Biden Says 'YES' While Trump Says 'NO', US Industry's Ups and Downs in the Presidential Election [Global Focus]

Biden's Electric Vehicle and Eco-Friendly Policies Emphasized
Infrastructure Industry Growth Accelerates with Policy Continuity

Trump's Re-election Would Mean IRA Abolition
Internal Combustion Vehicles and Traditional Energy Resurgence

Cryptocurrency's Fate Likely Highlighted Depending on Election Outcome

The world's largest event this year, the U.S. presidential election, is just over four months away. The industrial landscape of the United States is expected to shift dramatically depending on which candidate, President Joe Biden or former President Donald Trump, wins. This is because Biden and Trump have taken opposing stances on most industrial and economic policies.

President Biden has focused on fostering industries to address the climate crisis, such as electric vehicles and eco-friendly energy, during his term, whereas former President Trump has pledged to revive internal combustion engine vehicles and traditional energy sources. In the cryptocurrency industry, President Biden maintains a regulatory stance, while former President Trump holds a more conciliatory position. The massive campaign contributions from industries to their preferred presidential candidates reflect concerns that a single election could significantly impact the rise or fall of industries.

Electric Vehicles vs. Internal Combustion Vehicles: Stark Contrasts

The fortunes of the electric vehicle (EV) and internal combustion engine (ICE) industries are expected to diverge sharply depending on which presidential candidate wins. The Biden administration finalized automobile emission regulations this year aiming to increase the share of electric vehicles among passenger cars sold in the U.S. to 56% by 2032. Additionally, through the Inflation Reduction Act (IRA) enacted in August 2022, subsidies are provided for electric vehicles and related technologies until 2032. If the Biden administration retains power, it is expected that the EV industry will overcome the "EV chasm" (temporary demand stagnation) and transform the automotive sector into an electric vehicle haven.

Former President Trump has criticized Biden's green policies as a "Green New Scam" during his campaigns and vowed to overturn them. He also pledged to repeal the IRA on his first day in office. Bloomberg Intelligence (BI) analyzed that if Donald Trump wins the election, the $36 billion in IRA subsidies could be cut, slowing the adoption of electric vehicles and inevitably impacting the secondary battery sector. Conversely, the internal combustion engine industry is expected to naturally rise as a result.

However, The New York Times (NYT) predicts that despite Trump's anti-EV stance, the electric vehicle market will continue to grow. This is because the industry has invested billions of dollars in EV infrastructure under the Biden administration's strict EV promotion policies. With the EV sales share in the U.S. expected to reach about 10% this year, a sudden policy reversal could actually harm the automotive industry.

Renewable Energy and Traditional Energy: Fate in the Spotlight

The fate of renewable energy sources such as hydrogen and wind power, as well as traditional fossil fuels, is also expected to be highlighted. In April, the Biden administration proposed strong regulations requiring coal and natural gas power plants to capture 90% of their carbon emissions using carbon capture and storage (CCS) technology. The goal is to commercialize blue hydrogen, an eco-friendly energy produced through this process. In the same month, final rules were announced to restrict leasing for new oil and natural gas development in Alaska, and the eighth new offshore wind project near New England was approved.

Former President Trump's stance on the fossil fuel industry can be summarized by the slogan "Drill, baby, drill," first used at the 2008 Republican National Convention. This aligns with his efforts to solicit large campaign donations from oil giants like ExxonMobil and Chevron.

However, major foreign media have noted that while the fossil fuel industry experienced a downturn during the Trump administration, it has entered a second heyday under Biden. During Trump's tenure, the S&P 500 energy sector index fell about 40%, whereas it has surged approximately 127% since Biden took office. There are concerns that if Trump is re-elected and trade conflicts arise, global crude oil demand could weaken, causing refining margins to decline.

Bitcoin Spot ETF Approved... Yet Industry Sides with Trump

[Image source=Yonhap News]

Earlier this year, the cryptocurrency industry entered a new phase with the approval of a Bitcoin spot exchange-traded fund (ETF), but the industry appears to be supporting former President Trump. This is due to the Biden administration's strong regulatory stance on cryptocurrencies. Since Gary Gensler was appointed as chairman of the Securities and Exchange Commission (SEC) by President Biden, the SEC has filed lawsuits across the cryptocurrency sector, including against Ripple, exchanges like Coinbase, and mining companies such as Digital Licensing. Moreover, the SEC's approval of the Bitcoin spot ETF is widely seen as a reluctant decision following a lawsuit loss against asset manager Grayscale.

In contrast, former President Trump has been showing a pro-cryptocurrency stance daily. He has pledged to allow crypto assets in campaign donations and recently declared on social media, "I will end Biden's war on cryptocurrency" and "I will guarantee the future of Bitcoin in America." Investment bank Standard Chartered forecasts that if Trump wins, Bitcoin's price could reach $150,000 by the end of the year. There is also speculation that the approval of altcoin spot ETFs would become more likely under a Trump administration.

Infrastructure and Healthcare Industries to Accelerate Growth if Biden is Re-elected

President Biden has committed to investing massive resources in rebuilding bridges, roads, and broadband throughout his term, so the infrastructure industry could thrive if he is re-elected. This is due to the continuity of the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) enacted in 2021. Similarly, the healthcare sector could continue to benefit from policies expanding health insurance coverage. If former President Trump wins, there is analysis that the traditional defense industry, overshadowed by big tech, could regain leadership amid heightened military conflicts.

Given the confrontation with China over the development of artificial intelligence (AI), a national core technology, the power and data center industries are expected to be promising regardless of which candidate wins.

Post-election Industrial Outlook Has Variables... Tight Race in Polls

However, many campaign promises are populist policies aimed at winning votes, and unexpected domestic and international events could introduce many variables to the industrial outlook after the election. The Wall Street Journal (WSJ) explained that "despite corporate complaints under the (regulatory) Biden administration, their profits have increased and they have prospered."

Following former President Trump's guilty verdict last month, various polls show a tight race within the margin of error. A Fox News poll (margin of error ±3% points) conducted from the 14th to 17th showed President Biden (50%) leading former President Trump (48%) for the first time since October last year.