What could Donald Trump's presidential victory mean for UK business?
The most dramatic US election, in living memory, is over and the result is in: Donald Trump is the president elect of the United States of America . Of course, none of us know yet which of his campaign "promises" will translate into policy and action come January 19th 2017 but we've highlighted a few areas that MAY affect UK businesses.
We export upwards of £30bn worth of goods and services to the US, a little ahead of what we sell to Germany and about four times what the UK sends to China. It is a market that matters. Trump has spoken out against free trade though, so there could possibly be a rise in import duty, in some industries, such as steel. On the flip side, he's specifically singled the UK out previously regarding trade and a victory for the Republicans may mean we are nearer the front of the queue for a post-Brexit trade deal.
The negotiations on The Transatlantic Trade and Investment Partnership (TTIP) are likely to end. As the UK will no longer be in the EU, this will not have a direct effect, but as a consequence will it be difficult for the UK to negotiate a deal with the US? But, we do have that, "special relationship" to fall back on when it comes to negotiating a deal.
The US already makes it difficult for the importation of some goods (and you know our advice about Commercial Invoices to accompany goods going to the US!). Will the new President seek to increase barriers?
We can expect substantial investment in US infrastructure, but this is not likely to benefit UK companies as contracts are likely to go to US companies.
Another effect for UK businesses is that it could be more difficult to get work permits in the US for UK business people.
The UK has leading scientific advancement to offer in Green technology. However, the Trump administration may undermine real progress. Trump has already dismissed global warming and there may be no encouragement of reducing carbon emissions under his administration.
US tax cuts and deregulation (something Trump has mentioned he'll be doing) which, arguably previously (in the 1980s), landed the US with twin giant deficits in trade and public finances could possibly come to light. However, if it did work, Americans might have more cash in their pockets to spend on British Range Rovers, British clothing and holidays to the UK. Oh, and a quick note on the latter; there's one business empire that is certain to flourish in the next four years. Good luck getting a booking at Trump's Scottish golf courses when the president is in town or any of his other hotels, casinos and resorts for that matter.
So what should UK companies do? There are two options: first, look for alternatives to export your goods to (which you are likely reviewing regularly anyway). Or set up subsidiaries in the US (I can think of 3 of our current clients who have gone down this route in the last 6 months), so if a company operates in the US it won't be affected by the new trade barriers. Also, it's probably worth speaking with your Foreign Exchange partner to make contingency plans in the event of another crash come the New Year.
"The negotiations on The Transatlantic Trade and Investment Partnership (TTIP) are likely to end. As the UK will no longer be in the EU, this will not have a direct effect, but as a consequence will it be difficult for the UK to negotiate a deal with the US? But, we do have that, "special relationship" to fall back on when it comes to negotiating a deal"