Between Trump and Biden, not much is really likely to change
It is said that in politics, like in life, the more things change, the more they stay the same. Despite, the recent concerns over the assault on Capitol Hill and the attempts to impeach Trump, one thing is certain. Biden will not allow US policy to change substantially from Trump.
Corporate tax breaks will stay
One of the concerns expressed by the markets across the world was that with a majority in the Senate, Biden may unwind the tax breaks given by Trump. Frankly, that is unlikely to happen. The billions of dollars of benefits have been given to US corporations and that is already visible in stratospheric levels of the Dow and NASDAQ. Any reversal of that move would imply a virtual implosion in market value in the US markets. Biden will be much better off leaving the tax cuts as it is.
Will Biden curb on fracking?
One of the promises made by Biden in his pre-election campaigns was to stop fracking for shale on Federal lands. Joe Biden may not be much of a shale bull like Trump but he realizes that there is just too much at stake in the US shale industry. This includes jobs, debt of shale companies and the emergence of the US as a swing producer of oil. If Biden puts curbs on fracking, it would mean that the US becomes a price follower than a price setter. That may be too much of a risk for Joe Biden.
Will Biden change China stance?
If there is one thing the global markets need clarity on, it is about the trajectory of Sino-US relations. Currently, it is at its acrimonious worst. There are import curbs on Chinese goods, ban on most technology stocks, and curbs on Chinese companies with ownership linked to the Chinese government. In last few weeks, Trump has made some very strong remarks about China but the democrats have been silent. Biden knows well that the election was much closer than the final results may have exhibited. With 70 million voters still rooting for Trump, Biden would know the risks of an about-turn in America’s China policy. After all, it was his aggressive stance on China that had made Trump very popular.
What about H1-B visas?
It would be naïve to expect that Biden would change the visa policy. If early indications are anything to go by, then the anti-immigration policy will continue. Incidentally, Trump has opened a Pandora’s Box by putting American jobs for Americans first. That definitely struck a chord with the people of the US. It was OK as long as no US President tweaked the visa policy. With Trump having tightened the immigration rules, Biden will not only find it easier but also more convenient to maintain status quo. Most IT companies are reconciled to this new reality. For the optimists, not much will really change on American policy!