Flint advises international businesses and investors on policy, politics, regulation and competition.
Flint advises international businesses and investors on policy, politics, regulation and competition.
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Over 2 billion people – a quarter of the world’s population – will be affected by elections in 2024, including in the US, EU, UK, Taiwan, India and Russia. Some will have significant global implications, though in many cases the full effects will not play through until 2025. This blog explores the upcoming elections and its potential wider implications.
The 2024 elections will take place in a contested and fragile international context. Russia’s invasion of Ukraine will continue. Conflict has returned to the Middle East. The geopolitical standoff between China and the US will persist. Elections in Russia, Ukraine and Taiwan will raise the temperature.
The US presidential election is the most important known political event in 2024. Victory for Donald Trump would create a large amount of uncertainty globally as he could wind back flagship Biden reforms, including the Inflation Reduction Act. The impact is that western unity would be weakened and American policy would be less predictable on the Middle East and Russia.
The European Parliament election will be followed by the appointment of a new EU Commission. In the UK the Conservatives are likely to lose power after 14 years leading the government. In many cases, the electoral dynamics in one country will have knock-on impacts elsewhere, and economic difficulty will be a dominant theme. Concerns about disinformation and electoral manipulation will be high surrounding these major political events.
Political uncertainty will mean operational uncertainty for businesses. The trend towards protectionism is likely to continue. As governments during campaigns prioritise short-term electoral advantage, policy coherence on issues like climate, tech regulation and energy will be more elusive.
Barring illness, accident or the Grim Reaper, this will almost certainly be fought by Biden and Trump. It is unlikely that legal proceedings against Trump will have ended before nominations are finalised, but he will spend much of the campaign defending himself in court. Concerns about Biden’s age and capacity persist. Democrats are bullish about another Biden-Trump contest given Biden’s lead among independents and swing voters, but Trump has repeatedly defied expectations. The election will be extremely divisive on social issues.
While a second Biden administration would provide continuity, a second Trump administration would be unpredictable. His policy positions remain largely unarticulated and are in any event subject to change.
Either candidate would continue significant industrial policy and protectionism. A Trump administration would probably seek to reverse some of Biden’s reforms, for example scaling back the Inflation Reduction Act (IRA), lowering clean energy incentives, and focusing less on ESG. Trump would be likely to reverse Biden’s more aggressive approach to competition, for example in the tech sector, which could include repealing many of the rules introduced via executive order in 2021, and being more permissive on global M&A clearance.
Although the focus will be domestic, regional tension in the Middle East and conflict in Ukraine will demand attention. Trump could scale back US support for Ukraine, and tensions with the EU and NATO could resurface. A tough stance on China has bipartisan support – a Republican administration could ratchet this up further. The erosion of international norms and institutions seems likely to continue, especially under Trump.
The EU 2024 political transition will take place in June and July in two stages. EU citizens will elect new members of the European Parliament on 6-9 June, then EU member states will make key appointments, including the new President of the European Commission and Commissioners.
Current polls suggest a more fragmented and unpredictable European parliament. The centre-right EPP is expected to remain the largest political group, while the national-conservative right could make significant gains. Extremes on the far-left and especially the far-right could advance at the expense of the centre.
In the Commission’s new five-year mandate, we expect some course corrections on the overarching policy agenda. While environmental and digital regulation will remain priorities, there will be pressure to slow the pace of reform, including a push to reconcile the EU Green Deal with economic competitiveness. The EU budget will be under pressure, affecting spending policies on agriculture, structural funds and defence. Enlargement to include Ukraine will be a huge issue. Economic security and strategic autonomy will remain headline political objectives in response to competition with the US and China. Uncertainty over the US election will strengthen this case.
The China-Taiwan relationship is tense and Taiwan’s presidential election in three months’ time could be a flashpoint. The China question is always central in Taiwanese elections, with candidates adopting pro-nationalist or mainland-leaning positions. While domestic issues will be on the minds of many voters, China will read the outcome as an indicator of whether peaceful reunification will ever be possible.
At present, the current Democratic Progressive Party (DPP) Vice President and outspoken critic of Beijing, Lai Ching-te, is ahead. However, if mainland-leaning opposition figures can form a coalition, they could defeat him. A DPP victory would increase tensions with China, with consequences for businesses, such as the tech sector, that rely on cross-Strait trade and investment. A sharp rise in tensions could have broader implications, such as sanctions against companies perceived to be over-indexed on either side. This would have implications elsewhere – for instance in the US presidential election campaign.
An opposition victory could ease tension between Taiwan and mainland China in the short term, including possible initiatives to promote cross-Strait economic integration. But it would not resolve the long-term dilemma of Taiwan’s future.
In the UK election (likely autumn but possibly spring), campaigning will focus on domestic issues, notably the economy, public services and immigration. Current polling suggests a high likelihood of Labour forming the next government. Whoever wins will face big challenges – weak productivity and economic growth, strained public finances, and public services needing reform and investment.
The pillars of Labour’s approach in opposition – fiscal discipline and partnership with the private sector to drive economic growth – would continue. While we expect policy continuity on many issues, there are some, like employment and trade union rights, where Labour would make changes.
The UK’s approach to Russia and China would not change. Labour would seek a better relationship with the EU but may struggle to get traction if they are not prepared to consider a significant shift on the customs union or the single market. The case for rapprochement with the EU would be stronger in the event of a second trump presidency.
Narendra Modi’s Bharatiya Janata Party (BJP) has dominated Indian politics since 2014 and enjoys significant support – in part due to strong economic performance. Modi is expected to win against Rahul Gandhi, the leader of a coalition opposition, who is a weak campaigner. But five major state elections will take place between now and next April, which could give either the BJP or the opposition extra momentum.
A third Modi government would continue to prioritise business-friendly reforms and pursue greater Indian influence internationally. It will remain neutral on some controversial issues like the war in Ukraine and continue to present itself as a leader of the developing world. The tension between India and China is likely to grow further, and India’s relationship with the US will develop. However, Modi’s international status may be further hampered by the Hindu nationalism of his party and its communal policies.
Russia will hold the first round of its presidential election in March, with a possible second round in April, ironically coinciding with Ukraine’s presidential election. It will be neither free nor fair – Putin will win – but the electoral dynamics, including protests, may indicate the level of internal opposition. With Russian security forces focused on Ukraine, internal security may be precarious. The risk of a serious incident will be higher outside major metropolitan centres. Russia’s approach to the war in Ukraine will remain unchanged – Putin wants a long war in the hope that Western support fades. He will want Trump to win in the US. The war will continue to act as a drag on the Russian economy, which could require further measures to shore up the currency.
This blog was written by Katie Whitting, Francois-Joseph Schichan, Mark Austen and Matthew Lehrfield. For more information on the topics discussed in this blog, simply fill out the form below and a member of our team will be in touch.