the market. Harris's economic policies signal a humane approach. For example, she aims to promote healthy economic development in the U.S. by focusing on the middle class and low-income groups. At the same time, she is also concerned for the low-income populations, female workers, small businesses, as well as middle-class families, proposing measures such as paid leave and childcare services to help these groups. She is also addressing housing costs and seeking to tackle the issue of high rents Americans face through rent relief legislations.
However, if Trump wins the U.S. election, it could pose shocks and risks to U.S. economic developments. For instance, Trump's proposed tariff plans and anti-immigration policies could potentially drag the U.S. GDP by about 0.5% next year. Meanwhile, Trump's economic policies might further trigger U.S.-China trade wars, causing disruption to global supply chains, which would then adversely affect the global economy.
Therefore, it appears that this U.S. election will likely lead the Federal Reserve to pursue deeper rate cuts. However, regardless of who is elected for president, the Fed will need to adjust its monetary policies in a timely manner to adapt to the new economic environment.
【Anchor】Yes. So, Mr. Xu, what do you think Harris's or Trump's victory would mean for the U.S. economy?
Trump's policy proposals include implementing lower interest rates and lower corporate taxs, encouraging companies to return to the U.S., increasing oil extraction while reducing regulations on the oil industry, limiting immigration and deporting illegal immigrants, raising tariffs, increasing trade sanctions, reducing regulation on cryptocurrencies, tightening oversight of large tech companies, and decreasing focus on foreign issues like the Russia-Ukraine relationship. These policies may stimulate the U.S. economy to some extent. However, these could also lead to increased fiscal deficits and debt, as well as heightened tensions amongst global trade relations.
Harris's policies may focus more on green economies and equality, offering tax reliefs for low-income groups and raising corporate tax rates from 21% to 28%. She emphasizes the importance of clean energy and environmental justice while opposing trade protectionism, proposing targeted tariffs only on specific products. However, she may also face challenges related to increased corporate tax burdens and international trade frictions.
Regarding expectations for U.S. rate cuts, Trump may continue to pressure the Federal Reserve to lower the benchmark rate to reduce corporate investment costs, to boost investment confidence, and to enhance economic vitality. These could increase market expectations for interest rate cuts. While Harris's policies may focus more on fiscal expansion and direct subsidies to citizens, potentially increasing short-term demand, which could adversely affect bond assets and support the dollar. However, her policies may have a relatively small impact on expectations for interest rate cuts.
【Anchor】Yes, the outcome of the U.S. election will also have significant implications for China that can』t be dismissed. Regarding the series of public statements made by Harris, research indicates that she may advocate for strict controls on semiconductor exports and technology sharing to limit China's technological development, undermining economic globalization. What are your thoughts on this, Mr. Song?
Harris may advocate for strict controls on semiconductor exports and technology sharing to limit China's technological development, which has been the consistent approach by the U.S. In recent years. I blieve that regardless of who takes office, this suppression strategy is likely to continue. Indeed, the U.S. technology blockade against China has been effective in the short term, especially in critical raw materials and equipment supply chains, making it difficult for China to acquire advanced semiconductor production equipment and manufacturing technologies. However, in the long run, this approach will strengthen the technological innovation capabilities of Chinese semiconductor companies and related research institutions, and gradually reduce its dependence on Western technologies.
【Anchor】Alright, Mr. Xu, based on Harris's relevant rhetoric, do you believe that if she wins the election, China's technology industry will face further restrictions? Would this lead to a regression in economic globalization?
First of all, Harris's proposals are not groundbreaking. She is continuing the policies of the Biden administration. This is also part of Harris's strategy to attract votes, by adopting an anti-China stance. Secondly, in her discussions on foreign policy, Harris mentioned competition with China, emphasizing investment in areas such as AI and quantum computing, and the necessity of supporting the U.S. workforce. She hinted on policies that would enhance U.S. position in the global technological competition. Furthermore, the underlying logic is to slow down the pace of China's technological rise through trade blockades, thereby maintaining U.S. global hegemony. However, these actions violate the principles of market economy and free trade, and will inevitably undermine the stability of the global economic order. Historically, China has always faced a situation of technological blockades, but has consistently pursued the path of independent innovation, continuously increasing its investment in technology. By promoting the development of key core technologies, China has been breaking through international blockades. Therefore, these policies will unlikely to hinder China's progress but will instead accelerate China's growth in the field of technology.
【Anchor】Good. Mr. Xu, what impacts do you believe the election of either candidate would have on China's technological development, China's economic development, and the future of U.S.-China relations?
In the past, the Trump administration implemented a series of restrictive measures against Chinese technology companies, such as placing several Chinese firms on the Entity List and restricting technology exports. If he is to be re-elected, he may adopt more aggressive policies to restrict China's technological development, including further limiting technology exports and investments, actively promoting decoupling from China in technology, and possibly increasing sanctions against Chinese technology companies. The Trump administration previously pursued a "America First" trade policy, including imposing tariffs on Chinese goods. If elected, he may continue to push for a trade war with China and seek to further reduce U.S. reliance on Chinese manufactured products.
If Harris is elected, she is likely to continue the Biden administration's relevant policies toward China, potentially continuing to promote competition in the technology sector. She may continue to support investments in AI, quantum computing, and emphasize the importance of international cooperation. Harris may maintain a degree of continuity in technology-related policies but could also strengthen scrutiny and restrictions on Chinese technology companies, especially in critical technology areas. Additionally, she may maintain a tough stance on trade issues and countering China by strengthening partnerships with countries in the Pacific region.
【Anchor】Yes, given the differing governance philosophies of Trump and Harris, Mr. Song, how do you view the influence of their potential victories on the future development of China's industries and U.S.-China relations?
If Trump is elected, his hardline policies towards China could have a significant impact on China's economy and technological developments in the short term, once again casting a shadow over the prospects for U.S.-China relations. For example, the U.S. is likely to impose stricter trade sanctions and restrictions on China. As Trump believes that China is heavily reliant on the U.S. market and the pricing power of international commodities is primarily held by the U.S. and its European allies, the U.S. may leverage these advantages to suppress China.
From past statements, it seems that if Harris is elected, she may not engage in a full-scale confrontation with China. In the context of globalization and interdependence, it is evident that a comprehensive confrontation does not align with the mutual interests of both countries. Thus, we can expect her to adopt a more rational, open, and inclusive approach to resolving disputes and various issues in U.S.-China relations, while maintaining the country's national interests. I believe that Harris may continue the U.S. approach of containing and suppressing China in the high-tech sector, but she will also seek international cooperation in areas such as technology standards and cybersecurity.
【Anchor】Yes, finally, I would like to ask Mr. Xu: After this debate, Trump has also expressed his willingness to debate Harris again. Given the current situation, how do you assess the election dynamics in the U.S.? What are the uncertainties involved?
Currently, Trump and Harris's approval ratings are very close, indicating a highly competitive election. Trump's support stands at 48%, while Harris is at 47%. The statistical margin between them may not be decisive, making the upcoming presidential debates and campaign activities crucial. The number of independent voters in the U.S. is decreasing, and Partisan loyalty is relatively fixed. Key swing states will be very important moving forward. In critical swing states like Pennsylvania, Michigan, Wisconsin, and Arizona, the support for both candidates is very close, and voters from these states will significantly impact the election outcome.
There are many uncertainties, including fluctuations in voter sentiment, the candidates' performance, and external factors such as economic conditions, social issues, and international relations, all of which may influence the election dynamics. Particularly, economic fluctuations, the intensification of social issues, and changes in the media environment could impact voter psychology. Furthermore, the closer an event is to the election deadline, the more likely it is to influence the election. For example, the investigation into Hillary's email scandal occurred shortly before the election, leaving the Democratic Party with little time to adjust, which had a significant impact. If an assassination attempt on Trump were to occur now or a bit later, it would greatly affect voters' perceptions of the candidates, consequentially changing their voting behavior, increasing his advantage.
【Anchor】Alright, after this debate, both Harris and Trump seem to claim they had the upper hand. Mr. Song, how do you view the uncertainties in the U.S. election?
Currently, there are three major uncertainties in the U.S. election. First, there is a tendency towards extreme polarization in American politics. For example, the division amongst voters and public opinion are becoming increasingly evident. During the election process, there may be sudden "black swan" events that could impact the election. Second, the uncertainty in the electoral process is pronounced. For instance, Trump emphasizes "America First," while Harris focuses on inclusive development. These differing policies may make voters choices more unpredictable. Third, uncertainty regarding the election outcome is intensifying. If Trump loses and refuses to accept the election results, the U.S. could potentially face a civil conflict. These situations are all possible.
【Anchor】OK, thank you. That's all for this episode. Remember to follow us on YouTube or download our APP. I'm Yunfei Zhang, thanks for watching, and see you next time.
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