US Presidential Election Update
The United States elections are in full-effect; the ballots are getting counted, and we’re getting live updates of all the states and the numbers that the respective parties are doing. The United States being a global economic superpower makes its presidential elections not only important to them but crucial to the world as a whole – especially developing nations like ours. The global health pandemic COVID-19 wreaked havoc on the global economy, and this election will set the tone for the recovery.
Currently, the polls are leaning in favour of Joe Biden of the Democratic Party. The South African Rand unsurprisingly saw an improvement on the evening of Wednesday the 4th of November. And, went from R16 to the dollar to R15.83. A MoneyWeb.co.za article states that the Rand will likely strengthen if Biden wins.
Click the link below to get the latest poll numbers:
We’ll keep you updated on the results as they get announced.
The biggest topic on everyone’s timelines and minds right now. The race between the Republican Party and the Democratic Party is on. For the Democrats, Biden is the presidential candidate and for the Republicans, Trump is the candidate. These elections are different from previous ones because we are still in the midst of a global pandemic that wreaked havoc on the global economy. As much as watching from the sidelines, also known as Twitter, is entertaining, we also have good reasons to care about the United States elections, and these reasons have everything to do with our economy.
Why should we care about the US elections?
Economist Mike Schussler on ewna.co.za states that because the United States is one the largest global economies and is one of South Africa’s biggest trading partners, their elections will affect us. He is quoted saying:
“We have the African Growth and Opportunity Free Trade Act, which allows our products to be tariff-free. If that were to be reversed in the next term, it could have a detrimental impact on many areas in South Africa.”
An IOL.co.za article about the effects of the US presidential election on South Africa also reiterates that the outcome stands to affect US Foreign policy towards developing nations. The two parties approach to China differs.
What is the United States problem with China?
China is a rising global influence that, according to both Biden and Trump, has abused its economic power in terms of international trade. Although they both agree that China is a problem, the two camps, however, have differing approaches.
Trump’s approach is raising tariffs on specific industries and has hinted at withdrawing from the World Trade Organisation over China taking advantage of trade rules that are for developing nations. Biden does agree that trade with China must be restricted but, he condemns Trump’s aggressive tariffs.
How does this affect South Africa?
The two economic superpowers are in a tug-of-war to gain influence in developing nations around the world and the competition often than not, negatively affects developing nations the most. The African Development Bank reported that Africa was the second-fastest growing economy in the world, and that’s the source of the tug-of-war between the US and China.
The US wants loyalty from Africa, and a Trump administration could potentially mean that receiving US aid will be dependent on cutting ties with China, this will result in African nations losing US funding. China has better infrastructure, roads, and loans.
The article gives the following example:
“The Africa Growth and Opportunity Act (Agoa), which gives sub-Saharan nations greater access to the US market, allowed South Africa to export more than $7.5 billion (R121bn) to the US in 2019 alone. Lesotho created more than 46 000 jobs in the textile industry because of this act, and if the Agoa is terminated then all those jobs are at risk of being lost.”
Biden has a more targeted approach; finding a plan that supports US workers while creating alliances with other nations that will keep China in line.
In short, if Trump becomes president for one more term, South Africa could suffer as collateral damage. We’ll update this article as events unfold. For further reading on how the US election will affect South Africa, click the links below: