
Why the US election is good for UK business
By Fiona Couper on Monday, 28 October 2024
Last week the BritishAmerican Business AGM included an illuminating view on the US election and what it means for business and investment. The fireside chat was with Lew Lukens, Senior Partner at Signum Global Advisors who work with financial institutions and multinational businesses to anticipate and assess policy agendas that will have a material impact upon markets, sectors, and asset classes.
With depth and candour the key outtakes for me are summarised below, including the implications for trade and tax.
Spoiler alert:
- His prediction is that Kamala Harris will win (due to high voter enthusiasm within the Democrats and her appeal with the young, African Americans and educated women.
- Republicans will take control of the Senate.
- Democrats will take control of the House.
The almost even split along party lines forces the United States to keep a middle road where anything too challenging is virtually impossible to get passed - no matter which Presidential candidate wins.
Much was discussed about the undecided voters who want to know more about both candidate’s policies. Kamala is perceived to be running a good campaign despite the perception during September of having avoided national media. In contrast, Trump’s campaign managers have a more difficult challenge in trying to get Trump talking about the economy and immigration as he prefers to be driving turnout of his base.
In terms of Trade, if Kamala wins then no further liberalisation of trade is expected as she will be continuing the already in place Biden policy. Keeping China out of US tech, protecting US workers and backing US business will be top of her agenda. If Trump wins then global markets can expect 10-20% tariffs on goods into the US with the EU coming in for a particularly difficult time. The UK could do well though as Trump is much warmer towards the UK, having a Scottish mother plus a love of golf.
On Tax, Kamala will likely raise Corporate rate tax and personal tax on the more affluent. The current tax cuts set by Trump in 2017 are due to expire at the end of 2025 with Trump expected to push for further cuts from 21% down to 15%.
Overall, with only 24 seats out of the 435 seats in the House in question, radical change or tax cuts are unlikely.
Business likes stability and that will continue to be offered no matter who becomes the next President of the United States. The special relationship with the UK looks set to continue with more than 30% of the recent £60bn international investment - announced by Keir Starmer at the International Investment Summit at the Guild Hall on 14th October - coming from the US.
The US perception of the new UK Labour Government and Keir Starmer is of a sober, serious leadership that is not 'anti-business', who have been seen to have brought business and the city along with them. Strong conditions for trade relationships and inward investment to the UK.
Top tip: For those not wishing to stay up for the three nights involved before the election is declared, if on the night of Thursday 5th, Kamala manages to win the swing stage of North Carolina, then she’s won. Watch this space!