Spotlight On The US Elections

Article by Jasper De Zoeten

As the US election race for the next president gets underway, we felt it relevant to explain how the US election process works and who the main contenders are. The US election race begins with caucuses and primaries. These two methods used by the states are run differently but basically serve the same purpose; electoral candidates attempt to gain as many delegates as possible. A delegate can be any party member but tends to be party activists and local political leaders.

Caucuses are a dated voting practice in America. They are local meetings run by political parties and the voting population hear from the candidates for that particular party. Votes are counted by attendees raising their hand for their preferred candidate. In a caucus, candidates must receive at least 15% of the vote and people who voted for someone that did not receive at least 15% recast their vote until the remaining candidates all have at least 15% of the vote.

Primaries on the other hand, are the more common form of voting where people vote anonymously at a polling station much like the UK.  Both caucuses and primaries are conducted in every state plus Washington DC in order for parties to select their presidential nominee. Those candidates who received at least 15% of the vote will then be awarded ‘delegates’, the number of which depends on the state.

Once the caucuses and primaries are complete, the republicans and democrats hold their national conventions, which will culminate in each party officially designating their candidates who will then go onto battle in the election. So, who will Donald Trump’s biggest competition be?

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https://www.nytimes.com/interactive/2020/us/elections/democratic-polls.html

According to the national polls, Trump’s current strongest competition is Joe Biden Jr. followed by Bernie Sanders and Elizabeth Warren, as shown in the below chart. What is still clear is that the 2020 elections will be far from an easy election for President Trump and there are a number of policy areas that could see voters tilt towards the democratic candidates. Poor approval ratings on matters such as immigration, healthcare and foreign policy will weigh on Trump’s ability to gain votes. However, voters do not necessarily vote for policy alone.

In total, 538 electoral votes are divided between the 50 states plus Washington DC, depending on the state population. However, in the US election, the candidate who wins a state receives all the electoral votes, meaning that the US election can be won without a popular majority, as achieved by Trump in 2016. With Trump standing a high chance of being sworn in as the Republican nominee, focus will be on who comes out of this initial stage as the Democratic frontrunners and go up against Trump for presidency.

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https://www.cnbc.com/2019/11/05/how-biden-warren-and-sanders-fare-vs-trump-in-2020-election-polls.html

As the election unravels and the frontrunners become clearer, we will ensure that we understand the potential economic and financial impact of the individual candidates’ policies and the potential impact on North American investments. Nevertheless, we continue to remain positive on the region and will only look to alter our view if we see a material change to our investment thesis for the region.