How the US Election Could Affect Businesses in the UK

As the US prepares to head to the polls on 5th November, you might wonder what impact this presidential election could have on your business here in the UK. While it may seem far removed, the reality is that changes in Washington, DC often ripple across the Atlantic, particularly for SMEs tied to global markets.

The candidates - Kamala Harris and former president Donald Trump - offer starkly different visions for America’s future. The election's outcome could significantly affect the UK in terms of trade, market stability, and economic policies. All of which are crucial for British businesses. Here’s what to keep in mind as the race for the White House unfolds.

Trade Deals

For small businesses, particularly those that trade internationally, one of the biggest considerations is how this election might affect UK-US trade relations. Post-Brexit, the US is Britain’s largest trading partner, and securing a free trade agreement (FTA) with the Americans has been the Government's goal for years now. However, the prospects of such a deal depend on who sits in the Oval Office in 2025.

If the American electorate chooses Donald Trump, he may be more open to a trade deal due to his pro-Brexit stance, favouring bilateral agreements over multilateral ones. However, his “America First” policy leans towards protectionism and self-reliance, which could make negotiations difficult.

Businesses on this side of the Atlantic might face higher tariffs or pressure to accept US food standards, which could create complications for sectors like agriculture or food manufacturing. For small UK firms, this could mean more bureaucracy and higher costs when exporting to the US.

On the other hand, if Kamala Harris is victorious, the likelihood of a quick trade deal remains slim. While serving as Vice President under President Joe Biden’s administration, she has shown little interest in pursuing FTAs, instead focusing on domestic policies like the Inflation Reduction Act. This reluctance could mean UK companies looking to expand into the US market may find fewer growth opportunities.

In either case, the announcement of a trade agreement seems unlikely in the near future, meaning UK businesses should focus on alternative markets.

Economic Instability

The US presidential election is always a significant event for global financial markets, and the 2024 election will be no exception. Given the close ties between the UK and US economies, any shifts in market confidence or economic policies could directly impact small businesses in Britain.

Historically, US elections create market uncertainty, and this volatility could extend to the UK’s stock market. SME owners may see fluctuations in currency exchange rates or disruptions in the cost of foreign goods. Given his unpredictable approach to international relations, a Trump win could lead to more market instability. Harris’s election might offer a steadier hand, but ongoing global challenges - from inflation to geopolitical tensions - mean companies should still brace for disruptions.

As a small business owner, keeping a close eye on these trends and maintaining flexibility in your financial planning could help mitigate risks.

The Future of Green Energy and AI

The US election could open new doors for UK businesses in green technology and artificial intelligence (AI). Both sectors have seen increased global focus, and the commander-in-chief’s stance on these industries could shape international cooperation.

Under Biden, the US Government has embraced green investment, following the UK’s lead in offering subsidies and grants for clean energy projects. A continuation of this approach under his fellow Democrat, Kamala Harris, could provide indirect benefits to UK businesses operating in these sectors as demand for green tech grows.

In contrast, a Trump presidency would likely halt this momentum, reducing opportunities for UK-based green businesses to sell to American customers.

In the world of AI, the UK has positioned itself as a leader in regulation, having hosted a high-profile summit on the topic. A Harris win could lead to continued cooperation between the UK and the US on AI standards, offering opportunities for innovative tech firms. Trump, however, is less likely to prioritise AI regulation, which may create a more uncertain environment.

Concerns Over Food and Medicine

Two key sectors where UK businesses could feel the effects of a presidential change are food and pharmaceuticals. If Trump returns to the Oval Office, his insistence on reducing trade barriers for US agricultural products could force the UK to ease its own food standards as part of a trade deal. This change would affect British farmers and food producers, particularly those bound by the EU’s stringent regulations.

Similarly, the pharmaceutical industry may face challenges if the US pushes for higher drug prices in trade negotiations. This hike could increase expenses for UK businesses in the medical supply chain or those reliant on American products.

Preparing for Uncertainty

While it’s impossible to predict the exact outcome of the 2024 US presidential election, it’s clear that small businesses in the UK need to stay informed. Whether managing market volatility, understanding international trade complexities, or seizing opportunities, the aftermath will shape the global business environment.

For British business owners, the best strategy is to strengthen your operations and keep your options open. Diversifying markets and ensuring financial stability will help your business thrive, no matter who occupies the White House.

If you want to future-proof your business, now could be the perfect time to explore strategies like securing funding or streamlining operations. We’re here to help you find the best options for your small business.

Let Us Help Your Business

BusinessComparison can help you compare vital business products and services, securing the best deals and saving precious time. Compare with us today to save time and money.