As the 2024 US presidential election approaches, analysts are actively debating the potential results, particularly how a second term for Donald Trump might unfold.
In weighing the issue, the JPMorgan team believes a second Trump administration will bring significant changes to policy areas ranging from international relations to domestic regulation.
One of the major shifts under the Trump 2.0 administration will be a tougher stance on foreign policy, especially towards China. In its note, JPMorgan stressed that Trump’s approach will be based on the belief that “America must win and dominate,” which will likely lead to a more aggressive use of executive orders related to trade and investment.
At the same time, a second term could also “lead to more contentious relations between the United States and the European Union with adverse consequences for Ukraine,” the bank team emphasized.
The note says environmental policies will also face a rollback. Trump is expected to reverse many of the clean energy initiatives implemented by the Biden administration, instead focusing on easing regulatory burdens on oil and gas companies.
“However, we do not see any structural changes to our expectations for U.S. oil and production over the next presidential term, regardless of who sits in the White House,” JPMorgan added.
Domestically, the Trump administration is likely to include experienced politicians and loyalists, unlike some of the more unconventional candidates during his first term. This could lead to a more streamlined and perhaps more market-friendly approach to governance.
Trump’s economic policies 2.0 will emphasize tax cuts and deregulation. The focus will be on further cutting corporate taxes, reducing regulatory burdens, and possibly introducing a new Federal Reserve Chairman who supports negative interest rate policy (NIRP).
Meanwhile, investment may continue in the infrastructure sector, especially in 5G and traditional infrastructure projects. JPMorgan believes the Trump administration will provide more support to industries such as aerospace, defense, airlines and financial services.
Analysts say Trump remains focused on his Make America Great Again (MAGA) base, using social media extensively for campaigning and political messaging. Abortion remains “an inspiring issue, but both sides may have gone overboard in how they address the issue on the campaign trail,” they write.
At the same time, Generation Z remains a large voting bloc but is also “frustrated, raising questions about voter turnout and demanding specific political appeals.”
Overall, the 2024 election is expected to be highly competitive, with close races in several key states. Current polls show Trump leading in critical states like Arizona, Georgia and Michigan, although the margins are narrow.
“The outcome of the 2024 U.S. presidential election will come down to thousands of votes in several key swing states, reflecting close results in 2016 and 2020,” JPMorgan said in a note.