Trump or Biden? What’s at stake for us?

The whole world is watching the US polls with bated breath. By the time this column comes out, there might already be a clearer indication of who will be the next president of the United States whether it’s Republican incumbent Donald Trump or his Democratic challenger Joe Biden.

What’s at stake for the Philippines? There’s a lot at stake for the country as it is for many economies around the world.

Global growth

If Trump wins the trade war between the US and China will continue and will remain a major threat to global growth. This will certainly continue to affect the Philippines, which deals with both countries in no small ways.

In fact, every time the US threatens China with sanctions, the Philippine stock market tumbles.

A Filipino tycoon once said that Trump remains the biggest threat to global growth because of the trade war.

The US-China trade war, which flared up in 2017, has indeed dampened the global economy.

The trade war’s biggest losers are the US and China themselves, but the negative spillover across the world cannot be discounted.

China, as we all know, is the world’s factory and with lower production of many Chinese products, many of the goods that we consume in the Philippines have also been affected – from electronics to construction materials.

Biden

On the other hand, I believe that if Biden wins, the US will adopt a different trade and foreign policy.

Perhaps, he will move for an open trade, or back to how it was before the trade war, which had been beneficial to the Asia Pacific region.

Three scenarios

UBS has assessed potential risks based on three scenarios, according to an article in Bloomberg.

Scenario one is that Biden is elected with Democrats taking both houses of the Congress.

Scenario two is that Trump is reelected as president and the Democrats and Republicans maintain their hold of the House of Representatives and the Senate, respectively.

Scenario three is that Biden is elected but Democrats and Republicans retain the House of Representatives and the Senate, respectively.

UBS said that markets with greater overseas revenue exposure, including Asian exporters, could benefit if the US adopts a more multilateral and predictable foreign policy, which is more likely under a Biden win.

On the other hand, UBS said: “Markets with high yield gaps, low current account balances and deficits, and historical sensitivity to the US bond market could benefit in an environment of easier-for-longer monetary policy (which is a more likely outcome under the ‘status quo’ scenario). This would likely benefit South Asia.”

Societe Generale Cross Asset Research, meanwhile, said that if Biden wins, the trade policy would be less centered on tariffs and more on seeking an ally, which would broadly benefit Asia.

Human rights

Outside economics, I believe a Biden win would put emphasis on human rights, consistent with the Democratic Party’s long history of defending human rights and expanding opportunity for all Americans.

This might put pressure on the Duterte administration’s drug war and possibly even its clamp down on critical journalists.

Will the Democrats take back the White House? It’s still uncertain as of this writing but for now, what’s clear is that the race is tight, with Trump – despite his chaotic presidency – still consistently enjoying high approval ratings.

The real estate mogul-turned-President has given his fellow businessmen what they want.

For instance, he moved to permanently slash the corporate tax rate to 21 percent from 35 percent, while also providing temporary benefits for individuals and their families, touted by his supporters as an economic bonanza.

But his handling of the COVID-19 pandemic is also one of the major problems hounding his presidency.

BusinessInsider touted it as one of the biggest disasters in US history – with over 6.3 million confirmed cases and over 230,000 reported deaths as of early November, making the US the country in the world with the worst COVID-19 outbreak.

The whole world is watching, indeed, and I can only hope that as the Philippines faces an uncertain future because of COVID-19, the next president of America would help pave the way for a better geopolitical environment.

We could certainly benefit from that and help us recover from the onslaught of the pandemic.

As for our next president, that’s another story, but I fervently dream that as Filipinos elect a new president in 2022, the Philippines will one day have a better story to tell.

Iris Gonzales’ email address is [email protected]. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com