The presidential elections in USA will be decisive for the future, not only of the North American country, but of the Western world. In the face of a possible return of Donald Trump or the surprise that would be a triumph of Kamala Harris, What is at stake is opposite ways of addressing key issues such as migration, conflicts and, of course, the economy.
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On this last aspect, experts consider that this year in particular is crucial, since the United States is in an election year, which adds an element of uncertainty and expectation, so the economy will be a key aspect to evaluate, since future economic policies and investment opportunities could be influenced by the elections.
Of course, Colombia and Latin America They have their eyes set on the electoral pulse when it is estimated that USA It is one of the countries where elections can have a positive influence on Latin American investment, since the United States economy is one of the fastest growing in the world.
However, according to figures from the Colombian-American Chamber of Commerce Amcham, 35 percent of our products, goods and services end up being exported to the United States and that means that the northern giant continues to be Colombia’s main trading partner.
“US stock markets hit record highs in 2024, 800,000 new manufacturing jobs were created, the largest increase since the 1970s, US manufacturing added nearly $12 trillion to the US economy and exported $1.6 trillion in goods last year, and Americans created 10 million new small businesses,” he explains to this newspaper. Edgar Pulido, director of Latam in USA Colombia.
According to the expert, inflation in the United States has dropped by more than 7 percent in June 2022 (its highest level since the early 1980s) to its current level of 3.27 percent, so you would think that central bankers would be breathing a sigh of relief. However, from his perspective, they are likely to do anything but that at their monetary policy meeting.
However, it is important to note that the relationship between the elections in the United States and the investment of Latin Americans is complex and depends on multiple factors.
“In the case of Colombia, the country’s shift to the left with the current government of Gustavo Petro has inevitably led to the country no longer being so close to the US government. However, according to figures from the Colombian-American Chamber of Commerce Amcham, 35 percent of our products, goods and services end up being exported to the United States and that means that the giant from the north continues to be Colombia’s main commercial partner,” explains Pulido.
In this context, we analyze how the November presidential elections can influence the investment of Colombians and Latin Americans. USA.
The 5 key factors
- Economic policy: The election results could determine U.S. economic policies, including those related to trade, investment and financial regulation, which could affect the confidence of Latin American investors.
- Bilateral relations: The election could influence relations between the United States and Latin American countries, which may affect investment in areas such as trade, energy and infrastructure.
- Political stability: Political stability in the United States may impact the risk perception of Latin American investors, which may affect investment in the country.
- Financial market: The elections may influence the US financial market, which may affect Latin Americans’ investment in financial assets such as stocks and bonds.
- Foreign direct investment:US foreign direct investment policies may change after the election, which may affect Latin Americans’ investment in US companies
If the Republicans win with Donald Trump, what can we expect?
According to Pulido, if the Republicans win at the polls, “there may be a significant change in US foreign policy, which could eventually affect relations with Colombia.”
“Republicans tend to be more conservative and in favor of a more interventionist foreign policy, which could generate tensions in the region,” he added.
The expert points out that, in terms of foreign trade, in particular, Republicans tend to be in favor of free trade, “which could benefit Colombia ostensibly, in terms of market access and exports.” “However, it is also likely that changes will occur in existing trade agreements, which could impact Colombian companies that export to the United States,” he says.
As for aid and cooperation, Republicans tend to be more conservative in allocating foreign aid funds and this could affect cooperation programs between United States and Colombia, especially in areas such as the fight against drug trafficking and humanitarian aid.
“If Trump wins the democratic contest, there are likely to be changes in US foreign and trade policy, which could affect Colombia in terms of bilateral relations, trade and aid. However, there may also be opportunities for greater cooperation in areas such as the fight against drug trafficking and regional security,” the analyst concludes.
What if Democrats win with Kamala Harris?
If the Democrats win the elections in the United States, Colombians can expect six main axes, starting with the continuation of the policy of supporting peace in the country, as well as an increase in development aid and cooperation, although this will also depend on how the forces are in the legislature.
“The strengthening of the bilateral relationship in areas such as trade and energy could be strengthened, as well as a possible relaxation of immigration policies given that Democrats tend to be more liberal on this issue, especially regarding qualified labor,” Pulido said.
Other areas of cooperation that would be involved would be education, the fight against climate change and citizen security:
On the other hand, a Harris-Walz administration could also lead to increased pressure for respect for human rights in the country. “Democrats tend to be more focused on human rights and may increase pressure on the Colombian government to respect and protect them,” says the expert.
What should you consider if you want to invest in the United States?
- According to experts, the first thing you should do is investigate, do what is called a Due Diligence, that is, a due diligence to delve into the background of the designer, establish who he is and what his history has been.
- Location“Location, location, location, is something that real estate agents repeat over and over again. It is a decisive factor in the purchase of a property,” says Pulido.
- Demand: The product or business you want to enter must arouse a certain appetite among investors, whether due to its return, appreciation or capital gain.
- Barrier to entry: We recommend that the product to be invested in has unique options that make it attractive to potential investors.
- Exit strategy: When liquidating the investment, the client must be clear from the outset about the most appropriate way to liquidate his position. What are the main risks to take into account and what advantages there are at this time?
What are the risks and benefits?
Risks include the fact that investments in the stock market may fluctuate depending on economic conditions and liquidity risk, given that some investments, such as the purchase of real estate, may require time to liquidate.
The advantages include the fact that the United States allows for diversifying investments and thereby reducing risk, the solidity behind the country’s economy and its wide range of business opportunities.
“We recommend investing in real estate, especially in cities with economic growth. However, investment in this area is for long-term consideration, so we advise not to be carried away by market fluctuations. Investments in multifamily and hotels are the best option,” Pulido said, noting that the real estate sector continues and will continue to be the driving force of the US economy after the elections.
STEPHANY ECHAVARRÍA
International Editor
THE TIME
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