US Presidential election – either way, it’s America first 

The US Presidential and Congressional elections will take place on 5th November. The result will have far-reaching consequences globally and could have a significant impact on businesses operating in the US. 

Electoral dynamics 

The Presidential election on 5 November is highly likely to be fought between Trump and Biden. The last Republican challenger Nikki Haley is expected to drop out by late March. But both men are vulnerable: Trump to criminal trial and Biden to the perceived depredations of age. If either dropped out, both parties would struggle to agree on a credible alternative candidate.  

Biden has perhaps surprisingly low approval ratings on the economy. On social issues, he is criticised for pandering to the left of his party. Although his foreign policy record is strong, his posture on Israel-Hamas has eroded support among younger liberal and Arab-American voters.  

His core messages will echo his 2020 campaign – democratic values, the objectively strong performance of the US economy, landmark legislation to support US jobs, and America’s international responsibilities.   

Trump will promise to restore the economy, US heft in the world, and an anti-woke return to traditional values. He will major on immigration, Biden’s age (and a possible Harris succession), wedge issues and identity politics. He will court the business community.  

The election is won or lost in a few key states, and in these Trump is currently ahead. But he remains divisive and will struggle to broaden his appeal among independents and undecided voters. A criminal conviction could sway a meaningful number against him, and he will spend parts of the campaign in court. 

Congressional elections, also on 5 November, will involve all 435 seats in the House of Representatives and 34 of 100 seats in the Senate. The results will determine the President’s ability to pass legislation. Republicans seem to have a good chance of maintaining slim control of the House. In the Senate, the more likely outcome is that the Republicans win control: the Democrats will need to win all three highly competitive races in Ohio, Montana, and Arizona to maintain their majority.  

Domestic policy impact 

If re-elected, Biden would focus on priorities that have stalled during the divided legislature. This includes federal support for childcare, protecting civil rights, a ban on assault rifles, and restoring nationwide abortion rights. There would be a strong focus on industrial policy, supporting US production but also addressing the dominance of large corporations and big tech. He would look to consolidate gains from the IRA and further increase capacity in green sectors. He has proposed a “billionaire minimum income tax” – a 20% tax on households with net worth over US$100m, and returning the top tax rate to 39.6%, the corporate tax rate to 28% and the stock buyback excise tax to 4%. He may struggle on all of these if Congress is Republican-controlled.   

A second Trump administration would be better prepared than the first, but probably no less chaotic. Trump believes many of his priorities were stymied by disloyal politicians and bureaucrats of the “deep state”. While he has made no public announcements on key positions, including Vice President, he will choose Trump loyalists over establishment party candidates.  

As in his first term, Trump would rely heavily on executive orders, which don’t require legislative approval. He would revoke Biden-era executive orders that he views as placing undue regulation on business. He would tie deregulation and less bureaucracy to support for US industry and jobs. He has promised to extend his 2017 tax cuts beyond their 2025 expiry and revisit a cut in the corporate tax rate. His conservative social agenda would focus on restricting legal immigration and combatting illegal immigration, and he is promising mass deportations.  

On the environment, a Trump administration would delay decarbonisation and promote fossil fuels. Despite his criticism of the IRA, he is unlikely to revoke it completely as the investment benefits some Republican states and Congressional approvals would be needed for major change. He is more likely to reverse selected measures such as tax credits on electric vehicles or green subsidies.  

International impact 

There is a clear difference in international policy. Trump has a unilateralist and transactional approach. Biden believes in working with partners and upholding an international system. Trump would limit US foreign involvement unless he saw a direct benefit to the US. He dislikes the EU and in NATO believes (with some justification) that European allies have not been paying their way. He would push for greater burden sharing, decrease US sustainment capabilities to the alliance, and threaten withdrawal. Trump would favour significant reduction of military support for Ukraine and an early settlement with Putin. All of this would set him at odds with the US military and diplomatic establishment, fray the transatlantic relationship and reinvigorate the EU’s strategic autonomy agenda.  

In the Middle East, Trump would continue US strong support to Israel and is unlikely to bring pressure on Netanyahu or future Israeli governments in how it conducts its security operations in Gaza and in its ongoing periodic engagements with Iranian proxies in Lebanon and Syria.  A second Trump administration would continue to pursue over the long-term the normalisation of Israeli relations with Arab countries, especially Saudi Arabia. He would take a hawkish approach to Iran, as before, but now in the context of a more advanced Iranian nuclear programme. 

Whoever wins, the US will continue to treat China as a strategic adversary and seek to reduce US business exposure in key sectors of security or strategic competitive concern. Biden has maintained many of Trump’s China policies – and gone further on export controls, outbound investment screening and Chinese-made cranes in US ports. A second Biden term could see increased pressure on European allies to toughen their stance. Trump could ratchet this further – he has floated a 60% tariff on all Chinese goods and pledged to revoke China’s most favoured nation trading status.  

Biden and Trump are both willing to prioritise US manufacturing through “made in America” requirements and trade policies that limit market access. They are open to using tariffs to protect strategic sectors like steel and to intervening in support of supply chain diversification. Trump has raised the possibility of a 10% tariff on all US imports and made reciprocal tariffs a re-election pledge. 

A victory for Trump would have more dramatic and far-reaching international political consequences, including strategic realignment and potential shocks affecting businesses. But if Biden promises a more stable political context, his industrial and trade policies will be no less single-mindedly pro-American.  

Flint supports clients in understanding what political change means for them. Our team includes experts in US domestic politics, US foreign policy, trade and geopolitics, as well as policy and regulation specialists in sectors such as energy, digital, manufacturing, advanced technology, and life sciences.  

This blog was written by Simon Fraser, Matthew Lehrfeld and Will Haworth. Simon is a Managing Partner at Flint and former Permanent Secretary of the UK Foreign Office and member of the National Security Council. Matthew is a senior adviser and former US diplomat who held postings in the Middle East and Europe. Will is a consultant and former UK foreign and trade official who worked on the UK’s trade policy strategy with the US.  

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