The financial markets will "drink up" Trump's victory
*US Democrats are panicking after Joe Biden's disastrous TV debate performance. While a return of Donald Trump to the White House would be problematic for German businesses, particularly in the short term, his agenda appears positive for financial markets.
ntv: Should we now assume a Trump victory in the election after this TV debate?
Sandra Ebner: I don't think it's all over yet. For Joe Biden, it was important to show that he's not old and weak. He failed to do so. The debate was one where neither side emerged with glory. But it was explicitly important for Joe Biden to be strong, and he fell short. I can now imagine something I had previously ruled out: A change on the Democratic ticket, meaning the candidate is replaced. There needs to be dynamism in the campaign, and that didn't happen yesterday.
Who could then become the Democratic Party's presidential candidate instead of Joe Biden?
It's difficult. I can't imagine Kamala Harris taking over, as she's also under heavy criticism. If it's her, it must be decided behind the scenes. It needs to be a candidate who can be agreed upon, preferably one who also says they will only serve for this term and keep the field open for 2028. There are already many waiting in the wings. It could also just be Joe Biden's decision. If so, he must decide. Anything else would lead to self-destruction for the Democrats. And then it's definitely over.
How important is this election for Europe and its businesses?
Politically, Europe's security interests are certainly relevant, as Joe Biden has been very keen on rebuilding cooperation. This would be much more difficult under Trump's unpredictability. For businesses, the risk lies primarily in the area of tariffs, where Trump has announced he will make some changes. Germany is particularly in his focus due to its low NATO spending. In general, it will be more difficult for Europe with a President Trump than with a President Biden.
Does this also apply to the financial markets?
I believe the financial markets will initially take a positive view. We've seen this before. Let's look at what's on Trump's agenda: deregulation, less stringent antitrust laws, more mergers and acquisitions, and lower taxes. The financial markets generally welcome these things. One only needs to look at the list of Trump's major donors: Many Wall Street investors are on it.
Positive prospects from an investor's perspective?
We see longer-term risks, as Trump has a few things on his agenda that could have a negative economic impact - for example, in the area of immigration. The labor market has greatly benefited from more immigrants coming to the country. This has led to a reduction in labor shortages in recent years. If he reintroduces labor shortages, that means inflation and potentially higher wages.
Interview with Sandra Ebner conducted by Sabrina Marggraf
This interview was shortened and slightly adapted for better readability.
Despite the concerns within the US Democratic Party after Joe Biden's poor debate performance, a potential return of Donald Trump to the White House during the 2024 US presidential election could have mixed implications. While German businesses might face issues in the short term, financial markets may view Trump's policies, such as deregulation and tax cuts, favorably.
Further deliberations regarding the Democratic Party's presidential candidate in 2024 could ensue due to Joe Biden's faltering performance, with viable alternatives like Kamala Harris also facing criticism. A potential shift in the candidate may be necessary to maintain dynamism in the campaign and avoid self-destruction for the Democrats.
