View from America: What will Trump or Clinton mean for foreign investment?

The rhythm of the election year has been accelerated by the Democrats – already spending substantial sums to run personal attack commercials against presidential candidate Donald Trump. The commercials are broadcasted (thus far) only in those states in which they want to create or protect an early lead. 

Negative Hillary Clinton themes were emphasised at the Republican convention and may find their way onto the airwaves. The Trump campaign, though, has not been predictable, so the Republican paid-media strategy is less apparent.

The parties offer, and actually believe, conflicting narratives about the past seven years. Democrats think it started badly and would have been a lot worse but for their efforts. Republicans also concede it started badly, but it should have been a lot better had the leadership been up to the task. Their paths forward reflect these perspectives, and there are conflicting proposals to address issues that affect direct investment.

On taxation, both propose changes. The Republicans vow to simplify the tax code and reduce corporate taxes. The Democrats argue for raising taxes on the rich and corporations and reducing taxes for all others (but the rules will remain complex, so sophisticated and substantial investors will be able to find ways to minimise the effect).

As regards trade and investment, both want to change international trade arrangements. The Democrats will seek to maintain globalism frameworks; for example, an improved Trans Pacific Partnership, fine-tuning it enough at the margin to claim that it now protects (union) workers and environmental goals. The Republicans point to the bailing out of encumbering, multilateral agreements and replacing them with country-by-country agreements. High-powered country trade teams could be chartered to do this quickly, beginning with major trading partners. Contrary to a pre-Brexit warning, the UK, among others, might move toward the head of the line.

Daniel Malachuk works with business and government leaders on global direct investment strategies. He has advised many of the world’s leading companies and served in the public sector as director of White House operations. Email: daniel.malachuk@gmail.com