As President Obama famously said, ‘elections have consequences’ and as 2024 was the year for elections in the US and the UK, 2025 is when the business community will feel the impact of those elections, for better or for worse.  And it is hard not to focus on the US just a couple of weeks before the inauguration of President Trump for the second time, reflecting on the many pronouncements made by him and his team on the campaign trail and subsequently.  Anticipation of a business-friendly tax and regulatory environment, powered by low energy costs, has got a lot of people very excited about the opportunities in the US and we expect this excitement to have a material effect on investor and corporate behavior.

Less positive has been the continued talk of tariff barriers, either as a permanent feature of the US market (as they were for much of US history) or as a negotiating tactic to achieve other aims.  Traditional free traders are on fire about this but there is a group of true believers who are convinced that the US having a more open market (as measured by tariffs and non-tariff barriers) than many of its trading partners has not been in the long-term interest of the US and has led to the massive trade imbalances that the new President has in his sights.  I, for one, don’t think this is a bluff and the US, with its huge domestic economy, is better equipped to weather the downside of more friction and cost in trade, than its counter parties.  For certain, any company that sells a significant amount of product into the USA, but doesn’t manufacture there, is going to review its approach.