The 2024 election year
There are many elections in 2024, from Taiwan in January to the US presidential election in November. As many as 40 national elections are in 2024. In total, 41 per cent of the world’s population and 42 per cent of GDP will vote.
Given the geopolitical dynamics of recent years, the stakes are high. The outcome of the elections directly affects the course of the war in Ukraine and Israel’s fight against Hamas. Elections could also mark a turning point in the relationship between the United States and China and between the United States and Europe.
The multiple elections between increasingly polarised parties also increase uncertainty about the outcome. This also ensures that the reaction of markets to those elections is unpredictable. However, it is almost always true that here, too, possession of the issue means the end of entertainment. Financial markets tend to rise after elections simply because there is greater certainty about the future.
Possible game-changers
The elections in Taiwan could be a prelude to a change in the US-China relationship in the coming years. Currently, Lai Ching-te is leading in the polls mainly because he benefits from the fragmentation among his three opponents. With Taiwan, of course, the main issue is its relationship with China. A military occupation of the renegade province had many disadvantages for Beijing, but politically, it eventually succeeded in Hong Kong. In Indonesia, Prabowo Subianto is leading. This former general under Suharto has been denied entry to the US for violating human rights. Among other things, he favours a peace plan for Ukraine in which the Russians would occupy parts of Ukraine. In South Africa, the ANC will likely lose its absolute majority for the first time since 1990 and must cooperate with other parties. India is falling well with investors, but incumbent President Modi must win next year.
Agenda47
According to polls, Biden trailed Trump in five key states (swing states). Of course, there are questions about Biden’s age and approach to the economy, but the major shift in the voter landscape has been caused by Biden’s approach in the Middle East. Beyond that, of course, Americans are always about their own pockets. The name of Trump’s election manifesto is Agenda47, a reference to Trump’s soon becoming the 47th president of the United States. Trump seems intent on doing everything he can to exceed expectations this time. For instance, he promises to invest in flying cars and build “freedom cities” on unused federal land. Like China’s economic free zones, no rules apply in these freedom cities.
Furthermore, according to Trump, all vagrants will go to a tent camp outside the United States. As long as migrants do not have the right papers, he said, they must wait in centres outside the United States. Also, children of illegal migrants will no longer automatically become Americans if they are born in the United States. As for Trump’s stance against China, Democrats have tried to outdo Trump’s hard line in recent years. Perhaps it is time for Trump to strike a deal with China and surprise the market. However, according to Trump, there will be a tax on all products from countries that, in his view, do not trade fairly. Trump also wants to end the war in Ukraine, and he even wants the United States to withdraw from NATO.
Trump’s effect on financial markets
An often underestimated measure from Trump’s first term was extensive deregulation. In fact, since the February 2023 banking crisis, there has been a move towards even more regulation. Rules on higher capital requirements, among other things, do not take effect until 2025, just in time for Trump to stop them. If Trump wins, several temporary tax cuts will become more permanent. On average, that will save $1,600 per family per year. Count on even more spending and tax cuts.
At the top of Trump’s agenda is energy. Oil production must go up, and citizens’ energy bills must go down. According to Trump, inflation is caused by high energy prices. However, many of Trump’s proposals require approval by Congress, which Democrats partly own. Some proposals, such as that a child born in the United States is not automatically an American, even require amending the Constitution. Yet Trump can quite easily change a lot by replacing people in key places in a short time. The US presidential election will be held on Tuesday, 5 November 2024.
