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Here's what the economy could look like with a Biden or Trump presidency

Allie Kelly,Ayelet Sheffey,Brent D. Griffiths,John L. Dorman   

Here's what the economy could look like with a Biden or Trump presidency
President Joe Biden and former President Donald Trump have different plans for how they'd tackle the US economy if they win the November election. Anna Moneymaker/Getty, Anna Moneymaker/Getty, Tyler Le/BI
  • Voters are concerned about issues like inflation and home prices ahead of the presidential election.
  • BI analyzed Biden and Trump's plans for eight major economic categories.

American voters have a lot on their minds ahead of the November presidential election.

For starters, inflation is keeping the cost of living high in many US cities, and astronomical home prices are preventing aspiring homeowners from buying. Issues like abortion access and tax policy are also a key consideration for many voters.

With the election six months away, Business Insider looked at President Joe Biden and former President Donald Trump's plans for eight major economic categories that affect Americans' daily lives: domestic manufacturing, higher education, healthcare, housing, labor, taxes, tariffs, and trade.

"President Biden is going to keep fighting for working families — lowering the costs of prescription drugs, housing, and childcare; investing in our future; supporting workers and small businesses; and making sure big corporations and the wealthy to pay their fair share," Lael Brainard, the director of the National Economic Council, told BI in a statement.

Business Insider reached out to Trump's campaign team but didn't receive a response.

The analysis is based on the candidates' past records as president and their promises on the 2024 campaign trail.

Jump to a category: Domestic manufacturing | Higher education | Healthcare | Housing | Labor | Taxes | Tariffs | Trade

Domestic manufacturing

Domestic manufacturing
During their tenures in office, Trump and Biden both focused on costs and the labor force for auto manufacturing and steel.      Shi Kuanbing/VCG/Getty Images

The future of domestic manufacturing will be shaped by federal labor and business policy. Although the president doesn't have complete control over the economy, the Oval Office has a role in shaping factors like job growth, tax incentives, and industry regulations. A March report published by The Economist and YouGov found that 22% of voters identified inflation and the price of goods as their most important issue this November. The poll is based on the responses of 1,594 likely voters between March 24 and March 26.

During their tenures in office, Trump and Biden both focused on costs and the labor force for two major American industries: auto manufacturing and steel.

If reelected, Biden plans to continue efforts to keep auto manufacturing in the US and push back against the growing Chinese auto industry. Trump has also expressed plans to protect American car manufacturers. At a March rally, Trump said he plans to raise tariffs on foreign-made cars and suggested there will be a "bloodbath" in the domestic auto industry if he isn't reelected.

As electric vehicles gain popularity, the Biden administration has said it wants to make EVs more affordable and invest in charging infrastructure across the country. Biden is also working to boost US EV manufacturing and increase tax credits for EV drivers. Trump, on the other hand, has said EVs could give Mexican and Chinese manufacturers an advantage and cut US auto jobs.

In light of the pending US Steel Corp sale to Japan's Nippon Steel for $14.9 billion, Biden has said steel should stay domestically owned — but has not yet taken regulatory steps to affect the deal. While Trump was in office, he also made efforts to protect the US metals industry, placing tariffs on steel and aluminum imports.

Sameeksha Desai, a professor at Indiana University and the director of the school's manufacturing policy initiative, told BI that the health of the country's domestic-manufacturing industry directly affects the labor market. Unemployment soared in many manufacturing industries during the pandemic but those jobs made a modest recovery during the remainder of Trump's time in office.

As far as environmental regulations go, Biden has worked to tighten standards for vehicle pollution and expand the use of renewable energy, while Trump has called for the dismantling of clean-energy and carbon-capture tax credits and more investment in fossil fuels.

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Higher education

Higher education
Biden and Trump have major differences in how they view student-loan debt.      Jon Lovette/Getty Images

Biden and Trump have major differences in how they view education policy, particularly student-loan debt.

Since Biden took office, his Education Department enacted a series of reforms to student-loan-repayment programs. For example, after Trump's Education Department ran up a backlog in applications to the Public Service Loan Forgiveness program — which forgives student debt for government and nonprofit workers after 10 years of qualifying payments — Biden's department established a limited-time waiver. The initiative allowed students' past payments that had been deemed ineligible for the program since it was established in 2007 to count toward debt forgiveness.

Additionally, the Education Department is carrying out one-time account adjustments for borrowers on PSLF and income-driven repayment plans to bring borrowers' payment progress up to date. It also implemented the new SAVE income-driven repayment plan in July, which includes a provision to shorten the timeline for borrowers to have their monthly pay reduced.

During his term so far, Biden's administration has canceled $153 billion in student debt for 4.3 million borrowers. And there's still more to come — Biden unveiled details in early April about a new student-loan-forgiveness plan after the Supreme Court struck down his first attempt.

However, that new plan is not set to be implemented until the fall, and should Trump win the presidential election, it could jeopardize Biden's relief efforts. After the Supreme Court decision on debt relief, Trump posted on his campaign website that the ruling was "only made possible through President Trump's strong nomination of three distinguished and courageous jurists to the Supreme Court."

While in office, Trump worked to weaken the borrower defense to repayment, an avenue for relief for thousands of borrowers who were defrauded by the schools they attended. For-profit schools like Corinthian Colleges and ITT Technical Institutes, for example, misrepresented their programs and forced students to take on debt they could not afford. While Biden's administration enacted a range of relief for defrauded borrowers, it's unlikely those efforts would continue under Trump if he were reelected.

More broadly, student-loan borrowers would likely face very different outcomes under a Biden or Trump presidency. While plans for relief would likely continue should Biden win a second term, a Trump presidency could halt the efforts Biden's Education Department already enacted — meaning borrowers would continue to repay their loans without new avenues for relief.

Additionally, the Education Department would likely face more budget cuts under Trump. While in office, Trump proposed cutting billions of dollars from the department, which included eliminating PSLF.

However, he did support capping the amount parents can borrow through PLUS loans, which are loans parents can take out to cover up to the full cost of their kid's education. Those loans have the highest federal-student-loan interest rate, making them difficult to pay off. Trump's budget also called for an extension of the Pell Grant, a grant for those who demonstrate financial need, to incarcerated people.

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Healthcare

Healthcare
Biden has worked to expand the Affordable Care Act, while Trump has said he hopes to "repeal and replace" the law.      Kevin Lamarque/Reuters

Eighty percent of voters believe it's important for Biden and Trump to talk about healthcare costs on the campaign trail, a poll by KFF found.

Biden has worked to expand the Affordable Care Act, while Trump has said he hopes to "repeal and replace" the law and make cuts to Medicare. However, Trump has not publicly outlined an alternate affordable healthcare plan.

In March, the Biden administration expanded the 2022 PACT Act to provide healthcare for millions more veterans, including those who were exposed to toxins while in training or in active service during the Vietnam War, the Gulf War, Iraq, Afghanistan, and post-9/11 combat zones. This follows a 2018 law signed by Trump that allows some veterans to seek VA-funded care at their community medical facilities. Trump has not mentioned new veteran healthcare initiatives as part of his reelection campaign.

The price of pharmaceutical drugs is also a priority for voters, as some Americans say they are unable to access prescriptions due to high costs and drug shortages. While in office, Biden signed the 2022 Inflation Reduction Act, which included provisions to lower the price of insulin to $35 a month. His administration is also negotiating lower prices for 10 major pharmaceuticals, including medications to manage diabetes, arthritis, and heart conditions. The Inflation Reduction Act would require Trump to continue these drug price negotiations should he win a second term. Trump has not focused on drug affordability in his 2024 campaign.

Ninety percent of Democratic voters believe Biden has done more to address healthcare costs, compared to 91% of Republicans who believe Trump did more to address costs while he was in office, a KFF poll of 1,309 US adults found.

Nearly two years after the Supreme Court overturned Roe v. Wade, Biden — along with Vice President Kamala Harris — is emphasizing abortion access as part of his reelection platform. The president said he hopes to restore the Constitutional right to abortion if reelected, despite an evolving stance on the issue during his 50-year political career. Both Biden and Trump support access to IVF following an Alabama Supreme Court decision in February that ruled frozen embryos can be considered people under state law.

If reelected, Trump has said he would not sign a nationwide abortion ban if it were passed by Congress, but his personal stance on the issue has varied during his time in the public eye — and many Americans worry about GOP efforts to limit reproductive healthcare access. Trump said at an April campaign rally that abortion should be a state issue, which could allow state legislatures to continue passing bans that restrict abortion access and place doctors who perform the procedure at risk of prosecution. In an April interview with Time Magazine, Trump also said he would "let red states monitor women's pregnancies and prosecute those who violate abortion bans."

Trump has also said he will ban all gender-affirming healthcare and hormone therapies for minors if he returns to office. Biden signed an executive order in 2022 to enhance protections for transgender children and has taken steps toward banning so-called conversion therapy.

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Housing

Housing
Housing costs present a major challenge for both Biden and Trump.      AP Photo/John Raoux, File

Housing costs present a major challenge for both Biden and Trump as millennials and Gen Zers find themselves priced out of many markets.

The state of the housing market can be summed up by two compelling statistics.

A Gallup survey of 1,013 adults released in April 2023 showed that only 21% of Americans said it was a good time to purchase a home, while 78% said it was a bad time to buy one.

Millennials will play a crucial role in this November as voters in their 30s and early- to mid-40s with growing families cannot live in the communities where they grew up because of the scarcity of available homes and elevated costs.

Affordable housing has been a top concern for Biden, who's aware of the saliency of an issue that could make or break his reelection bid.

With the current 30-year fixed-rate mortgage currently above 7%, many potential buyers simply aren't purchasing homes and are continuing to rent.

For decades, housing has failed to keep up with demand. After the Great Recession and throughout the COVID-19 pandemic, the problem only grew worse. Now, many would-be sellers have decided to stay put, exacerbating a housing shortage that has become one of the most pressing public-policy issues on the local, state, and federal levels.

In the swing state of Nevada, which Biden wants to keep in his column this fall, he recently talked about his efforts to tackle the housing crisis, including the 1.7 million housing units currently under construction. He also noted that his administration planned to create an additional 2 million affordable homes, with thousands of the units poised to be built in the Silver State. However, there's no official timeline for when these homes will be completed.

Housing affordability will also be a key issue in other battleground states including Arizona, Georgia, North Carolina, and Pennsylvania.

Biden also called for more office-to-residential conversions, adding that the administration would create a program to "help communities build and renovate housing or convert housing from empty office spaces into housing."

Such conversions have become increasingly popular in recent years. With legions of employees able to work remotely during the pandemic, many companies have opted to not renew their office leases.

Trump has also zeroed in on the issue. While campaigning in Iowa last year, he said that the key to driving down housing costs was to lower energy costs.

"We'll get the prices way down," he said, referring to energy costs, "and then the interest rates down and then the home builders will start building again."

Trump's record on affordable housing has been mixed. In 2019, he created a White House council to remove impediments to the construction of affordable housing. But during his presidency, Trump also called for major cuts to the Department of Housing and Urban Development's budget. In 2020, he sought to end the Community Development Block Grant program — which offers annual grants to states and local municipalities to fund redevelopment and community services — in the next year's budget, arguing that housing policies were best handled at the state and local levels.

A second Trump term would likely mean the federal government would be more hands-off in shaping housing policy than the Biden administration has been.

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Labor

Labor
Trump is looking to chip away at Biden's union support this fall.      Reuters

Biden has long been an ally of organized labor — even becoming the first sitting US president to walk a picket line last year — but Trump is looking to chip away at the president's union support this fall.

In April 2019, Biden launched his 2020 presidential campaign at a Teamsters union hall in Pittsburgh, putting his primary rivals on notice of his longtime relationship with organized labor. At that time, labor advocates were pushing hard to allow fast-food employees at restaurants like Chipotle and McDonald's to unionize.

Once in office, Biden prioritized passage of the bipartisan infrastructure law, with one of its selling points being the creation of thousands of well-paying union jobs. And last year, Biden's Department of Labor tweaked a rule in how it calculates prevailing wages for construction workers, with the changes affording them higher pay and more workplace protections.

In recent decades, public-sector unions have become increasingly diverse, with more female, Black, and Latino members who have often thrown their support behind Democratic candidates.

But Trump has been successful in earning endorsements from influential police unions like the Police Officers Association of Michigan and the Florida Police Benevolent Association.

Trump's mission is clear: He wants to win over more union households in battleground states like Michigan and Wisconsin. In 2016, Trump made strong gains with these voters, but Biden flipped many of them back into the Democratic column in 2020, promising robust support for the automobile industry. In January, Biden earned the backing of the United Auto Workers after joining them on the picket line, with UAW president Shawn Fain saying: "Joe Biden bet on the American worker while Donald Trump blamed the American worker." Trump responded that Fain "didn't have a clue."

In March, Biden gave the auto industry slightly more time to adopt strict new rules for tailpipe emissions, in a huge win for organized labor, as automakers and unions were concerned about meeting the administration's initial electric vehicle transition proposals. In a second term, Biden is poised to continue his administration's push to advance EV production. Meanwhile, Trump has said that the transition to electric vehicles would decimate the auto industry and benefit China and Mexico.

A Gallup poll conducted in August found that 67% of Americans approved of labor unions, a marked increase from the 48% who backed unions in 2009.

With many Americans working multiple jobs and inflation continuing to take a toll on people, labor unions have fought for higher wages for employees. Looking at the Gallup survey, 61% of Americans said that unions help the economy more than they hurt it, a figure that exceeded the previous high-water mark from 1999.

Trump has made the economy the hallmark of his campaign, touting low pre-COVID-19 unemployment numbers, especially among Black Americans. In both September 2019 and February 2020, the overall unemployment rate hit 3.5%, which at the time represented a 50-year low.

When Biden took office in January 2021, the unemployment rate, which rose sharply during the COVID-19 pandemic, sat at 6.4%. But unemployment hit a modern low of 3.4% in both January 2023 and April 2023, a figure that hadn't been seen since 1969. In April 2023, Black unemployment hit a record low of 4.7%.

The unemployment rate has risen since last year, but it remains below 4%.

Biden has overseen a strong job market throughout much of his administration. In March, employers added 303,000 jobs, far exceeding the 200,000 jobs that were projected. The latest figure represents the 39th-straight month of job growth, which is tied to the president's argument that his policies have created an economy in which the number of jobs — and wages — have risen.

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Taxes

Taxes
There's likely to be some bipartisan agreement over taxes under either a Trump or Biden presidency.      Bob Levey/Getty Images

Earlier this year, the White House released Biden's tax priorities should he secure a second term. They're largely focused on ensuring big corporations and the wealthy pay what Biden deems their fair share.

According to the White House's fact sheet, Biden's tax plan would seek to raise the corporate tax rate from 21% to 28%, and the minimum corporate tax rate from 15% to 21%. This differs from Trump's tax plan: His 2017 Tax Cuts and Jobs Act established a 21% corporate income tax rate — a decrease from 35% — and Trump would maintain that rate, Bloomberg reported.

Additionally, Biden wants to require billionaires — the richest 0.01%, or people worth $100 million or more — to pay at least 25% of their income on taxes every year.

The White House said that Biden's tax plan would cut taxes for middle- and low-income people by $765 billion over 10 years. This would be accomplished by restoring the fully refundable expanded child-tax credit, which was first enacted under the American Rescue Plan in 2021 and gave $3,000 per child to families with children over the age of 6, and $3,600 per child to families with children under the age of 6.

Biden would also increase the Earned Income Tax Credit, which is a refundable tax credit for working individuals or couples.

While Trump has not yet released a detailed tax plan, many of the provisions in his 2017 tax law are set to expire in 2025. Biden's tax plan would support extending Trump's tax cuts for households making under $400,000 a year, but some Republican lawmakers want all of Trump's provisions extended past 2025, and they introduced a bill last year to make the tax law permanent.

Trump has also proposed a 10% tariff on goods coming into the US, along with a 60% tariff on all imports from China. The Tax Foundation, a nonpartisan think tank, has said the proposed 10% tariff would raise taxes for Americans by over $300 billion a year. Trump recently said during an interview with Time Magazine, however, that the 10% tariff could end up being higher.

Given that Democrats and Biden are on board to extend some of Trump's tax cuts for low- and middle-income households, there's likely to be some bipartisan agreement over taxes under either a Trump or Biden presidency. But there's a significant divide over how much wealthy individuals and corporations should be taxed.

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Tariffs

Tariffs
Trump's tariffs may have contributed to a spike in the price of washers, dryers, new cars, furniture, and other goods.      Apriori1/Getty Images

During his presidency, Trump imposed sweeping, unprecendented tariffs on imported goods. While Biden has left some of Trump's tariffs in places, he is far from the self-proclaimed "Tariff Man."

Unlike traditional Republicans, Trump is proudly a protectionist. While he's changed his views on many other policy issues, the former president has for decades bashed the US trade deficit and sweeping deals like the North American Free Trade Agreement, saying the agreements had harmed workers.

Trump's tariff barrage relied on Section 232, a provision of the Trade Expansion Act of 1962, which allowed his commerce secretary, Wilbur Ross, to declare some imports a national-security risk. The former president wasn't afraid to use this power against US allies, which outraged European and Canadian leaders. In response, other nations imposed retaliatory tariffs. But Trump's approach helped secure the US-Mexico-Canada Agreement, a NAFTA substitute.

But those disputes paled in comparison to China's reaction. Beijing, by far the biggest target of Trump's tariffs and other trade actions, responded by suspending purchases of US agricultural exports and imposing other retaliatory tariffs. The Trump administration spent billions bailing out US farmers as it tried to manage the political and actual costs of the trade war. Trump and China eventually announced a deal to soothe tensions, but Beijing never purchased the additional US goods it said it would under the so-called "Phase 1" agreement.

In response to criticism, Trump argued that foreign countries were footing the bill. Many economists pointed out that tariffs are paid by US importers. Consumers are also likely to face higher costs on goods that are subject to high tariffs. Both Biden and Trump's teams dispute that tariffs can lead to higher costs for consumers. Some economists have found evidence that Trump's actions caused a spike in the price of washers, dryers, new cars, furniture, and other goods. In an April interview with Time Magazine, Trump disputed that tariffs end up costing consumers more. In comments to reporters, Tai defended Biden's decision to keep in place some Trump-era tariffs, arguing that previous price increases "were about the chaos and unpredictability that it created."

Many economists have long been skeptical about countries engaging in trade wars and the tit-for-tat cycle of tariffs that result. An analysis by CNBC suggested that Trump's tariffs were equivalent to one of the largest tax increases in decades based on the revenue they generated for the Treasury Department. Unsurprisingly, not everyone on Trump's team was on board: Gary Cohn, a former president of Goldman Sachs who served as a Trump economic advisor, resigned his White House post shortly after Trump announced high tariffs on steel and aluminum imports.

As a candidate, Biden criticized Trump's trade war with China. As president, Biden brokered a deal with the European Union to largely end Trump's tariffs on its member nations. But Biden has left Trump's tariffs on China largely untouched. In fact, Biden wants to triple US tariffs on Chinese steel. Biden also recently imposed higher tariffs on Chinese electric vehicles, solar cells, and other goods.

If he returns to office, Trump wants to impose more tariffs. He's proposed everything from a flat 10% tariff on every product that enters the US to a 100% tariff on all imported cars.

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Trade

Trade
Biden has left some of Trump's tariffs in place, illustrating the protectionist bent that continues to take hold in Washington.      Niels Wenstedt/BSR Agency/Getty Images

The US is not returning to a pre-2016 trade consensus, that much is clear.

Trump dramatically shifted the Republican Party away from its largely held belief that free trade would help all nations. Biden, like many Democrats in the 1990s, also championed this mindset, which led to the sweeping North American Free Trade Agreement and paved the way for China to join the World Trade Organization.

Biden and his top officials have signaled they also favor a paradigm shift. Katherine Tai, the US trade representative, has argued for a move away from a "colonial mindset" that all too often led to supply chains that preyed on developing countries. The Biden administration's focus is best seen in one of his biggest trade shifts: withdrawing US support for digital trade principles that some progressive lawmakers, including Sen. Elizabeth Warren, say were hijacked by Big Tech companies. Other Democrats have criticized the administration's approach.

Biden has left some of Trump's tariffs in place, illustrating the protectionist bent that continues to take hold in Washington. In April, Biden pushed for even higher tariffs on Chinese steel and aluminum amid his reelection push. European leaders are also concerned about Biden's pursuit of climate-related tax credits that may lure green jobs away from their countries to the US.

If Biden and Trump have anything in common it's their stance on China. Biden has used his trade powers to restrict US investment in Chinese technology, particularly semiconductors, quantum computing, and some artificial-intelligence sectors. As Bloomberg News reported, Biden has even surpassed Trump in adding more Chinese companies and individuals to an export blacklist.

As president, Trump fixated on the US trade deficit even as some economists argued against reading too much into such figures. Still, the trade gap grew under his watch.

Overall, Trump's combative trade policy led to mixed results. He didn't see the fruits of his biggest trade deal, which went into effect in July 2020: the USMCA, a revamped North American trade deal known Experts at Brookings Institution have praised the treaty for growing regional trade. Unlike NAFTA, the USMCA also contains new provisions on digital trade and labor protections. The Biden administration has used the deal to push Mexico over its labor practices.

While Trump has bragged about brokering a historic trade deal with China, economists found that Beijing never lived up to its commitment to purchase an additional $200 billion worth of US exports. He successfully ended US support for the TransPacific Partnership, a massive trade deal that President Barack Obama supported with the hopes it would align much of the region more closely with the US. Trump has pledged to kill the Biden administration's new Asian trade talks, which the former president has dubbed "TPP two."

Some Trump allies have signaled that he'll push the envelope even further if he wins in November. Politico reported that some of the former president's top economic advisors are discussing how to devalue the dollar to boost US exports. It's a risky proposition, as it could drive up the costs of some items that have already risen because of inflation.

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