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By Ruvini Perera · Aug 29, 2024
2024 US elections impact on emerging industries: Winners and losers of a Republican presidency
Disclaimer: The following report neither endorses any US presidential candidate nor condemns or condones any policies thereof
Table of contents
- Introduction: The deal begins
- Deregulation for business promotion: Rolling back the regulatory cards
- Sustainability rollbacks: Stacking the deck against green policies
- Fortification of US security and defense: High stakes in national security
- America First manufacturing and trade policies: Playing the protectionism card
- The interaction of policies
- Conclusion: Navigating the economic landscape of 2024
Introduction: The deal begins
As the November 2024 US Presidential Election draws closer, the presidential nominees and their proposed economic policies have increasingly become the center of attention. This report highlights the policies of the Republican Party and its presidential nominee, Donald Trump, examining their implications for key industries.
Trump’s official agenda is outlined in the Republican Party platform, which was disclosed at the Republican National Convention in July 2024. Overarching themes connecting the Republican Party's policy proposals include (1) deregulation for business promotion, (2) sustainability rollbacks (3) fortification of US security and defense, and (4) America First manufacturing and trade policies.
Notably, Trump has also been connected with Project 2025, a 900-page policy vision compiled by over 400 conservative scholars offering policy recommendations for foreign and domestic issues, education, and the economy. However, Trump denies involvement with Project 2025, despite at least 140 former Trump administration officials being contributors; as such, this report focuses exclusively on the policy recommendations outlined in the Republican Party Platform. The report focuses solely on analyzing the potential impact of business-related policy recommendations on relevant industries, without delving into discussions about socio-cultural policies.
Republican Party policy themes and their impact on industries
Industry impact intensity map (sector-based classification)
The following table identifies varying degrees of impact (high, medium and low) —both positive and negative—affecting each industry.
Deregulation for business promotion: Rolling back the regulatory cards
Deregulation is a central pillar of the Republican National Platform, emphasizing the removal of barriers to growth and innovation across various sectors, particularly fossil fuel production, cryptocurrency, and AI. Overall, these deregulatory initiatives are designed to stimulate economic activity and position the US as a leader in energy and technology while fostering a competitive environment for emerging industries. Key deregulatory initiatives encompass the following:
1. Unleashing fossil fuel production
- Easing restrictions on oil and gas production, which includes expediting the approval process for natural gas pipelines in the Marcellus Shale region spanning Pennsylvania, West Virginia, and New York.
- Rollback of taxes imposed on US oil, gas, and coal producers to reduce the cost of production.
- Bolstering nuclear energy production, with proposals encompassing the modernization of the Nuclear Regulatory Commission, keeping existing power plants operational, and investing in small modular reactors.
2. Crypto freedom
- Loosening regulations on cryptocurrency and advocating for the right to mine Bitcoin and self-custody of digital assets by US citizens.
- Opposing the establishment of a Central Bank Digital Currency, which is currently being researched by the Federal Reserve, arguing that it could lead to increased government surveillance and control over financial transactions.
3. AI acceleration
- Rollback of AI regulations, specifically targeting the Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence, which mandates that developers of powerful AI systems share safety test results and critical information with the US Government and emphasizes the need for privacy protections. The Republican Party justifies these regulatory rollbacks as a way to promote free speech and accelerate AI development by removing what they perceive as burdensome regulations that could stifle innovation. They argue that creating a less restrictive environment will enable companies to advance AI technologies more rapidly.
Deregulation policies and their industry impact
Sustainability rollbacks: Stacking the deck against green policies
The Republican National Platform outlines a series of policy proposals to roll back sustainability initiatives and regulations across various sectors of the economy, particularly in the automotive and energy industries. This rollback is intended to reshape the energy landscape, favoring traditional energy sources over renewable technologies. It also underscores the Republican Party's approach to environmental policy.
1. Reversing course on EVs and emissions
- Cancelling the March 2024 mandate on pollution standards for vehicles.
- Repealing the April 2023 federal vehicle emissions standards that promote transitioning to electric vehicles (EVs). The Republican Party justifies the repeal of these mandates as necessary to preserve consumer choice across all types of motorization, arguing that forcing a transition to EVs could drive up new car costs due to the significant expenses automakers would incur in scaling up EV production and adopting the required technology.
2. Rethinking renewables
- Terminating the Green New Deal, a plan to transition the US to 100% clean energy. The Republican Party argues that terminating the Green New Deal will lower energy costs and, in turn, help reduce inflation.
- Canceling government-backed renewable energy investment incentives such as the September 2023 wind subsidies. The Republican Party contends that subsidies and incentives for renewable energy create an unfair advantage for renewable energy producers. By revoking these subsidies, the party aims to eliminate market distortions and restore balance in the energy sector.
- Revoking sustainability-driven mandates, such as DoE and EPA regulations from April 2022, that raise energy efficiency requirements for household appliances including incandescent light bulbs, gas stoves, and certain dishwashers. The rollback of such mandates is seen by the Republican Party as a means of preserving consumer choice in household products.
Sustainability rollback policies and their industry impact
Fortification of US security and defense: High stakes in national security
National security, particularly regarding the strength of the US military and the protection of the nation's borders, has long been a fundamental objective for the Republican Party. The Republican National Platform emphasizes a range of initiatives aimed at achieving these goals while expanding its focus to include countermeasures against emerging cyber threats and the promotion of space exploration and manufacturing, as outlined below.
1. Sights on space
- Establishing a manufacturing industry in near-Earth orbit to expand the country's economic and industrial presence beyond the Earth's atmosphere.
- Sending US astronauts back to the Moon as part of a renewed focus on lunar exploration, laying the groundwork for potential future missions to Mars.
- Enhancing partnerships with the commercial space sector to leverage private industry capabilities, with the aim of increasing access to space, in-space habitation, and resource development.
2. Shielding the nation
- Increasing investments in military modernization, research, and advanced technologies to maintain technological superiority over adversaries. This also envisages expanding the US stockpile of weapons and ammunition.
- Proposing the construction of an "Iron Dome" missile defense system to protect against threats.
- Revitalizing the US industrial base, prioritizing defense-critical sectors, by ensuring that equipment and parts essential to national security are manufactured domestically.
- Raising security standards for critical public systems and networks and defending them against bad actors.
Fortification of US security and defense policies and their industry impact
America First manufacturing and trade policies: Playing the protectionism card
The Republican campaign slogan of “Make America Great Again” is encapsulated in the Republican National Platform’s America First trade policies, which emphasize the promotion of domestic production and reducing reliance on imported goods. These measures collectively have the potential to impact international trade, manufacturing, consumer goods, and the pharmaceutical industry while transforming the US healthcare system.
1. Protectionism and reciprocation
- Establishing a Reciprocal Trade Act, whereby the US would impose a reciprocal tariff on goods from any foreign country that levies a higher tariff on US-made products than the US does on theirs.
- Withdrawing China's Most Favored Nation status and gradually reducing imports of critical goods from China.
2. Healthcare overhaul
- Restoring Executive Order 13944, dated August 6, 2020, on ensuring essential medicines, medical countermeasures, and critical inputs are made in the US.
America First manufacturing and trade policies and their industry impact
The interaction of policies
The overall impact of the Republican Party’s proposed policies depends on the complex interaction of multiple factors, including how these policies influence each other and the effects of social and cultural policies not covered in this report. For example, the positive impact of America First policies on domestic manufacturing could potentially be negated by restrictive immigration policies that may limit labor availability, hindering domestic producers' ability to scale up to meet increased demand.
It is also noteworthy that in addition to the proposed Reciprocal Trade Act, a potential tariff of 60% on Chinese imports has also been mentioned during interviews, while it has not been formally included in the Republican Party policy proposals. The higher import tariffs resulting from such policies could reduce the availability of essential inputs, creating further production bottlenecks and driving up costs.
Moreover, some policies remain only partially disclosed, making their impact on specific industries uncertain. For instance, the Republican Party’s healthcare policy proposals are not clearly defined, although there have been suggestions that legislation such as Obamacare and the Affordable Care Act may be amended. As such, the outlook for related industries in healthcare and insurance is unclear, given the ambiguity in policy proposals.
These interactions illustrate the complex and often conflicting impacts of the proposed policies across various industries, where gains in one area might lead to challenges in another, depending on how these policies are implemented and enforced. Given these uncertainties and the potential for conflicting outcomes, the overall impact of the Republican Party’s policies remains difficult to predict, leaving key industries in a state of limbo, as they await further clarity and detailed plans.
Conclusion: Navigating the economic landscape of 2024
As the 2024 US Presidential Election approaches, the economic policies proposed by the Republican Party could usher in significant changes across key industries. From deregulation efforts aimed at boosting innovation and growth to the potential rollback of sustainability initiatives, these policies present opportunities and challenges. Businesses must remain agile, anticipating shifts in regulatory landscapes and market dynamics. While the long-term impacts of these policies remain uncertain, staying informed and proactive will be critical for industry leaders navigating this evolving economic terrain.
