Following a surprising outcome in the European Parliament elections this year, the political landscape in France and the UK has changed. The UK has seen the Labour Party regain dominance, and in France, the right-wing forces nearly took over two weeks ago, but with support from the left-wing coalition, the result was a hung parliament. On November 5th, the pivotal election that will determine global leadership is coming up—the U.S. Presidential Election. In this post, we will discuss the differences between Biden and Trump's policies and their impact on the financial markets.

1. Fiscal Policy

The U.S. political scene is primarily dominated by the Democratic and Republican parties. The Democrats advocate for a larger government and expanding its role in society, whereas the Republicans favor a smaller government and less intervention. This fundamental difference translates into divergent approaches to taxation and fiscal policy. Biden advocates for higher taxes on the wealthy and corporations, while Trump supports tax cuts. Despite this, whether under Biden or Trump, the pace of government deficit expansion has not significantly changed. Both have supported increased government spending to bolster industries amid intense international competition.

2. Healthcare Policy

Healthcare policy is a continued focus for the Biden administration, which aims to expand the number of people covered by Obamacare. Both Biden and Trump have worked towards lowering prescription drug prices, making this a shared goal with limited overall impact.

3. Foreign Policy

There is a significant divide in foreign policy between the two. Biden supports multilateralism, and his administration has halted Trump's practice of withdrawing from international organizations. Moreover, Biden has strengthened cooperation in the Indo-Pacific region through various integrated efforts.

4. Immigration Policy

Their immigration policies also show stark differences. Trump advocates for strict immigration controls, including building a border wall with Mexico and deporting undocumented immigrants, leading to a significant reduction in immigrant numbers. In contrast, Biden has adopted a more lenient approach, lifting bans on green card applications and work visas, thereby promoting immigration growth. This has been a key factor in the past year's decrease in inflation and stable economic performance.

Conclusion

By understanding the differences between the two, we see that despite the many differences in Biden and Trump's policies, there are also points of consensus.

• Trump: Trump's "America First" approach in foreign policy and strict immigration controls require a weaker dollar to achieve these goals. However, strict immigration policies may hinder this objective. The U.S. relies on immigrants to fill job vacancies, and a lack of immigrants could lead to significant wage increases. Coupled with trade barriers from isolationism, this could make it hard to lower prices, potentially backfiring. Additionally, Trump's unpredictability could increase market volatility, making trading more challenging.

• Biden: Biden supports stable expansion of government spending while advocating for higher taxes on corporations and the wealthy, favoring multilateral diplomacy, and a lenient stance on immigration. This approach can balance the deficit through taxation and foreign debt purchases, with no strict requirements on interest rates, making employment and inflation more flexible. Overall, the dollar might appreciate, and continued support for key industries can help sustain the current strength of the U.S. stock market.

However, regardless of who is elected, the changes in internal and external environments over the next four years are unpredictable, especially with non-typical crises like the COVID-19 pandemic of 2019-2020. Thus, these assumptions are theoretical. Historically, regardless of who is in power, the long-term trend of the U.S. stock market is minimally affected. Therefore, it is advisable to consider the election as a factor for market volatility but not as the core of decision-making for investment.

*Disclaimer: This article is for reference only and does not constitute any investment invitation, proposal, suggestion, consultation, or recommendation. Please note that all assets require multifaceted evaluation and carry high risks. Any investment decisions and related risks remain with investors.