Caixin Media October 14th news (Editor Shi Zhengcheng) Three weeks later, the US election, which will affect the future policy direction of the global economy for the next 4 years, is about to take place. The current highly competitive situation between Trump and Harris also forces the capital markets to make preparations on both sides.

Multiple research institutions have pointed out that industries such as electric vehicles, major finance, technology, medical, aviation, media, and other sectors will face significantly different situations due to the outcome of the presidential election. The reasons behind this are related to potential policy changes and regulations that these industry sectors may encounter.MergerEnvironmental and tax policy changes are factors related to the outcome.

At the same time, Wall Street also believes in the saying that "personnel equals policy," so before the next US president is decided, the appointments of key officials in more than ten crucial institutions, including the Treasury Department, Justice Department, Securities and Exchange Commission, Federal Trade Commission, will remain uncertain.

The financial industry eagerly anticipates Trump's "deregulation."

For financial giants like JPMorgan, they are currently facing the most impactful (most restricted) financial legislation since the subprime crisis.

In the final year of Biden's term, the US government is making efforts to modify the banking industry's capital operation model and risk framework, while reducing fees for credit cards and cash advances. This may directly threaten hundreds of billions of dollars in revenue in this industry.

If Trump wins, it is expected that he will re-nominate heads of important regulatory agencies, especially the Securities and Exchange Commission (SEC), the Monetary Supervisory Authority, and the Consumer Financial Protection Bureau. After current Fed Chair Powell's term ends in 2026, he will also nominate the head of the US central bank once again.

Tobin Marcus, the head of US policy research at Wolfe Research, interprets that the Biden administration's regulatory agenda is very ambitious in many areas, especially in the financial industry. If Trump is elected, the officials he appoints will significantly roll back many of these aspects.

Many banking executives and advisors have expressed that if some symbols of the Biden era—such as the proactive Consumer Financial Protection Bureau, halting most mergers, and the slow pace of transaction approvals—can be eased, it would be a "relief."

According to an anonymous CEO of a bank with "assets close to $100 billion," if the president is a Republican, it would definitely be helpful for them. If the Republicans achieve a comprehensive victory in the congressional elections, it would be even more favorable for this industry.

Nevertheless, some industry observers point out that Trump's (potential) 2.0 term may not be as friendly to the financial industry as his previous one. He himself proposed last month to limit credit card interest rates to 10%, while his deputy, Mr. Pence, often criticizes Wall Street.

At the same time, in the event of a Harris victory, she may not necessarily (or be able to) advance these regulatory policies. If the Democrats fail to control both houses of Congress, regulatory agency heads that focus too much on partisan policies will find it difficult to get congressional approval.

Electric Vehicles

Electric vehicle policies are also a major point of contention between the two parties in the USA, which has put the American auto industry in a "hold" state.

Pablo Di Si, the head of Volkswagen USA, stated at the end of September: "Do I make any decisions about future investments now? Obviously not. We are waiting and observing."

Under the leadership of Trump, the Republican Party widely condemns the Biden administration for 'imposing electric cars on consumers.' Trump once promised that if elected, he would revoke many automobile emission standards and incentives for electric car production and consumption. UBS Group analyst Joseph Spak said that in the event of a Republican victory...we will see higher policy variability and potential changes.

In contrast, Harris is generally considered to continue the incentive measures under Biden's 'Inflation Reduction Act.' Although she also indicated that she is unlikely to support regulations such as 'only electric cars can be sold in the market,' automotive industry executives expect that Harris may relax some federal fuel economy regulations, but will not make major adjustments to subsidy policies.

Aviation Industry

In the Biden administration, Secretary of Transportation Pete Buttigieg is known for taking a tough stance to protect airline passengers. The U.S. government has proposed new regulations on refund policies, family separation, and disclosure of service fees. At the same time, the Democratic administration is also cracking down on industry consolidation and organizing cooperation between companies.

Jonathan Kletzel, Head of Travel, Transportation and Logistics Industry at PwC, bluntly stated that who sits in the position of Secretary of Transportation will be very important.

During Trump's previous term, there was no pursuit of similar policies. At the same time, the industry also expected the Trump administration to be more lenient on industry mergers, even though the U.S. market was already dominated by four companies controlling three-quarters of the market.

However, for the U.S. aircraft manufacturing giant Boeing, Trump's tariff policies may lead to a 'double kill' - the cost of importing components from abroad will increase, and as a major U.S. exporter, Boeing may also be affected by global trade games.

Technology industry.

Tech giants are also paying attention to the personnel changes at the White House.

Trump and Pence have stated that if they take over the White House, they will revoke Biden's executive order on the AI industry, including the Artificial Intelligence Security Research Institute set up under the Department of Commerce, which is assessing the AI models of OpenAI and Anthropic. At the same time, they will challenge the SEC's disclosure rules for cybersecurity events of listed companies, emphasizing that this rule 'increases cybersecurity risks'.

The key issue lies in the selection of the chair of the Federal Trade Commission. Under Lina Khan's leadership, the US government's attitude towards industry mergers has become more cautious. According to statistics, the trade volume of the technology industry reached a peak of $1.5 trillion in 2021.MergerIt dropped to $544 billion last year, and so far this year, it has only reached $465 billion.

Many individuals in the technology industry hold opposing views towards Khan, while also anticipating that even if Harris wins, she may replace Lina Khan in the new cabinet lineup.

medical sector

Many pharmaceutical policy experts point out that although both Trump and Harris have proposed to lower drug prices in the USA, the latter is more likely to reduce the amount patients pay (pharmaceutical giants receive less money).

Building on the Biden administration's introduction of the 'Healthcare Collective Procurement' initiative, Harris is also prepared to accelerate and expand this policy, allowing health insurance companies to negotiate drug prices directly with pharmaceutical companies, a move strongly opposed by pharmaceutical companies. Harris also plans to extend the 'annual $2,000 cap on out-of-pocket drug costs' policy to cover all Americans.

In contrast, Trump may not be particularly focused on pharmaceutical policies at the moment. During the debate with Harris in September, he criticized the Democratic Party's pharmaceutical policies but did not propose an alternative, only mentioning having a 'conceptual plan'.

Media industry

Against the backdrop of declining traditional media paying audiences, decreased advertising revenue, and the rise of streaming media, the media industry is also waiting for the right time for regulatory relaxation and merger restrictions.

David Zaslav, CEO of Warner Bros. Discovery, stated in July this year: 'We just need one opportunity of relaxed regulations, so the company can integrate and better accomplish what we need to do.'

Another media tycoon, John Malone, also recently stated that under the current Department of Justice of the Biden administration, some transactions cannot be initiated, such as mergers between companies in the telecommunications and cable broadband sectors.

Of course, another big focus is TikTok. The company is currently in legal battles with the Biden administration over the ban. Trump has previously shifted his stance, publicly supporting TikTok and stating that without this platform, Zuckerberg's Facebook and other social media would face reduced competition.

Editor/Somer