Business hopeful of new start
Biden will push UK to reach settlement with EU
The new president pauses for a selfie
Joe Biden’s victory in the US presidential election immediately turned UK business attention on how it would impact on the Brexit talks.
Mr Biden has made clear that he would not look favourably on a No Deal Brexit nor one that is seen to weaken the Northern Ireland peace agreement.
Mr Biden has warned publicly that a future UK-US trade deal depends on the UK not unravelling the agreement.
Christian Stadler, professor of strategic leadership at Warwick Business School, said: “The Johnson government would have been more likely to pursue a no deal Brexit following a Trump victory.
“Under Biden, the US is more likely to favour a close relationship between the UK and the EU and a fairly comprehensive deal.
“As business leaders in the UK have repeatedly raised concerns about the prospect of a no deal Brexit, they will welcome a Biden victory and the prospect of a closer relationship with the EU.”
In the US Mr Biden has put together a massive investment programme to help businesses cope with the Covid pandemic. He is likely to bring in more regulations but his plan for an increase in corporate income tax from 21% to 28% could be hindered by having no control of the Senate.
Mr Stadler also expects fewer policy flip flops under Biden than Trump and an easing of foreign tensions.
“That’s not to say there won’t be ongoing tensions with countries like China on human rights issues, but we don’t expect Biden to adopt the same harsh attitude to international trading partners that we have seen in the last few years.
“We can also expect to see a more positive attitude towards immigration under Biden, which is good news for businesses at all levels. Key players such as Microsoft, Google, and Tesla are all led by immigrants.
Investors will closely watch Mr Biden’s choice of secretary of the Treasury who will likely be involved in any fiscal coronavirus relief to be negotiated with Congress.
Markets have been expecting a stimulus package and Mr Biden has shown a greater desire to deal with the health issues. He has put together a massive investment programme to help businesses come out of the coronavirus pandemic.
Nigel Green, chief executive and founder of deVere Group believes the election of Mr Biden will deliver a boost to global stock markets and the US and world economy.
“Although a Biden win was pretty much priced-in by the markets, his victory will eliminate uncertainty – which they loathe – and they will rally further as a result.
“Even possible legal challenges from Trump will be dismissed by investors who will instead be focusing on the renewed certainty and stability that a Biden White House will bring, including in key areas such as trade tensions with China, keeping the US in the World Health Organisation, resigning the Paris climate agreement, and abiding by other international agreements and long-standing international allies.
“Biden will need to work with the Republican-led Senate to secure fiscal stimulus to bolster the economy. He might struggle to get the $3trn wanted by Democrats, but some package is likely.”
Mr Green expects sectors to benefit from the Biden administration’s agenda to include renewable energy, industrials, infrastructure, and small caps.
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