How will US election outcomes affect the UK economy and business landscape?
Ripple effects from the impact of a US election outcome are felt globally and will no doubt effect the UK economy and business landscape.
In this webinar Russ Mould of AJ Bell and our expert in the US, Dean Quiambao of Armanino looked at potential outcomes of the upcoming election in the US and offered some insight into what this might mean for the wider global economy as well as highlighting the impact on UK businesses.
Top tips for UK businesses following the US election:
- The macroeconomic backdrop matters a lot more than who is in the White House when it comes to stock (and bond and commodity) prices.
- The US faces the same debt issue as the UK – and look at the tangle Labour is in already.
- The pronounced policies of both US candidates feel inflationary (or stagflationary) – but talking is easy and getting policies through Congress is a different matter.
- US equities look expensive relative to their history, while UK equities look inexpensive relative to theirs – and the UK may have a sector mix that is better suited to an inflationary or stagflationary outlook (though either would likely lead to more volatility).
- There is a significant focus by US taxpayers on tax planning, especially around generational wealth transfer. With the potential expiration of current US tax provisions, individuals and businesses are actively seeking ways to minimise future tax liabilities. UK businesses and Individuals with interests in the US should take advice regarding how best to structure their finances in the context of existing tax provisions and reliefs expiring.
- The recent increase in funding of the IRS by the US government has led to increased tax collections as the IRS have the capacity to carry out a greater number of tax audits. This trend is expected to continue so UK firms operating in the US need to make absolutely sure that they are tax compliant as the penalties that can be charged if non-compliance is identified in an audit can be significant.
- The large U.S. deficit will eventually need to be addressed, either through higher taxes or significant spending cuts. Harris plans to increase corporate tax rates, which could impact business investments and operations, while Trump aims to reduce them to stimulate economic growth. The knock on effect of either policy could impact UK supply chains and investments.
Click below to hear our panellists take on key points discussed in the webinar:
0:00 – Introduction
2:53 – US Election 2024: What it might mean for the UK slide deck
12:47 – What chance do you think there is of a US hard landing in 2025?
13:55 – Given the deficit that the US economy has had what are people thinking about taxes in the future?
17:50 – What influence can the President exert over the US Federal Reserve and the SEC?
19:18 – Can you give us an insight into the knock on effect to UK businesses who want to trade with the US?
22:33 – What steps are your clients taking now in anticipation of the election results?
24:17 – What could be the foreign policy implications of a Trump or Harris win, with the UK specifically in mind?
26:22 – If Trump wins, what impact will Trump’s suggested increase in import tariffs have on global trade. Would this result in a trade war and if so, what would that mean for the UK’s imports and exports?
27:39 – Is the strength of feeling about who wins the elections strong enough in the US to cause US citizens to consider moving to another country? If so, is the UK still considered an attractive destination given that we are on course to ending some of our beneficial tax regimes such as the non-domestic tax rules?
28:51 – What could a contested result mean, with the UK in mind?
29:48 – US companies have acquired many UK businesses in recent years. Does either outcome of the election make outbound investment into UK companies more or less attractive?
31:02 – What other assets could be affected by the US Presidential result – say commodities or cryptocurrencies?
37:05 – Immigration seems to be a hot topic in the US election. We are thinking of setting up an office in New York. Will any immigration changes have any impact on the ease of sending our people to work in the US? Is either party more positive about business immigration than the other?
37:56 – Is there any sense that Kamala Harris/the Democrats would tighten anti-money laundering laws should they win?
38:40 – Rachel Reeves’ budget is expected to include significant tax collection from tackling tax evasion. Any views on new measures that could be announced to tackle this area?
40:01 – Would the experts sell their US stocks/funds, or buy UK ones?
42:40 – Who do you think will win the election?
If you have any questions about funding your business for growth or would like to discuss the key insights from our webinar, please contact us.
