With the 2024 U.S. presidential election approaching, analysts are actively debating the potential outcomes, particularly how a second term for Donald Trump might unfold.
Weighing in on this matter, JPMorgan’s team believes a second Trump administration would bring significant changes across various policy areas, from foreign relations to domestic regulations.
One of the primary shifts under a Trump 2.0 administration would be a tougher stance on foreign policy, particularly towards China. In its note, JPMorgan highlights that Trump’s approach would be driven by a belief that “America must win and dominate,” likely resulting in more aggressive use of Executive Orders related to trade and investment.
Simultaneously, the second term might also “result in a more contentious relationship between the US and European Union with adverse consequences for Ukraine,” the bank’s team highlighted.
Environmental policies would see a rollback as well, the note states. Trump is expected to reverse many of the clean energy initiatives implemented by the Biden administration, focusing instead on lightening the regulatory burden on oil and gas companies.
“However, we see no structural changes in our expectations for both US oil and natural gas production during the next presidential term, regardless of who sits in the White House,” JPMorgan added.
Domestically, Trump’s administration would likely include experienced politicians and loyalists, in contrast to some of the more unconventional picks during his first term. This could lead to a more streamlined and possibly more market-friendly approach to governance.
Economic policies under Trump 2.0 would emphasize tax cuts and deregulation. The focus would be on lowering corporate taxes further, reducing regulatory burdens, and possibly introducing a new Federal Reserve chair who supports negative interest rate policy (NIRP).
Meanwhile, the infrastructure sector could see continued investment, particularly in 5G and traditional infrastructure projects. JPMorgan believes the Trump administration would show more support for industries like aerospace, defense, airlines, and financial services.
Analysts said Trump remains focused on his Make America Great Again (MAGA) base, using social media extensively for campaigning and political messaging. Abortion remains a “galvanizing issue but both sides may have overplayed their hands in how they are addressing it on the campaign trail,” they wrote.
At the same time, Gen Z remains a large voting bloc but is also “disillusioned, raising questions about voter turnout, and requiring specific policy appeals.”
Overall, the 2024 election is expected to be highly competitive, with close races in several key battleground states. Current polling shows Trump leading in critical states such as Arizona, Georgia, and Michigan, although the margins are narrow.
“The outcome of the 2024 US presidential elections will come down to just thousands of votes in a few pivotal swing states, mirroring the close outcomes of 2016 and 2020,” JPMorgan’s note states.