The United States presidential elections on November 5 will be much more important for the future of the global economy than any other electoral process, including Mexico, because different visions of the world’s most important economy and main trading partner are at stake. of the country, as well as the level of protectionism in global trade, said Ernesto Revilla, chief economist for Latin America at Citigroup.
In interview with The Conference, the specialist explained that the financial markets think that if Donald Trump became president of the United States again, uncertainty about global trade would return because he would probably be more protectionist; In addition, doubts about the geopolitical conflicts that exist would increase, because the United States would rethink the support it has given to Ukraine or Israel or in some other conflict zones.
The market is less focused on the Latin American elections this time, as they are more concerned about those in the United States, which will be held in November, and which shed more unknowns about the continuity of that country’s economic policy.
Revilla specified that in general there are unknowns about how the United States economy will be managed in the face of one candidate or another. The roles have changed, while the elections in Latin America today do not worry the markets, unlike in the past.
“The uncertainty that is going to cause greater volatility is that Trump wants to encourage the relocation of value chains to the United States and that could reduce Mexico’s beneficial potential in the issues of nearshoring; Perhaps Trump wants to focus on migration and drug trade, particularly fentanyl, against Mexico, probably using the 2020 T-MEC review as a negotiating instrument, and it is precisely all these unknowns that make the United States election of many consequences, not only for Mexico, but for the global economy,” Revilla highlighted.
The scene in Mexico
Although the US elections are still far away and in the neighboring country there is an electoral college system, where certain states are very important for voting, it seems a toss-up for Trump or Biden to win, but this will be resolved in the summer, he commented. the Citigroup economist.
Unlike six years ago (June 2018), when Citigroup’s central scenario was that Andrés Manuel López Obrador would win the elections, the financial firm’s chief economist for Latin America maintained that this time they do not have a base scenario.
Although we do not have a particular forecast on these elections on this occasion, it does seem to me that what is discounted in the market is a potential victory for Claudia Sheinbaum, presidential candidate of the Let’s Keep Making History coalition, simply by seeing the surveys at the level they are at and the trajectory they have had. Although, of course, we are still in the campaign, we continue to carefully watch the evolution of the polls, although there is less and less time and we believe that it is difficult to change the trajectory that is seen at this moment
.
He clarified that it is not that the markets do not care about the Mexican elections, but that in general they consider it highly probable that if Sheinbaum wins, the current economic continuity will be maintained.