Moody’s: US will maintain strict trade policy regardless of election win

Moody’s Ratings has published a report on the economic impact of the US presidential election.

While the survey acknowledges that Vice President Kamala Harris and former President Donald Trump have markedly different economic and fiscal policy proposals, it expects the next administration to remain focused on tougher trade policies and immigration priorities regardless of who wins the Nov. 5 election.

The next administration’s ability to implement policies depends on the balance of power in Congress.

US trade policy is likely to remain protectionist as the country seeks to counter China’s growing dominance in strategic sectors and global supply chains.

China’s growing trade in Latin America and investments in manufacturing infrastructure and renewable energy could further increase tensions with the US regardless of who takes over the presidency.

Harris’ trade agenda would maintain President Joe Biden’s targeted tariffs and strengthen relations with allies, while a new Trump administration would be more likely to implement broad trade policies that could trigger retaliatory measures, jeopardize global growth and accelerate inflation, reducing external demand for Latin American exports.

The next US administration will likely continue efforts to crack down on unauthorized border crossings and reduce the number of asylum applications.

Both Harris and Trump are expected to continue encouraging the Mexican and Central American governments to prevent undocumented immigrants from reaching the US.

Harris would support stricter border controls and would simplify the process by which immigrants already in the U.S. can obtain legal permanent residency.

A new Trump administration would likely take a tougher approach, such as increasing deportations or threatening to reinstate family separations or impose new tariffs on Mexican goods. These measures could hamper trade, financial and investment flows.

The transition to a low-carbon economy will continue to progress, driven by private sector initiatives, government mandates and consumer preferences.

Harris is likely to continue the Biden administration’s environmental policies, while Trump has vowed to roll back some of them. Promoting America’s energy transition would be an opportunity for the U.S. to deepen regional trade ties and counter China’s influence in the region.

South America has become a major destination for green investments from China and is a trading partner for minerals, which are essential for green technologies.

Both governments would step up U.S. efforts to curb the influence and power of drug cartels, which would require intelligence sharing and cooperation with Latin America.

Finally, a Trump administration will likely be less active in addressing US government concerns in the region regarding corruption and the weakening of democratic institutions, compared to a Harris administration.