Executive summary

Since his surprise election victory in 2016, US President Trump has been challenging and changing the political and economic rules. Pollsters, forecasters and investors not only largely failed to predict his win, but misread the consequences.

With this in mind, we have decided to launch a concerted and ongoing effort to analyse the implications of the US political outlook in a structured way.

We start by focusing on four alternative scenarios looking ahead to the outcome of the 2020 elections and beyond: 

Scenario 1:  United States of Trump

President Trump is re-elected. He retrenches his views on international trade and multilateral institutions.

Scenario 2: A Republican phoenix

A non-Trump Republican wins, likely leading to another round of tax legislation, along with establishing protections for privacy

Scenario 3: A Democrat consensus builder

A centrist Democrat wins. Increased federal spending on both infrastructure and healthcare, as well as increased efforts to establish a national single payer service.

Scenario 4: A New New Deal

A populist Democrat is elected. Significant fiscal expansion fuelled by increased corporate tax rates, which includes both support for environmental projects (funding a ‘Green New Deal’) as well as redistributive spending.

As Washington insiders become consumed by the daily minutiae of the road to Iowa and beyond, we hope that this report will guide investors and observers to identify what matters – and what it all means -- as we head towards the decisive vote on 3 November 2020.