When it comes to the future of the American economy, does it really matter which candidate wins the presidential election?
Maybe we don’t want to believe the candidates and their campaigns there.
This is because U.S. trade is influenced by a number of factors, from the federal, Senate, and House of Representatives, to domestic and external crises, such as Kovid, international trade conditions, global markets, and the pipeline of innovation.
Despite this, there is no doubt that the policy priorities of White House owners are very important and, in this election cycle, more than usual.
Now that Joe Biden has been announced as the next US President, what kind of business and economic developments can we expect, and what impact will they have on the Irish economy, your business / employer and your pocket?
When it comes to taxing business, a Biden-led government is unlikely to make much of a difference from Trump, including in the area of international tax reform.
“Taxes are an area that does not shy away from multifaceted negotiations, an area in which they are sincerely involved,” said Gerard Brady, Ibeck’s chief economist.
“But we are happy to make a deal that does not affect their entire policy stance, and if it turns out to be something we do not like, US companies can avoid it.”
Brady does not see the position of leading for the first time in America change.
It is important for Ireland to keep the US in the current OECD-led international tax reform process, as it is in our best interests to succeed.
Otherwise, countries including the US will only go to taxing institutions, which will hurt us globally and freely for everyone, especially the multinational companies that operate here.
At home, Joe Biden’s tax policy includes plans to raise corporate taxes from 21 percent to 28 percent.
If it is implemented, it will affect the investment of US companies, including overseas, in places like Ireland.
But without the Democratic control of the Senate, those tax changes would be impossible but difficult to achieve.
As a result, experts here see change as unlikely.
“He has a real focus, he’s very similar to Trump, it’s a constant focus on the onshore piece,” Brady said.
“I think that’s the biggest factor to worry about from the Irish perspective.”
We often think of the US only when it comes to investing in Ireland, and the process cuts both ways.
Ireland and Irish companies are currently the ninth largest investor in the US, employing 106,000 people.
So it is in our interest that the American economy be strong.
It worked well before the Kovid-19 Pandemic, which will nurse the new president and boost recovery.
The U.S. government has already pumped $ 2 trillion into the economy.
But Biden is expected to try to come up with another financial package of similar size.
It will boost Irish companies operating across states, such as building materials company CRH, which accounts for 22% of its revenue on U.S. infrastructure spending.
If Biden, who was elected president, is unable to convince the Republican-controlled Senate to raise taxes, it is unclear how the vaccine will be given.
“I’m not sure it was spent from 1986 to 2016 to amend the tax code, and Republicans will rush to increase it to 7%,” said Firgal O’Rourke, managing partner of the PWC in Ireland.
“But he has to spend and raise money for current activities.”
If the stimulus does not come and personal taxes in the US increase, it could have a detrimental effect on Irish tourism recovery once travel restrictions are lifted.
Stimulus costs and any attempt to raise U.S. corporate taxes will have an impact on foreign direct investment here.
U.S. companies direct 70% of FDI to Ireland, so the growing post-pandemic American economy will boost their global operations.
Talking about tax increases in the US may prompt US multinationals to look elsewhere before investing.
“If they’ve talking about raising the tax rate in the U.S. from 21 percent to 28 percent, it’s not going to take companies back to the U.S.,” O’Rourke said.
However, Pandemic has brought home the extent to which the US relies on products made by US companies in other countries, such as Ireland, especially pharmaceuticals.
Like Trump, the Biden-led government may put more pressure on US companies to bring production back, especially to pharma.
“They both said they wanted to move the goods back to the US,” Mr O’Rourke said.
“But it’s one thing to say. If you suddenly increase your tax rate by 7% and include all these companies here … they’m not just going to climb the woods, they will not go back because someone asked them well.”
However, Mark Redmond, chief executive of the American Chamber of Commerce in Ireland, is more confident that US institutions here will continue for other reasons.
According to a recent survey by multinational leaders in the U.S. Chamber of Commerce, 56 percent think Ireland is a better place to invest today than in 2015, and 6% disagree.
“Over the past nine months, these pandemic corporate boardrooms in the states have seen how incredibly resistant and reliable their Irish operations in critical global distribution networks such as Medtech, Pharma, microprocessors and semiconductors are,” Redmond said.
“So we believe this extraordinary performance really puts Ireland in the best position within the boardrooms in the United States.”
Mr Redmond hopes this will be a key factor in bringing back more patriotic work in the future when pressure comes to US institutions.
The fact that Ireland is a democracy based on consensual law is widely accepted in the US boardroom.
Among other things, Trump’s presidency is characterized by trade protectionism, struggle, and hardball.
This has led to an epidemic effect, which leads to an introspective stance on many of the U.S.’s major trading partners, including the European Union and China.
It is hoped that the position will soften to some extent once Biden enters the Oval Office.
“From a European point of view, there will be better bilateral relations between the US and Europe,” Brady said.
“Trade tensions between the US and Europe in bilateral trade may be low, but I think the US and China do not see much difference in their positions.”
“I think Biden will try to bring the U.S. back to global organizations like the WTO,” Fiergal O’Rourke said.
“He’s a conservative when it comes to multinationalism.”
But experts say the change of guard will completely change the period before Trump takes office and the repeal of the US First Policy on trade.
“Are we going to see a pre – Trump perspective in favor of free trade, or are we going to see Trump’s legacy delays on trade disputes?” Asked Mr. O’Rourke.
“We’m not out of the woods yet.”
A change of government could not come at a better time for Brexit, and the talks reached a crescent.
Biden had previously made it clear that there would be no trade deal between the US and the UK if the Good Friday agreement was not protected by the Brexit process.
Now that he is ready to become president, that position is gaining more currency, narrowing the UK’s options in trade negotiations.
“They’re going to look for the U.S. first, but it’s helpful that someone told Boris and Coe that you need to adjust the border,” Mr O’Rourke said.
This may help to give some new impetus to the discussions, which have broken down in recent weeks.
“Biden is very close to it, has a better understanding of it, and it will be a stimulus for us in terms of diplomatic talks,” Brady said.
Finally, there is the potential for better economic relations with the US government.
Already, Ireland enjoys unique access to the West Wing of the White House every March, a tradition that continues under Trump.
Yet Potts’ financial ties with Ireland extended to the money generated by the golf hotel in Dunbeg.
But now a president sitting behind a resolution desk in the Oval Office is so proud of his Irish descent that access will improve.
“From an Irish perspective, we are confident that the doors to the corridors of power in the Irish United States will continue to open,” Redmond said.
Since Kovid-19 ends with a pandemic expectation, it is very useful at a time when it is likely to become a wave of spending, investment and growth.