Why It Doesn’t Really Matter Who Becomes President
It doesn’t really matter who wins the US Presidential election, according to the PwC October 2024 Pulse Survey of top American executives.
US executives see economic, political and regulatory risks no matter who wins next month’s US election.
Domestic economic policy is seen as the number one risk under either President Harris or President Trump but for different reasons.
Seventy-five per cent of the 709 executives who participated agreed or strongly agreed that Donald Trump’s proposed 10% universal tax on imports would significantly hinder their growth.
At the same time, 75% of participants agreed strongly that if Kamala Harris raises the corporate tax rate to 28%, as proposed, then they would significantly reduce their domestic investments.
Regardless of who is president, 71% of executives say that trade and tax policies will hurt US competitiveness.
Nearly 80% agreed there would be more executive orders, 75% agreed there would be a more litigious business environment, and 75% agreed there would be more regulation generally.
Executives did point to relatively small differences in the policy risks presented by the two candidates.
With Harris as president, 36% cited US corporate tax policy among their top three policy risks versus 31% under Trump. Similarly, 33% placed increased regulatory oversight in the top three tax policy risks under Harris, compared with 28% if Trump is elected.
Conversely, under Trump, executives pointed to foreign relations as a key policy risk (32% versus 25% for Harris), while for trade policy risk the corresponding figures were 31% versus 27%, respectively.
More than half (55%) said their company would invest more in sustainability under Harris, compared to 46% under Trump.
Eleven per cent said their sustainability investments would decrease under Trump, compared to 4% under Harris.
Significant change
Even if they don’t really care who individually wins the US election, the fact there is a new administration will significantly change how three-quarters of these Fortune 1000 executives do business.
The presidential election is playing a key role in how executives are preparing for the future and thinking about risk and growth.
Specifically, 75% say the outcome will affect their business decisions around financial forecasts and budgets somewhat or to a great extent, while 71% say the same about acquisitions or divestitures.
‘61% of executives at top US companies believe that the American economy will go into recession within the next six months’
Gridlocked government
Similarly, 76% agree or strongly agree there will be government gridlock after the election because the result will have been so tight. This would essentially serve as a brake on legislation because neither party has full control.
However, a gridlocked government could lead to more executive orders, which 77% of executives expect regardless of who wins, as the president may use them to bypass legislative gridlock.
In particular, trade policy (setting tariffs, negotiating trade agreements and imposing trade sanctions) has largely shifted from the legislative branch to the executive over the past 60 years.
President Trump could use executive order to impose his mooted 10% tariff on all foreign imports, though he would almost certainly be challenged in court.
US executives don’t even see the presidency as the most important political office when it comes to doing business. More than half rank state governments (54%) and federal regulatory agencies (52%), local governments (44%) and Congress (43%) ahead of the presidency.
Looming recession
Ominously, 61% of executives at top US companies believe that the American economy will go into recession within the next six months.
PwC advises executives to avoid making short-term investment decisions based on a single administration.
“Identify the investments you will need to make no matter who is in the White House — particularly innovation and digitisation — and prioritise those over investments that hinge on a specific policy outcome,” says the professional services giant.
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