Apple Stock: What If Biden Wins?
We are now less than two weeks away from election day in the US. Yesterday, I talked about what may matter to Apple and its investors if Donald Trump wins. Today, is it time to look at the flip side of the coin and consider a Democratic victory instead.
Once again, I believe that the two key topics of conversation coming out of the White House that could impact Apple the most are trade and antitrust. This is true, in my view, were Trump or Biden to become President for the next four years.
As a quick reminder, the CNN “Poll of Polls” currently suggests that candidate Joe Biden might have an easy win in November. His lead over President Donald Trump has reached 11 percentage points (see below).
Easier on trade?
Apple is highly dependent on China on the demand and supply sides. Not only is the region a large consumer market, it is also home to nearly half of Apple’s top suppliers.
Due to Donald Trump’s combative approach to trade policy in the Far East, Apple has inadvertently become a target of the Chinese government – a position that the Cupertino company would rather not be in. More specifically, after the US declared war against Chinese tech company Huawei, China threatened to put Apple in its “unreliable entity list”.
Would Joe Biden take a different approach on the matter? As the Japan Times has noted:
In my view, US-China relations will remain adversarial, regardless of who takes over the executive branch of the US government. However, Trump’s trade policy has been highly criticized, particularly his use of tariffs as the main tool of coercion.
While it is hard to know for sure whether Biden would approach the China issue with fresh eyes, I believe that Apple would benefit from a less antagonistic strategy to deal with the second largest economy in the world. The odds of this happening would probably be greater under a Biden administration.
Harsher on antitrust?
While I see Democrats handling the trade issue in a manner that might favor Apple more, the opposite could happen when it comes to antitrust.
To be fair, the war against Big Tech and their dominance in the market seems to be a bipartisan effort. But the Democratic party seems more committed to the cause, while Republicans appear more concerned with “anticonservative bias” than anything else.
Consider Dem Representative David N. Cicilline. He is the chair of the House Antitrust Subcommittee, which in turn has more Democratic (8 members) than Republican (5 members) representation. According to Politico:
It is unclear, however, whether Joe Biden would make antitrust a major policy theme. The topic does not come up among the candidate’s list of “bold ideas”.
It may help that (1) the Biden-Harris ticket at least seems less extreme on the Big Tech issue than Elizabeth Warren or Bernie Sanders might have been, and (2) Kamala Harris, a Senator from Silicon Valley’s home state, born in the Bay Area, seems to have a friendly relationship with the industry. Some have even argued that a Democratic win in November “could benefit Amazon and Big Tech on antitrust”.
Do you have an opinion on this subject? Leave your comment below!
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