Energy News 16/06/2017
Michael Gove is appointed energy secretary, suppliers continue to fall short on digital offerings and global e...Read More
Trump is the most controversial candidates in recent history, and his campaign has been dogged by scandal, party infighting and criticism from all quarters.
Whilst a Clinton victory would largely preserve the status quo, a Trump presidency would be an unknown quantity.
So what would happen if he actually won, and how would UK businesses be affected?
The most obvious way a Trump win would affect British business would be through the economy – the global markets are still shaky post Brexit, and another shock at this stage could be extra damaging.
In the event of a Trump presidency, economists predict that there would be an instant drop in the markets – much like we saw after the Brexit vote. Economist Simon Johnson has suggested that a Trump win could even plunge the world into a global recession. Whether the markets recovered would depend mainly on what happened next – and how many of the candidate’s more extreme policy suggestions were actually implemented.
It’s not all bad though. One benefit of a Trump win could be an influx of talented American workers and innovative companies who may choose to locate in Britain, instead of the States. The EU may also soften Brexit negotiations in order to keep the UK sweet after losing an ally in Washington.
If the dollar took a tumble post election, firms could take the opportunity to invest in the US, whilst companies that import from the States would get more for their money.
The US has a long-standing ‘special relationship’ with the UK. However, earlier this year, Barack Obama warned that if we left the EU the UK would go to the back of the queue when it came to trade deals. On the other hand, Donald Trump is a vocal proponent of Brexit, and has stated that, if he were President, the UK would not be negatively affected in trade negotiations.
Trump distrusts the EU, and may prefer to work with the UK rather than Brussels. However, he is also notoriously thin-skinned, and has been roundly criticised by a number of prominent UK MPs, including Boris Johnson. Would he hold this against us if he won the White House?
Trump’s foreign policy has been described as ‘isolationist’, particularly his mistrust of Nato and opposition to free trade, which he thinks costs the US jobs. If he won the election it would probably be the end of the troubled US/EU TTIP deal.
Trump has pledged to take on China, who he believes is giving the US a raw deal. He has proposed a 45% tariff on the country which, if implemented, could cause China to retaliate, potentially resulting in a trade war where both countries levy increasing tariffs on each other. Some economists have theorised that a this would result in recession for both China and the US, which would have a knock on effect on global markets.
Unsurprisingly, Donald Trump is friendly to big business. He has proposed slashing corporate tax rates from 35% to 15% in an effort to lure business to the US. He has also indicated that he would repeal the Dodd-Frank regulation, which was created to stop irresponsible lending by banks after the financial crisis.
Whilst this would affect the US more than the UK, it could have a knock on effect. Recent warnings stated that businesses were likely to flee to New York if the UK became less attractive post Brexit. The relaxed regulations and lower taxes of a Trump presidency may encourage this, or the increased volatility of the American economy could make the US less attractive for business.
Does the prospect of a President Trump worry you? Let us know on Twitter @switchmybiz.
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