Donald Trump has won the US election winning the battleground states of Pennsylvania, North Carolina and Georgia, although Kamala Harris has not yet conceded at time of writing. It is an extraordinary comeback for Trump and gives him a clear mandate from the American people, with the Republicans taking the Senate back.
A new Trump administration will bring tax cuts, deregulation and mass deportation domestically in America. The USA has long been an amazingly fruitful market for APSCo Global members operating across professional sectors including IT, energy and renewables, life sciences and pharmaceutical, banking and finance and healthcare. Money will be pumped into the economy, and with Trump’s declaration that the USA will “drill baby drill”, members should be preparing for a surge in business.
The financial markets are likely to remain reasonably stable with such a clear rejection of Democrat economic policies. There will be a huge rise in borrowing and government borrowing costs, and multiple tariffs on goods supporting US manufacturing. So in the mid term US debt and inflation are predicted to rise.
We know from Trump’s previous presidency that he tends to enact less extreme policies in practice, delivering aggressive threats being front and centre of his negotiating tactics, as he did with NATO when forcing members to raise their defence spending. However, the Economist magazine fears this still may be the permanent end of the post-1945 US-led era of multi-nationalism. We also know that he is very transactional, preferring unilateral “fair” trade deals very heavily weighted towards the US. He threatens up to 60 per cent trade tariffs on everything from China.
So, what next for our members?:
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Employer costs of operating in the USA and taxes will fall, money will be pumped into the economy through tax cuts and tax breaks and it may become a more deregulated business environment;
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Consumer costs in the USA will rise if Trump follows through on his high tariffs e.g.60% on Chinese goods;
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There will be less opportunities in renewables in the mid term with the return of big oil and the likely repeal of much of Biden’s $369 billion Inflation Reduction Act;
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Defence spending is rising globally but will certainly rise in the USA so opportunites in related engineering markets;
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The world will be more unpredictable, both from national security and economic perspective; and
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This may reunite Europe through the EU, following the friction between Germany, France and others this year.
The UK’s PM Kier Starmer has congratulated the President on his win, pledging to continue the strong UK- US relationship. It may be an opportunity for the UK to be the bridge between the USA and the EU, too early to know. We also don’t know the approach Trump will take to picking his advisors. For example, he may pick traditional Hawkish Republicans, who will advise military pressure on Putin to finish the Ukraine War, the alternative is isolationist advisors who will seek to persuade him to reduce support for Ukraine forcing compromise from them.
Trump in 2024 is not the unknown quantity he was in 2016. Given his experience and his mandate, the rest of the world, including of course business, will need to anticipate and be ready to react and adjust to his rhetoric, his unpredictability and of course his actions. His policy decisions will extend far beyond the shores of the continental USA.
APSCo Global members can be reassured by being part of APSCo, we are well-positioned to support members through an extensive global Trusted Partner network and expertise gleaned from multiple trade delegations to the region, and of course our members’ own lived experiences of operating in the USA.
Please check back on our Resources area for more commentary and updates on this topic over the coming days and weeks.
