How The 2024 Election Will Impact the U.S. Dollar and Global Trade

Contrasting Economic and Trade Policies

With the 2024 U.S. presidential election fast approaching, investors are closely monitoring how Kamala Harris or Donald Trump's unique economic and trade policies could impact the U.S. dollar. Their differing approaches to economic policy, trade, and immigration could create notable fluctuations in the dollar's value, influencing currency markets and international trade in various ways.

When discussing trade policy, Harris is expected to focus on maintaining stability by limiting policy alterations, potentially easing inflationary pressures and resulting in a weaker dollar against currencies like the euro. Her approach would likely prioritize predictable trade relations and diplomatic methods for resolving trade disputes. On the other hand, Trump might choose to reintroduce or increase tariffs, especially on products from China. This action could temporarily boost the dollar's value, but it also poses a threat of long-term decline as economic growth slows and international trade diminishes.

Concerning tax policy, Harris's fiscal conservatism likely means avoiding significant tax cuts, instead emphasizing the importance of economic stability and effective deficit management. This could lead to a temporary weakening of the dollar but aims to promote long-term economic prosperity. Trump might consider expanding the tax cuts established in 2017, which could increase short-term spending and stimulate economic growth.

Regarding immigration policy and its impact on the labor market, Harris is expected to advocate for a balanced approach. This strategy aims to stabilize wages while ensuring that workforce productivity remains high, fostering consistent growth in the labor market. Trump's immigration policy changes could tighten the labor market, increasing wages and inflation. While this could initially support the dollar, it risks creating longer-term challenges due to a smaller labor supply and restrictions on economic growth.

Inflation And Federal Reserve Response

To learn more about how the election could affect the U.S. economy, go to FXEmpire.com:

“Harris’s conservative fiscal approach may keep inflation low, reducing the need for aggressive Fed rate hikes and potentially weakening the dollar against other currencies.

This stability-focused strategy could make U.S. assets less attractive to yield-seeking

investors.

Under Trump, tariffs and tax cuts could drive up inflation, prompting Fed rate hikes that

could strengthen the dollar short-term but risk long-term stability if inflation rises too

quickly, potentially deterring foreign investment.”

Source: Harris vs. Trump: How the 2024 Election Could Transform the U.S. Dollar and

Global Trade - FXEmpire

https://www.fxempire.com/forecasts/article/harris-vs-trump-how-the-2024-election-could-transform-the-u-s-dollar-and-global-trade-1473389

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Written by AQUAMERGE

November 3rd, 2024