Hello there,
Even in a world held together by the glue of global trade, a national election in one country rarely rocks the economic fortunes of others. The major exception to that rule will be next Tuesday's U.S. presidential election.
While a Kamala Harris victory is, rightly or wrongly, being viewed as a "Biden continuity" outcome, governments and investors see a Donald Trump win as a case of all bets off. The big unknown remains how much Trump rhetoric would make it into Trump policy.
Look at it from Europe's perspective. It has long got used to the idea that barely anyone in Washington nowadays stands up for a world of freely trading nations - including President Joe Biden and Harris.
But Trump could go much, much further. For him, America's longstanding transatlantic trade deficit is an evil: he wants Europe to pay a "big price" for not buying enough U.S. cars or U.S. farm goods. And if it turns out that price is the 10% or even 20% export tariffs he has talked about, that could cost European manufacturing jobs dear.
In China, meanwhile, sources told Reuters that authorities may approve as early as next week more than 10 trillion yuan ($1.4 trillion) in extra debt in coming years to revive its fragile economy. And they could go even bigger if Trump - who has threatened 60% levies on Chinese goods - wins, they said.
A Trump victory would also send shockwaves through Latin America - even if the impact could fall unevenly. Mexico, whose automotive sector could face tariffs as high as 200% under a Trump administration, has much to lose. But others could benefit. When trade tensions with Beijing ballooned under Trump's first presidency, Brazil got a boost as China replaced all its U.S. soybean imports with Brazilian ones.
But one huge issue on which the disagreement between the two presidential rivals is, if anything, even starker is climate change. For Trump it is a "hoax", while Harris calls it an "existential threat". This potentially makes the election a decisive moment in the world's still-lacking effort to combat man-made global warming.
This week's episode of Reuters Econ World digs into one aspect of that effort. In the nearly 20 years since the first carbon trading market was established as an economic approach to addressing climate change, a patchwork of compulsory and voluntary markets has sprung up. But have they actually worked?
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