We believe Biden’s successor, Kamala Harris, will lose to Donald Trump in November
In our Events To Watch 2024, we considered the possibility of health issues getting in the way of Joe Biden’s re-election campaign: this event has now materialized.
Following immense pressure from his party in the last few weeks, including from senior figures such as Nancy Pelosi, Chuck Schumer, and Barack Obama, President Biden announced that he would not be seeking a second term in the White House. In a later statement, he endorsed his current vice president, Kamala Harris, to run atop the Democratic ticket, while would-be competitors such as Gavin Newsom and Gretchen Whitmer took themselves out of the running.
While her candidacy might reinject some vigor into the flagging Democratic campaign, quelling concerns about age and helping shore up support among more progressive voters, she remains a broadly unpopular politician. Furthermore, with just over 100 days to go until the election, she will need to run a shortened campaign, albeit with plentiful coffers. Our assessment is that she will likely lose the contest to Donald Trump in November 2024, paving the way for a second Trump presidency.
Business Implications
Multinationals, in the US and elsewhere, should ensure they are prepared for a second Trump presidency. In particular, multinationals should assess their vulnerability to higher US tariffs on China as well as other countries, notably in APAC and Europe; executives should consider diversifying their supply chains to mitigate risk. Beyond tariffs, a second Trump presidency would likely lead to further, more intense deterioration in US-China relations, leading to uncertainty and unpredictability, and potentially harming multinationals’ operations and profits. Domestically, a second Trump presidency would focus on reducing immigration, which could place pressure on the labor market, as well as extending and deepening the 2017 tax cuts, including a reduction in the corporate tax rate. A Republican administration would also take aim at several of the incentives offered under the Inflation Reduction Act (IRA), notably for clean energy and electric vehicles.
What about the Republican campaign?
Following Trump’s dramatic assassination attempt, in which he narrowly avoided a bullet, his campaign received a series of high-profile endorsements, including from figures such as Elon Musk, as well as a flood of campaign donations. His polling ratings also received a boost, although this could be a short-term effect following the assassination attempt.
Days later, at the RNC, Trump’s pick for vice president led to a fair bit of head-scratching. JD Vance, an Ohio senator known for his firebrand populist style and rural background, is unlikely to boost Trump’s standing beyond his base, potentially pointing to confidence on the Trump campaign’s side. Vance, a Trump critic turned loyalist, espouses (and in certain cases goes beyond) Trump’s views on several issues, including immigration, trade, relations with China, and antipathy toward Wall Street and big business.
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