Joe Biden’s to-do list
Our Global Equity Strategist sets out, what he believes, are the main priorities for President Joe Biden.
At noon on 20 January, Joe Biden will be sworn in as the 46th president of the United States of America, just days after Donald Trump became the first US leader in history to be charged twice with misconduct.
The marked differences in policy and leadership between the two men, we believe, will make this presidential transfer of power more important than most. Here’s what is likely to top Biden’s agenda in his first 100 days of office.
The battle against COVID-19
Despite the ugly scenes witnessed in Washington, D.C., with Trump supporters storming the Capitol building to protest the US election result, Biden’s number one priority is to battle the pandemic. With both US cases and deaths continuing to rise and the vaccine rollout only just beginning, this issue will likely be top of the new administration’s list for some time to come.
A commitment to vaccinate 100 million Americans in the first 100 days is the main objective (in addition to a 100-day mask mandate and an attempt to enable most schools to reopen within this period). But other policy initiatives loom large.
Biden described the recently enacted $900 billion aid package as a ‘down payment’, and it’s widely anticipated that more relief, of a similar size, is on the way. The next relief package could include welfare benefit extensions, as well as state and local government aid to help the struggling US consumer.
Climate policy is also likely to feature prominently; Biden has already pledged to make re-joining the Paris Accord of 2015 (an agreement to limit global warming from which Donald Trump withdrew) one of his first acts as president.
Foreign and trade policy
From a stock market perspective, dealings with China will be of particular interest to investors. Our expectation is that Biden’s approach to the world’s second largest economy will be similar to Trump’s in substance – but calmer and less temperamental in style.
We certainly expect material taxes on Chinese imports – imposed under Trump – to stay in place for the time being; even if there is some reduction from current levels over time.
Indeed, there is no shortage of topics on which Biden can quickly make his mark, for example, we question how the new administration will handle regulation of large US technology companies.
The chaotic events in Washington, D.C. have sharpened the focus on Biden’s other stated goal of bringing the country together again.
At this stage it is difficult to tell whether the recent riots have made achieving that goal more or less likely. The optimists among us hope that the chaotic scenes will serve as a catalyst for a coming-together moment. But the experience of the past five years suggests it is also possible that they simply remind many Republican politicians that Trump will continue to have great influence over a large part of the party’s base and broader electorate.
The coming months will tell us how the direction of Trump’s Republican party changes after his presidency ends, but we believe this is likely to have medium-term implications on stock markets rather than influence them in the short term.
Remember, the value of any investment is not guaranteed. The value of investments and any income received from can go down as well as up and you may not get back as much as you had originally invested.