Key issues for businesses in potential Trump-Biden rematch

Key issues for businesses in potential Trump-Biden rematch

Donald Trump after defeating Nikki Haley in New Hampshire on Tuesday Confirmed his position as the leading candidate to win the Republican nomination. That leaves business leaders facing the prospect of another Trump presidency, and their investors trying to figure out what that might mean for their profits.

It is not surprising that questions are coming from every corner of the economy.

During Blackstone’s quarterly earnings call on Thursday, an analyst wanted to know if deal flow could stall due to uncertainty over who would win in a potential Biden-Trump matchup. (“I would say the transaction activity will be more tied to the Fed’s activities,” said Jonathan Gray, the company’s president and chief operating officer.)

Elsewhere, on a call with financial services company Bread, an analyst wondered aloud whether a second Trump administration might overturn a proposed rule on credit card late fees. (“Expectation is not a strategy,” replied Ralph Andretta, the company’s CEO.) And Jeff Arnold, chief executive of digital health company ShareCare, responded to a question at a conference about whether the election could threaten the Affordable Care Act. . (“At the end of the day, do you think he’ll be more interested in attacking the ACA or something else?” he said of a potential Trump presidency. “I think it’s probably going to be something else. “)

The November election is still several months away, and officials certainly aren’t eager to talk about it. “Most business leaders, especially in this presidential election year, are trying to stay away from politics as much as possible,” said Lori Esposito Murray, chair of the economic development committee at the conference board.

But here are some key issues that are top of their minds.

On some topics, neither Trump nor President Biden has the answers businesses want. In a survey of nearly 1,200 C-suite executives by the Conference Board, executives said their biggest risk is the rising national debt. While Haley has cut government spending part of his campaignNeither Trump nor Biden has made it a priority, “I don’t think there’s any candidate who is particularly encouraging on this issue,” Murray said.

On corporate taxes, the second Trump administration is likely to have less impact than the first, said Andy Laperriere, head of US policy at Piper Sandler, which has signed legislation to cut the corporate tax rate from 35 percent to 21 percent. . “I think it will be a big challenge to extend today’s individual tax cuts that expire at the end of 2025,” he said.

Trump vows to shake up trade – but how? Biden has kept many of the Trump administration’s tariffs in place. He has restricted the sale of some technology to China, and he is considering new protectionist measures to help American companies compete with Beijing. Trump has proposed more sweeping trade policies such as imposing a 10 percent tariff on all imports.

“There will be a lot of uncertainty about how this will work,” Laperriere said. “Do we get this 10 percent tariff across the board? Does he really have the authority to do this? Does he try to do so? is that bus Withdraw from WTO, He added, “I think investors should bet on the fact that Trump is serious about all this. ,

Climate incentives could be in jeopardy. It would take congressional action to make wholesale changes to Biden’s inflationary reduction act, which has set aside $370 billion in spending and tax credits for renewable energy investments. Jeff Navin, who was deputy chief of staff at the Department of Energy during the Obama administration and co-founder of the government affairs firm Boundary Stone Partners, said that a Republican administration (even one that had previously had rolled back over 100 climate regulations in the U.S.) were unlikely to expend the political capital necessary to do so. “I don’t see people campaigning on this,” he said.

Another factor that could make voiding an IRA a lower priority: Most of it is a renewable energy investment. flowing in red state,

Nevertheless, federal agencies, directed by the White House, may interfere with implementation of the law, for example by withholding loans or changing eligibility requirements for grants. “They’ll go provision by provision and attack things,” Navin said of a potential Republican administration. Some companies that benefit from IRAs face more risk than others. “The politics around clean energy power generation deployment are very different from the politics around solar manufacturing, which is very different from the politics around electric vehicles,” Naveen said.

There is uncertainty on the ballot. In the Conference Board survey, geopolitical conflict ranked high on the list of U.S. executives’ top risks. The war in the Middle East came in third place, the war in Ukraine turning into a wider NATO conflict came in fifth place, and the takeover of Taiwan by mainland China came in sixth place. “Both Biden and Trump pose a lot of risks to the markets that historically we have never seen,” Laperriere said. “I think the risks are higher in terms of trade and geopolitical instability with Trump,” he said.

Closer to home, Trump faces multiple lawsuits and 91 felony charges. He continues to make baseless claims that the elections were rigged, which creates another type of risk for businesses. “Democracy is very important to a free-market economy,” Murray said. “They’re really interconnected.” -Sarah Kessler

Jack Ma is buying shares in Alibaba. The co-founder of the Chinese e-commerce giant is buying stock in the company, whose share price has fallen since its 2020 peak. Ma has largely disappeared from public view after criticizing Chinese authorities for a regulatory crackdown on his empire and broader tech sectors.

FTC goes after Big Tech’s AI start-up deals. The regulator announced it would investigate the billion-dollar investments made by Microsoft, Amazon and Google in OpenAI and Anthropic. FTC Chairwoman Lina Khan said close relationships can hinder innovation and harm consumers, even if they are investments and not acquisitions.

Netflix and WWE have signed a streaming deal worth $5 billion. The entertainment company agreed to a $5 billion deal to air WWE’s daily live show “Raw.” Netflix co-CEO, Ted Sarandos, said the agreement does not mean the company will emphasize live sports broadcasting, as other tech companies have done. Separately, Vince McMahon resigned as executive chairman of WWE Parent Group after a former employee accused him of sexual harassment and sex trafficking.

A frenzy of dealmaking by the oil giants has thrust tiny Guyana into the spotlight this autumn, writes Vivienne Walt for DealBook. The South American nation is home to vast oil reserves Exxon Mobil and Chevron, which both report fourth-quarter earnings next week, are betting it will transform Big Oil’s economy.

But suddenly, those bets start looking riskier. Last month, Venezuelan President Nicolas Maduro ordered the deployment of about 6,000 troops to the border with Guyana, vowing to seize two-thirds of the country, including its oil fields. “We are warriors,” he declared.

Fearing conflict could erupt, Britain moved a warship close to Exxon’s drilling site, and marine insurer Lloyd’s added offshore oil installations in Guyana’s exclusive economic zone to its list of highest-risk shipping areas. Maduro, who faces re-election this year, said oil and gas exploration should begin “immediately.”

A military clash in Guyana would have global consequences. Tapping the country’s vast oil reserves 10 years ago was “the most important discovery of the modern era,” said Schreiner Parker, managing partner for Latin America at Rystad Energy, a consulting firm. He said that with existing discoveries alone, Guyana could produce more than 1.8 million barrels per day by 2033. That would make it the world’s 11th-largest oil producer and effectively eliminate some efforts by OPEC giants like Saudi Arabia to limit supply. Prices high.

An additional factor: Guyanese oil will be cheaper to produce than Russian crude or American shale. And the fuel is less carbon intensive to extract, making it especially valuable as governments and businesses step up their net zero efforts.

Exxon has been burned by geopolitics in the region before. In 2007, Venezuelan President Hugo Chávez seized most of the country’s reserves, starting a dispute that swirled in international courts for years.

The company is confident about Guyana. “We’re not going anywhere,” company spokeswoman Michelle Gray told DealBook in an email. Some experts say Maduro’s threats are probably just election year bullying. “Any move to go after Guyana’s assets will ensure a very strong response from the United States,” said Helima Croft, head of global commodity strategy at RBC Capital Markets and a former CIA analyst. “Venezuela will also face significant economic consequences.”

But the President of Guyana is worried. “We are not taking this lightly at all,” President Irfan Ali told DealBook from the capital, Georgetown. “We are deeply concerned by war rhetoric that could destabilize our region,” he said.

Negotiations are underway on more than a dozen exploration blocks in the country. Suggest that companies Ali said, we are refusing war. But, he added, “threats of war have already affected the cost of insurance or shipping for us in Guyana.” He met Maduro last month to try to ease tensions.

Guyana is taking a tough stance in negotiations with oil giants, Removing the 10 percent royalty (as opposed to the 2 percent royalty in its existing deal with Exxon) and adding a new 10 percent corporate tax. And Ali is busy setting expectations back home, where the citizens are dreaming of getting rich overnight. Billions of dollars are needed for schools, clinics, roads and agriculture, and climate-resilient coastal communities, he said. The challenge is to convince people that the country is now prosperous, but fiscal discipline is necessary.

“We have to think long-term,” Ali said.

Richard Bove has been a banking analyst for 54 years, presenting his point of view in clear terms that may not have pleased some of his targets. Now, at 83, Bowe is retiring, lamenting the American economy and his teammates, writes Rob Copeland of The Times.

“The dollar is finished as the world’s reserve currency,” Bowe said. He further said, China will overtake the US to become the world’s largest economy and no other analyst will accept this because they are dependent on the existing financial system. They are, he said, “monks praying for money”, unwilling to criticize the system that has made them rich.

Wall Street leaders were divided on their views regarding his announcements. JPMorgan Chase boss Jamie Dimon found Bove’s work “insightful”. Bank of America’s Brian Moynihan refused to speak to Bove for a decade after he criticized his move into investment banking.

“I like having a backache sometimes,” he said. “A lot of the time.”

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