US inflation

EIU now expects Trump to win US election

What’s happened?

The weeks following the first US presidential debate, held on June 27th, have represented a seismic shift in the election’s trajectory. The surprisingly poor debate performance of the Democratic incumbent, Joe Biden, prompted a wave of calls among senior party officials, voters and donors for him to end his campaign in favour of a more convincing candidate. Mr Biden’s slipping polling numbers and the party’s indecision over how to proceed have only benefited his Republican rival, Donald Trump, overshadowing the Trump campaign’s own weaknesses. Mr Trump’s standing has also benefited from a failed assassination attempt on July 13th, although we expect that the shooting’s overall impact on the election will be much more limited than Mr Biden’s debate fiasco. Democrats still have options for reviving their campaign, but the prospects for doing so appear narrow. As a result, we now believe that Mr Trump is most likely to win November’s presidential election.

Why does it matter?

Our forecast change reflects the Democratic Party’s weaknesses more than Mr Trump’s strengths. We previously believed that Mr Biden was better positioned to win the election, based on the strength of the US economy, his clearer path to appealing to voters across the political spectrum and his long-standing fundraising lead. However, these advantages have recently diminished, leaving Mr Trump with the upper hand. Mr Biden’s messaging on the country’s strong economic fundamentals has failed to register with voters who are still adjusting to a lengthy period of high inflation. His poor debate performance has fractured his base within the Democratic Party while sapping the confidence of independent and swing voters in his candidacy. Mr Trump has also closed his fundraising gap with Mr Biden, and could benefit further as large donors continue to question Mr Biden’s electability.

Some aspects of our election forecast remain unchanged. We still expect the presidential election to be extremely close, and the risks to our new forecast of a Trump victory are again very high. Mr Trump remains a highly controversial figure, and intense polarisation of the US electorate will prevent him from attracting a new swell of voter support. It also remains possible that Democrats will recover from their recent political fallout. With just under four months until Election Day, Mr Biden theoretically has enough time to restore confidence in his campaign, although a smooth Democratic nominating convention in August and strong performances in any future debates would be essential. Mr Biden could also choose to step aside, which could inject new excitement into the Democratic ticket, especially if it involves a candidate from a battleground state. However, the politics and logistics of manoeuvring such a late change would be challenging. The low popularity of Mr Biden’s natural successor, the vice-president, Kamala Harris, poses additional complications.

What next?

The next month will be an important test of each party’s presidential ticket. The Republican National Convention takes place on July 15th-18th and has already resulted in the resounding nomination of Mr Trump as the party’s official candidate. Mr Trump has also just announced his vice-presidential pick, the 39-year-old Ohio senator, JD Vance. Mr Vance’s humble origins in the Midwest will appeal to Mr Trump’s base and potentially have currency in some of the region’s battleground states. However, Mr Vance’s limited political experience (he first took office in 2023), his populist leanings and his endorsement of Mr Trump’s hardline policies could be a tough sell with moderates, independents, swing voters and the business community.

Democrats will hold their own nominating convention on August 19th-22nd, and would benefit from uniting behind a single presidential candidate well beforehand. Prolonged indecision or a potential “open convention”, whereby multiple candidates vie for the nomination if Mr Biden steps aside, would only divide the party further, leaving little time to mount a compelling campaign against Mr Trump and Mr Vance.  

The analysis and forecasts featured in this article are accessible through EIU’s Country Analysis service. This comprehensive solution provides unmatched global insights covering the political and economic outlook for nearly 200 countries, enabling organisations to identify potential opportunities and risks effectively.