Trump vs Harris: How the Election Can Affect Your Economy

Escalating trade war with clear inflation risks - towards a policy that is more or less a continuation of President Joe Biden's agenda. The US election can send economic shockwaves around the world.

» Updated: August 27 2024

» Published: August 25 2024

Trump vs Harris: How the Election Can Affect Your Economy
Photo: AP/TT

Share this article

The presidential candidates', Republican Donald Trump and Democrat Kamala Harris, respective plans for the US economy are still unclear.

Harris' proposal has in many respects not been concretized – and Trump has thrown out a lot of proposals that we do not know if he will implement, says Elisabet Kopelman, US economist at SEB.

It is known that Trump wants to retain and expand his tax reform from 2017 – which, among other things, means significantly reduced corporate and income tax. Parts of it will expire next year if Congress does not extend it. He also wants to exempt pensioners from taxation.

Furthermore, Trump's willingness to introduce import tariffs of 10-20 percent against most countries and over 60 percent for China is notable.

"Will get even worse now"

Kopelman describes Trump's trade policy as "very drastic". When the trade war against the rest of the world began during Trump's presidency, the damage was mitigated by the lowered taxes, according to her.

He is going so far this time that it is likely that the effects will get even worse now. The trade war damages the economy so much that it more than offsets the benefits of low taxes.

If the US raises tariffs, the rest of the world will respond.

Since the US is not as dependent on foreign trade, such a trade war is likely to be more harmful to the rest of the world than to the US, says Kopelman.

Tariffs create "upside risks for inflation" and can complicate things for the central bank, the Federal Reserve.

If you start damaging the credibility of the Fed's inflation policy, there is a risk that inflation expectations will start to rise, and then interest rates will do the same.

Overall, it is a worrying agenda Trump has.

Focus on wallet issues

Harris, in turn, also wants to keep lower taxes for large parts of the population, but raise corporate tax and tax on capital income.

Recently, she presented a range of wallet proposals to alleviate the inflation burden on households: tax relief for parents, stopping overpricing in grocery stores, and reducing the cost of health insurance. She also proposed subsidies for homebuyers and stimulus packages for housing construction.

We are still waiting for a comprehensive economic agenda from Kamala Harris. One must assume that she largely holds on to the election platform that was drawn up for Joe Biden. But it seems like the focus is shifting from green industrial policy to household economy, says Kopelman.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

AI in Recruitment: Potential Legal and Financial Risks for Companies
1 MIN READ

AI in Recruitment: Potential Legal and Financial Risks for Companies

HR Managers Overwhelmed by AI-Generated Job Applications
2 MIN READ

HR Managers Overwhelmed by AI-Generated Job Applications

Germany Achieves Gas Storage Goal Two Months Early
2 MIN READ

Germany Achieves Gas Storage Goal Two Months Early

Investigator Recommends Against Reintroducing Cousin Inheritance Rights in Sweden
2 MIN READ

Investigator Recommends Against Reintroducing Cousin Inheritance Rights in Sweden

China's Manufacturing Industry Slows in August Despite Stabilized US Trade Relations
2 MIN READ

China's Manufacturing Industry Slows in August Despite Stabilized US Trade Relations

Court Rules Trump's Trade Tariffs Illegal in Judicial Setback
2 MIN READ

Court Rules Trump's Trade Tariffs Illegal in Judicial Setback

Swedish Electric Boat Maker Candela Expands Production to USA
3 MIN READ

Swedish Electric Boat Maker Candela Expands Production to USA

Dousa on Verdict: Tariffs Likely to Persist Despite Court Ruling
1 MIN READ

Dousa on Verdict: Tariffs Likely to Persist Despite Court Ruling

Rice Trade Dispute Halts US-Japan Customs Talks
1 MIN READ

Rice Trade Dispute Halts US-Japan Customs Talks

Court Rules Most Trump Tariffs Illegal but Allows Temporary Continuation
2 MIN READ

Court Rules Most Trump Tariffs Illegal but Allows Temporary Continuation

Klarna Prepares for New York Stock Exchange Debut
1 MIN READ

Klarna Prepares for New York Stock Exchange Debut

Sanctions Loom for Companies Trading with Russia
1 MIN READ

Sanctions Loom for Companies Trading with Russia

Wall Street Declines After July Inflation Data Released
2 MIN READ

Wall Street Declines After July Inflation Data Released

The Job Market in Sweden is Cooling Down - Significant Differences Between Industries

The Job Market in Sweden is Cooling Down - Significant Differences Between Industries

US Inflation Steady at 2.6 Percent in July
1 MIN READ

US Inflation Steady at 2.6 Percent in July

Extended Nuclear Shutdown Raises Electricity Prices in Southern Sweden
2 MIN READ

Extended Nuclear Shutdown Raises Electricity Prices in Southern Sweden

Price Pressure Reduces Alibaba's Second Quarter Profit
1 MIN READ

Price Pressure Reduces Alibaba's Second Quarter Profit

Ikano Bank Reports Loss Amid 670 Million Kronor Credit Losses
1 MIN READ

Ikano Bank Reports Loss Amid 670 Million Kronor Credit Losses

Norway and US Senator Clash Over Oil Fund's Caterpillar Divestment
1 MIN READ

Norway and US Senator Clash Over Oil Fund's Caterpillar Divestment

Tesla Denied New Charging Stations Amid Swedish Union Strikes
1 MIN READ

Tesla Denied New Charging Stations Amid Swedish Union Strikes