Donald Trump’s shock win in the US presidential election has left many businesses asking: what next? We’ve collected some top comments from key industry figures about the road ahead…
“Similar uncertainty to Brexit”
Christian Stadler, Professor of Strategic Management, Warwick Business School, said: “Trump’s victory brings a similar uncertainty as Brexit did. We simply don’t know which of his campaign promises will translate into policy.
“For UK business it is a particularly big threat as trade with Europe is likely to decline as a result of Brexit, so companies have to offset business losses, but the US will also be a more difficult place to trade with.
“Trump has spoken out against free trade, so expect a dramatic rise in import duty in some industries, such as steel.
“The negotiations on TTIP are likely to end. As the UK will no longer be in the EU this will not have a direct effect, but suggests that it will be difficult for the UK to negotiate a deal with the US.
“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.
“So what should UK companies do? There are two options: first, reduce US business and look for alternatives – this could mean a deliberate decision to shrink. Or set up subsidiaries in the US, so if a company operates in the US it won’t be affected by the new trade barriers.
“Another effect for UK businesses is that it could be more difficult to get work permits in the US for UK business people.”
‘Good News for US-UK Traders’
David Jinks MILT, ParcelHero’s Head of Consumer Relations, said: “There are two reasons Trump’s triumph is positive for UK-US traders. One is short term as the dollar wobbles; and the other long term as US-EU TTIP free trade negotiations collapse and post-Brexit Britain strikes an independent deal with the US.”
David Jinks says:
• Any immediate fall in the dollar means US-made products are a more attractive buy.
• Purchases made from China through Alibaba are in US dollars. Alibaba is a key source of wholesale products for many UK importers. This means the price of Chinese imports through Alibaba will fall
– just in time for the Singles Day sales (this Friday, 11/11): the biggest shopping day in the world. UK importers will be able to buy cheap and pass on savings when they re-sell on Black Friday/Cyber Monday.
• The proposed Transatlantic Trade and Investment Partnership (TTIP) between the US and EU, supported by Hilary Clinton initially, would have effectively been a Free Trade Agreement between the two blocs and abolished tariffs and delays at US Customs. Trump is clearly against any such free trade agreements. Instead he will look to strike separate deals with different trading blocs while protecting some US industries and businesses.
• Trump has gone on record in saying the UK will certainly not be ‘at the back of the queue’ when it comes to trade deals with the US. He made these comments back in May following Obama’s threat Britain would go to the back of the trade negotiation queue if we voted to leave the EU. And Trump’s trade advisor Dan DiMicco has recently stated Britain would be a higher priority for a deal than the EU. “Why shouldn’t we be working with like-minded people before we do a deal with anybody else?” he asked.
• Currently tariffs between the EU including Britain and the USA are all over the place and need sorting out. For example, we pay a 10% duty on US made cars; whereas US citizens pay 2.5% duties on EU-built cars. Imagine a situation where the UK (post Brexit) and US strike a deal that removes duties; but the US drags its heals doing the same with the EU. A US-build Jeep, for example, would be 10% cheaper here than in the EU; and a UK-built £50,000 Jaguar would be over £1000 cheaper to buy in the US than an equivalently priced EU-built Mercedes.
That will boost UK exports.