[매경이코노미스트] Impact of the US presidential election on consumers

In addition, as customized messages are strengthened in election campaigns due to the development of generative AI technology, consumers are exposed to political information more frequently and deeply, and through this, their consumption is influenced. This shows that AI-based chatbots and digital assistants can induce changes in consumer behavior by providing information tailored to individual political preferences or emphasizing consistency with a specific brand.

Looking at past presidential election season consumption, consumers usually tended to postpone or reduce large-scale consumption ahead of the presidential election due to economic uncertainty and political tension. More specifically, the items where consumption clearly increased before the presidential elections in November 2016 and 2020 were limited to seasonal products such as Halloween candy and Thanksgiving decorations. In 2020, demand for small emergency preparedness items such as political and social science books, security systems, and generators increased, and demand for essential items such as toilet paper and groceries also surged due to COVID-19. However, it is analyzed that the impact of the pandemic was greater than the presidential election.

Let’s look at environmental policy and price stability policy, which are major issues in the 2024 presidential election. In the case of environmental policy, Trump and Harris’s environmental policies were contradictory. This is likely to have a significant impact on the purchase of eco-friendly products such as electric vehicles. Trump has proposed plans to increase fossil fuel production, improve America’s energy self-sufficiency, reduce tax benefits related to electric vehicles, and reduce subsidies for new and renewable energy. Therefore, demand for eco-friendly products such as electric vehicles, solar panels, and home batteries will decrease. On the other hand, Harris is active in eco-friendly policies and proposes a goal of carbon neutrality by 2050, while promising active support for the electric vehicle industry and renewable energy fields. To this end, we propose policies such as expanding tax credits for electric vehicle purchases, expanding electric vehicle charging station infrastructure, and increasing investment in solar and wind power generation. If Harris is elected, it is highly likely that consumers will become more interested in eco-friendly products such as electric vehicles as the expansion of eco-friendly product tax credits is strengthened.

The impact of policies such as rising prices, taxes, immigration, and environmental policies on consumer behavior will gradually be revealed. Harris prioritizes strengthening the social safety net and investing in infrastructure to alleviate rising prices and the resulting burden on consumers. This can help low-income and middle-class consumers stably purchase daily necessities and reduce the impact of rising prices on the purchase of daily necessities. However, these policies may have limitations in curbing short-term price increases, and the effect of improving energy efficiency will be reflected in the mid- to long-term goals.

On the other hand, Trump’s main policy is to increase the efficiency of business operations by reducing government regulations to suppress inflation and to alleviate the pressure of rising prices by reducing energy costs. Trump plans to reduce the burden of rising prices and encourage consumption through tax cuts and deregulation.

There are also predictions that both candidates will further accelerate the U.S. policy to protect its domestic market. Ultimately, depending on the results of the presidential election, new experiences and opportunities for choice will be provided to consumers around the world. It is important for brands and retailers to prepare proactively because this could also spread to Korean consumers who are deeply intertwined with the global economy.

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