China's growing trade in Latin America and investment in manufacturing infrastructure and renewable energy could further increase tensions with the US, regardless of who takes over the presidency.
Moody's Ratings has published a report on the economic impact of the US presidential election.
While the study acknowledges that Vice President Kamala Harris and former President Donald Trump have markedly different economic and fiscal policy proposals, it anticipates that the next administration will maintain its focus on tougher trade policies and immigration priorities regardless of who wins the election on Nov. 5.
The ability of the next administration to implement policies will depend on the balance of power in Congress.
U.S. trade policy will likely maintain a protectionist stance 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 investment in manufacturing infrastructure and renewable energy could further increase tensions with the US, regardless of who takes over the presidency.
Harris’ trade agenda would preserve President Joe Biden’s targeted tariffs and seek to strengthen relations with allies, while a new Trump administration would be more likely to enact broad trade policies, which could lead to retaliation, jeopardize global growth and accelerate inflation, reducing external demand for Latin American exports.
The next U.S. administration is likely to continue its efforts to stem unauthorized border crossings and reduce the number of granted asylum claims.
Both Harris and Trump are expected to continue to encourage Mexico and Central American governments to prevent undocumented immigrants from reaching the U.S.
Harris would support stricter border control measures and seek to simplify the process by which immigrants already in the U.S. 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 imposing new trade tariffs on Mexican goods. These measures could hamper trade, financial and investment flows.
The transition to a low-carbon economy will continue to advance with private sector initiatives, state mandates and consumer preferences.
Harris is likely to continue the Biden administration’s environmental policies, while Trump has promised to reverse some of them. Fostering America’s energy transition would represent 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 investment from China and is a trading partner for minerals, which are critical for green technologies.
Either administration would increase U.S. efforts to curb the influence and power of drug cartels, which would require intelligence sharing and collaboration with Latin America.
Finally, a Trump administration would likely be less active in addressing U.S. government concerns in the region related to corruption and the weakening of democratic institutions compared to a Harris administration.
