With Joe Biden having been named US president-elect over the weekend, a closer-than-anticipated result in the congressional elections has not given him the clear mandate he would have wanted to implement his policies. 
Such plans that included a large stimulus package and ‘Green New Deal’ may have to be scaled down after failing to soundly defeat the Republicans in Congress in the expected 'blue wave'.
As such, Waverton’s chief investment officer Bill Dinning (pictured) said Biden could face difficulties in implementing campaign policies.
Nevertheless, there will be some areas that he can make immediate changes.
Under Donald Trump the US had rejected multilateralism, pulling out of the Trans-Pacific Partnership trade deal and the Paris Agreement, which sought to bind countries to limiting their impact on the environment.
Biden, on the other hand, is a multilateralist and has vowed to re-join the Paris Agreement on his first day in office.
“Biden has a long history of involvement and engagement in foreign policy,” said Dinning. “One of the reasons that Barack Obama picked him as his vice president 2008 was that he had the perception of gravitas as a long-term Washington senator.
“He was somebody who had gravitas not just in terms of domestic politics, but also his engagement in global affairs and foreign relations.”
While his appointment might usher in more conservative foreign engagement from the US, said Dinning, he would struggle domestically without backing from the electorate and with a Republican Senate.
“This was not a ringing endorsement, at all, for the platform on which the Democrats ran – far from it,” Dinning said. “If anything, it was a rejection of the economic policies of the Democrats.”
Biden would have enjoyed the freedom to enact those policies had the Democrats controlled the White House and both chambers of Congress.
“Everything will be much more muted now,” Dinning added. “There will probably be some more stimulus before the end of year, but the extent of that stimulus is going to be a lot smaller.”
He noted that a large US stimulus package could lead to a much weaker dollar.
“You could have a situation where investors would do what they normally do in that kind of environment, which is to look at leveraged plays on stronger growth, which tend to be in emerging markets, or cyclicals in Europe and Japan,” he said.
The Democrats arguably made a misstep in running an anti-Trump campaign, which contributed to the defeat of Hilary Clinton in 2016.
“The great divisive figure in 2016 was not Donald Trump,” he said. “The great divisive figure that created Donald Trump, arguably was Hillary Clinton because half the country under any circumstances whatsoever was never going to vote for her.
“Everybody either enormously admired or viscerally hated Hillary Clinton and this time I think most people probably thought that Joe Biden was sort of well-meaning albeit a bit past it.”
However, Dinning explained that the divisiveness had now shifted to Trump, which has mobilised the electorate and produced the highest turnout since 1900.
“It’s astonishing in a country that’s almost prided itself on being apolitical,” said Dinning. “However, they didn’t want to vote for a Democratic platform that risks higher taxes and more regulation.
“Despite what we think of green energy policies, if you’re a small business or any kind of business, regardless of the long-term benefits, your cost base will increase in the short term.”
He continued: “In the wonderful way that democracy can operate, you’ve created a situation where you’ve managed to get rid of a president who was probably deemed to be not desperately presidential.
“Yet, you didn’t want that president to be replaced by somebody who was going to control all of the levers of government and enact economic policies which the majority of Americans would struggle to support,” he said. “And magically democracy has produced exactly that result.”
Dinning finished: “So, we’ve ended up here in a sort of slightly fudged outcome, but one that is rather classically American.”