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For Donald Trump, who has always measured the success of his presidency in terms of economic development, there could hardly be better news a few days before the November 3 election. Because according to Commerce Department data released Thursday, the US economy regained traction in the summer quarter after the crown-related drop in the spring. Gross domestic product increased from July to September extrapolated for the year at a record rate of 33.1 percent. After a 31.4 percent decline in the spring, experts only expected a 31 percent increase. Consumption, which rose sharply, turned out to be the engine of the rebound. But exports and investments also increased considerably in the summer.
But even if there were signs of an economic improvement in the summer, fears of another setback for the economy are already spreading in the face of the corona infection. This also hit Wall Street recently. For many voters, therefore, it will also be decisive what economic boost Trump and his Democratic rival Joe Biden want. An overview of the two candidates’ programs:
General guidance
Trump: At his inauguration, the president announced the “America First” policy, with the help of which domestic industry should be revived and “unfair” foreign competition put in its place. In doing so, he also turned his Republican Party, which until then had been a proponent of world free trade, upside down. With punitive tariffs on imports from China, the EU and Canada, Trump has tried to close the huge deficit in the US trade balance, with moderate success.
Biden: In his “Buy American” initiative, the Democrat announces that he will boost demand for domestic industrial products through a government procurement initiative and the expansion of infrastructure with 400 billion dollars. With a mix of specific incentives and new financing instruments under the motto “Made in All of America”, smaller companies in particular will be promoted. Biden also has the $ 300 billion prospect for research and development, for example in the areas of 5G, electric mobility and artificial intelligence.
Taxes
Trump: Perhaps the greatest success of his term is the reduction of corporate taxes in 2017. With the reform, tax rates were reduced from 35 to 21 percent. Much more controversial is the reduction in income taxes, which critics say will especially benefit the wealthy. This actually expires at the end of 2025. If Trump remains president, he wants to anchor the reduction permanently. This will be financed by reducing public spending at the same time. Trump also specifically wants to support companies that are moving their production from China to their home country.
Biden: The Democrat wants to raise corporate taxes to 28 percent. That would be in the middle between the current level and before Trump’s tax reform. At the same time, the Democrat wants to ask the rich to pay more: The top tax rate will be raised from 37 percent to the old level of 39.6 percent, and at the same time, the tax loopholes will be closed. Income below $ 400,000 per year Biden wants to save tax increases, which apply to more than 98 percent of households. According to calculations by US institutes, between 2.4 and 3.4 trillion dollars could be generated in a decade.
Commercial policy
Trump: In 2018 and 2019, he imposed punitive tariffs on Chinese products worth 370,000 million dollars. According to US customs and border protection authorities, this has cost US importers around $ 61.6 billion so far. Experts say this is partly responsible for the fact that the competitiveness of American manufacturers has suffered. Trump has also acted against his allies: Tariffs on steel, aluminum, washing machines and various EU products led to another $ 12.2 billion in fines for September 2. Trump’s threat to impose higher tariffs on European automakers is also in the room.
Biden: “I will use tariffs when necessary, but the difference between Trump and I is that I will have a strategy to win with these tariffs, and not just to feign severity,” Biden wrote in May. to the United Steelworkers union. Tariffs on steel and aluminum would remain in place until a global solution can be negotiated to limit overproduction, largely focused on China. As a self-confessed ocean liner, Biden is also interested in a better relationship with Europe. He is unlikely to threaten punitive tariffs on European car imports, as his rival Trump routinely does. Rather, it is likely to try to use European partners to jointly curb China’s rise.
Climate policy
Trump: “We are recovering the coal industry to 100 percent”, had promised Trump in the previous electoral campaign. Although he withdrew the environmental regulations of his predecessor Barack Obama, he was unable to stop the decline of the coal industry. Since 2010, 252 coal-fired power plants have been shut down in the US, 66 of them since Trump’s inauguration. He is also known as a friend to the oil industry and has also abolished environmental and climate regulations here, for example by allowing the extraction of fossil fuels on federally owned land. The president described global warming as a “hoax” and in 2017 canceled the Paris climate agreement.
Biden: With two trillion dollars, the Democrat intends to support the expansion of climate-friendly infrastructure over the next four years, from alternative fuels like electric mobility to green hydrogen. Solar and wind energy will also be promoted. Biden’s goal is for the US to become climate neutral by 2050 at the latest.(reuters)
