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It is around five weeks to the 3 November US presidential election and based on current polling, strategists at ANZ bank place the probability of former Vice President Biden winning at 60% but regardless of who wins, the tough-line approach on China will remain.

 Key quotes

“Current national polling puts former Vice President Biden (Democrat) ahead of incumbent President Trump (Republican) by around seven points. Biden also leads Trump in a number of key swing states, but the margins are less than the nation-wide one. This suggests the race for the electoral college and thus the presidency is reasonably tight. On current polling numbers, we put the probability of Biden winning at 60%. Many political pundits, in what is a close call, think that Democrats will also take control of the Senate and thus will control Congress.”

“Regardless of who wins the presidential election, it’s clear the US has turned a corner in its relations with China and will continue to maintain a hard line. A hawkish stance is a bipartisan view and it seems that a growing majority of Americans are seeing China in an unfavourable way. A recent Pew poll found that 73% of Americans have an unfavourable view of China. Although there is a partisan divide on some issues, most Americans are united on a couple of issues: promotion of human rights on China, and the current economic relationship between the two is bad.”

“We expect Biden to continue with the Trump administration’s assessment that China is a disruptive competitor and is both a national and global security threat. However, unlike Trump, Biden is likely to take a more measured and strategic approach which is less confrontational. Biden is more likely to form strategic allegiances to put pressure on China.” 

“It is unclear whether the tariffs imposed by the Trump administration will remain under Biden. Although Biden has been critical of Trump’s approach, he hasn’t given a commitment to remove the taxes, just a view that they will be re-evaluated. A number of Congressional Democrats appear to be in favour of maintaining some tariffs to protect American workers, though there is recognition that the tariffs are inflicting damage on some industries like agriculture.”

“Should the US stance towards China soften no matter who the next president is, Beijing will certainly welcome more normalised relations and more openness to US business, in our view.”