The election prospects for Donald Trump and Joe Biden may change dramatically in the coming weeks.

The US government, led by the president, Donald Trump, faces an unprecedented challenge in its effort to minimise the human and economic toll of the coronavirus (COVID-19) pandemic. Following an initially slow, piecemeal response to the virus in the US, the federal government has scaled up its efforts since mid-March. However, the measures needed to flatten the curve and ultimately to bring the outbreak under control—including stricter social distancing measures, travel restrictions and school closures—will push the US into a recession in 2020. The Economist Intelligence Unit now forecasts that real GDP will contract by 2.9% year on year in 2020—a deeper recession than that caused by the global financial crisis in 2008-09.

For Trump, it’s the calm before the storm

Before the outbreak of coronavirus, Mr Trump was well-positioned to win a second term in the November 2020 elections. His re-election is now seriously in doubt. For now, Mr Trump’s popularity appears unaffected; according to national aggregate polls from FiveThirtyEight, his net approval rating recovered to -3.5% as at April 1st, from -10% in mid-March, and the highest level since his second week in office. More than half (53%) of Americans approve of Mr Trump’s handling of the pandemic, according to CBS News polls from end-March. Even so, two-thirds of respondents said that the administration was not well prepared to handle the outbreak.

However, public institutions will come under serious strain in the near term as the number of COVID-19 cases—currently the highest in the world—continues to spike, healthcare facilities are overwhelmed and unemployment rises to a record high. The crisis’s ultimate impact on the outcome of the November 2020 election political stability remains unclear for now, but it will be shaped by two things: the effectiveness of the government’s efforts to contain the virus, and whether or not voters attribute the impending recession on the Trump administration’s poor initial response. These factors will become clearer by end-April.

The economy is key, but not the only deciding factor

Risks are mainly on the downside for Mr Trump. The outbreak has swept away a major plank of his campaign platform: the robust economy (now forecast to slip into recession) and record-low unemployment (now forecast to exceed 10% on average in 2020). Mr Trump’s repeated claims of nurturing a record stockmarket boom have also turned hollow, as market volatility since the COVID-19 outbreak has wiped out market gains since he took office. The state of the economy is a critical factor in determining voter behaviour. For example, only three of 12 elected presidents since 1945 have failed to secure a second term; in two of these cases (Lyndon Johnson in 1968 and Jimmy Carter in 1980) the economy was in or heading towards a recession.

Mr Trump has the added advantage that his likely Democratic opponent, the former vice-president, Joe Biden, has struggled to be heard. Mr Biden and his campaign team have crafted a coronavirus response strategy that focuses on the quick, effective implementation of the government’s US$2trn economic aid bill, including practical efforts to speed up cash payments to households. However, his campaign will be unable to match the daily exposure that Mr Trump is trying to capitalise on, as his administration leads the national pandemic response.

Mr Trump has presented himself as a “wartime” leader in recent days as the spread of the virus has accelerated. His pivot may work if the pandemic turns out to be short-lived and the death toll is contained. Mr Trump’s concern about the cost of shutting down the economy has found wide support in the business community and among hard-hit workers. But it also comes with high risks. Soaring unemployment, economic distress or mounting strains on the healthcare system could turn public opinion against him in the coming weeks. Much depends on whether voters put the blame on an uncontrollable external risk or the administration’s response.

We created a dedicated hub for the US 2020 election coverage that identifies and investigates the three biggest economic questions for the fast-approaching US 2020 election, and how possible election outcomes can impact your business. To learn more, visit the US 2020 website.