Economy & Politics

Thursday June 25, 2020

US Elections June 2020

Speaker:  Adit Jain, IMA India June 2020

The big race and its implications

The outcome of the Presidential elections in the United States is perhaps the most significant issue that influences global geopolitics. Republicans and Democrats have differing positions on international affairs, for instance with respect to multilateral institutions such as the United Nations, World Trade Organisation, NATO and the World Health Organisation and notably, American policy towards various nation states. Clearly, therefore, the outcome of what happens in December is important not only for the United States but for the entire world as it affects global trade, security and the realignment of political equations. Domestic factors are the key drivers to Presidential elections. Broadly, there are now four imperatives in the reckoning. First, the handling of the pandemic by the administration; second, the performance of the US economy; third, the unfortunate death of George Floyd – a black American – at the hands of the police and the terrible riots that followed across various cities; and finally, the souring of relations with China and its role in the spread of the coronavirus.

On the handling of the pandemic, President Donald Trump appears to have lost a few points in popularity. Many Americans blame the administration’s delayed response that led to thousands of deaths his detractors claim could have been prevented. President Trump explicitly blames China, perhaps with justification, for hiding information on the outbreak in the first place. According to a recent study by Harvard University, virus infections may have actually begun as early as August 2019 and China chose to keep this under wraps. Whilst this can hardly absolve the administration, some of the culpability can possibly be deflected away.

On the economy, Mr Trump gets much better scores. America’s unemployment rate pre-covid, at 3%, had fallen to its lowest level for decades. With lower taxes and stronger investment, the United States was poised to sustain decent growth in the near term. Post Covid, however, unemployment jumped with massive lay-offs. More recently, however, reports suggest that there are tangible signs of a recovery with rising numbers of people back at work. The racial divide, aggravated by the death of Mr Floyd, could work either way. Whilst the Democratic constituency has protested strongly against the continued strong-arm tactics of the police force, with peaceful protests in several cities, in many areas these have turned violent with extensive damage to public and private property.

In the years following the Black Lives Matter movement, which championed a progressive push against institutional racism, conservatives rallied around a corollary crusade – Blue Lives Matter. This sought to limit the responsibility of individual officers due to credible threats to their own lives. This assimilation of communities across America emerged as a key voter base for President Trump. Unions representing various law enforcement agencies such as Immigration and Border Control, Customs, Border Patrols even made endorsements in his favour. The Blue Lives Matter Movement argues that protests in response to police actions empowers criminals and demotivates the police force. Republicans have now stressed the illegality of the protests and the resulting mob violence and the administration has called them domestic acts of terror. Even in areas that have usually enjoyed Democratic support, Americans are horrified by the violence in their neighbourhoods.

Hence, Mr Floyd’s death presents diverse implications for the election. Some argue that the riots could empower Republicans, as the insurrections of the 1960s did for Richard Nixon. Social unrest, as a political weapon, is a double-edged sword. It creates news but can also be divisive, consolidating voter constituencies on both sides. As protests over the killing of Mr Floyd gave way to property damage and skirmishes between police and demonstrators, squad cars were smashed, grocery stores were ransacked and retail, including the 121-year-old Central Camera on Wabash, was set ablaze. For the first time since the 1970 Kent State shootings, a Chicago mayor asked an Illinois governor to send in the National Guard. Chicago was the site of two major civil disturbances in 1968: the DNC protests and the West Side riots that followed the assassination of Martin Luther King, Jr. In both cases, Mr. Nixon was the political beneficiary. The most cunning politician of his generation, he clawed his way out of the civic graveyard by promising to end the urban riots restoring “law and order” to the nation.

Finally, the China Factor. A large fraction of the American population holds China responsible for the pandemic that destroyed the US economy and cost thousands of lives. This has even led to acts of racism towards Chinese Americans. President Trump has had no misgivings in blaming China for illegal trade practices, theft of American intellectual property and the loss of millions of jobs that have moved to the east. The trade war with China is effectively the first step in a larger disposition to decouple America’s economy from China’s. Relations have plummeted to levels not seen in decades. American’s realise that a Republican Administration under Mr Trump will deal with China more assertively than the Democratic presumptive nominee, Joe Biden. If the anti-China sentiment – which is likely to be stoked further leading up to December – can be sustained, its impact on the elections may win Mr Trump a few points, or in the least consolidate his vote amongst working-class white Americans.

Most current polls suggest a victory for Mr Biden with an average 10-point lead. Still, the elections are six months away and in the socially and politically charged circumstances such as the one America now faces, it is hard to predict how the penny will finally drop. As far as India in concerned, Republicans have traditionally been better disposed. A Democratic White House may rake issues of human rights, Kashmir and civil liberties, which India finds tiresome. There is a possibility that Democrats may succumb to constituency pressures from progressive lobby groups, undermining the broader Indo-US relationship. The way it looks, senior Democrats on Capitol Hill could prefer to put the heat on India, if only to satisfy certain constituencies with an agenda. While Republicans can cut through the flake to strategic issues, Democrats often have some difficulty. Interestingly Senator Robert Menendez, the top Democrat on the Foreign Relations Committee, introduced a bill on coronavirus, clubbing India with China, Egypt, Turkey and Cambodia as a country that has taken measures that violate human rights without clear public health justifications. Most Democratic co-sponsors of the bill have been critical of Kashmir.

The extent of defence cooperation, specifically in the newly designated Indo-Pacific zone, may lose some of the current thrust, both on a bilateral level as well as on multilateral frameworks such as the Quadrilateral Security Dialogue, affecting joint military exercises. Mr Trump, while transactional in his approach and impulsive, considers India a friend and invited New Delhi to play a greater role in the Afghanistan peace process – an idea quite unacceptable to US policy makers for years. It is not important whether India actually does, but America’s changed stance is a noteworthy policy initiative.

Be that as it may, Indo-US relations have gradually gained ground over the years, beginning with the Clinton Administration. President George Bush had a genuine fondness for India reflecting in greater levels of economic and security cooperation. New Delhi was identified as a partner to play a key role in America’s Asia policy. The Obama Presidency changed stance from an initially lukewarm attitude to one of embrace, improving defence cooperation and placing India at the centre of the strategic pivot towards Asia. Therefore, there are reasons to conclude that a Biden Presidency may view the strategic relationship from a lens different to the pervasive view amongst senior Democrats on Capitol Hill.