Experts Comment: How Are Businesses in the UK Preparing for the US Election Results?

The 2024 United States presidential election certainly isn’t the first that has been greatly anticipated, nor will it be the last, but there’s no doubt about the fact that this year, tensions are high and there’s a lot at stake.

From economic considerations to serious social issues, there’s a lot of discussion about what the country will look like under each administration. Of course, if the Republicans were to win, Trump would see his second term as US president, while in the case of a Democratic victory, Harris would start her term as the country’s first-ever female president.

Undoubtedly, these scenarios will play out very differently, and Americans haven’t been quiet about their feelings regarding the possible results.

But, what about everybody else? Of course, Americans and people living and working within the United States are particularly vulnerable to whatever the outcome of the election may be, regardless of which side of the fence they sit.

However, the ramifications of the 2024 vote will be felt absolutely everywhere, whether it’s in terms of how the results affect markets and oil prices, for instance, or what incoming policies mean in terms of social changes in one of the most powerful countries in the world.

In the UK, business owners are bracing themselves for what may come, because although their companies may be based outside of the United States, changing policies will, undoubtedly, have an effect on British enterprise.

And, although it’s possible to speculate and make educated guesses, there’s no real telling what exactly what will happen until results are finalised and either Harris or Trump have been sworn in. So, how can business owners possibly prepare for the unpredictable?

Well, they can’t – not completely. But the first thing they can (and should) do is make sure they have a proper understanding of exactly how they’re likely to be affected.

How Does US Politics Influence Businesses In the UK?

 

There are plenty of ways in which US politics and the 2024 election results in particular can and will influence business in the UK, but some of the main issues include trade, market stability and economic policies.

 

• Currency Exchange Rates: The value of the US dollar relative to the British pound is, invariably, affected by political stability, economic policies and most importantly, confidence in US leadership. Thus, elections tend to bring uncertainty along with economic policy shifts that often result in fluctuations in the dollar that impact UK businesses that trade internationally. Indeed, if the dollar gets strong, it’s possible that UK exports may become more competitive in the US market, but if the dollar gets weaker, UK businesses may see reduced profitability with regard to importing American goods and services.

 

• Tariffs and Trade Policies: US elections are notorious for having a significant impact on trade policies which, in turn, influence UK exports and imports. This may be in terms of supporting free trade and international trade, on the one hand, or increased protection resulting in higher tariffs on UK goods. The former will probably result in fewer trade barriers while the latter is most likely to make it tough for UK businesses to compete in US markets.

 

• Compliance and Regulation: Regulations in finance, tech and pharmaceuticals especially tend to be pretty seriously influenced by US elections. Stricter regulations, regardless of the industry, will force UK-based businesses to comply, increasing operating costs. Conversely, the loosening of regulations may create opportunities for growth in certain sectors.

 

• Investment and Finacial Markets: US election results historically influence global financial markets which, in turn, affects the stock market and investment flows. Things like interest rates, tax policies and regulations on business create ripples in the US financial markets which immediately affect UK investors and companies listed on the London Stock Exchange with a lot of US exposure.

 

• Environmental Issues and Policies: Climate policy is something that has become increasingly important over the last few election cycles, and it has the potential to seriously influence UK companies – especially those in manufacturing, energy and automotive industries. For instance, a US administration that prioritises clean energy would create an increased demand for eco-friendly products, giving the industry a boost, along with any UK companies specialising in things like electric vehicles, renewable energy and other types of sustainable tech.

 

And, this is just the tip of the iceberg. There are countless ways in which US politics can and will affect UK businesses, depending on the businesses and industries in question as well as, of course, the results of the election.

 

Preparing for the Unexpected 

 

There’s not much everybody agrees on when it comes to US politics, but the one thing that isn’t contested is the fact that the outcome of this election is still very much in the air. With such close margins, it’s incredibly difficult to predict what will happen, and in the case of a race that’s tough to predict, it’s even more difficult to be prepared.

So, the question is, how do you prepare for the unexpected?

Most of the significant ramifications that the election results will have on UK businesses are things that simply can’t be completely prepared for. If trade agreements are influenced, businesses’ ability to import and export goods will be affected, just like if the US market becomes unstable (which is incredibly likely either way), there’s not much that can be done to mitigate that beforehand.

However, being aware of possible ramifications is a good place to start, and if there are ways to mitigate the effects that the results will have on your business, it would probably be a good idea to opt for those – that is, removing as much risk as possible.

For instance, using a lock-in exchange rate. While this may not necessarily end up working out in your favour overall, you’ll still be better off in the long run if something drastic were to happen (much like what happened in the wake of Brexit).

Either way, it’s a risk, but preparing for the results of the US election is going to need to involve either taking a few risks to maintain stability or sitting tight and waiting to see what happens in the next few days.

 

What Are Experts Saying?

 

Naturally, opinions are divided on what the US election results will bring – with such a close race, there’s really no telling who will win, never mind what the ramifications will be either way.

However, the influence that the US election results will have on the rest of the world, especially businesses based in the UK and other major countries, is major, and that’s why businesses and business owners have started to prepare for the different potential outcomes.

From questions about investment and international policy to trade and exchange rates, there are plenty of factors that need to be considered in the run-up to the announcement of the election results.

 

 

Our Experts

 

• Eric Huttman: CEO of MillTechFx
• Luke Jonas: Chief Growth Officer and Co-Founder at Nest Commerce
• Scott Dawson: CEO at DECTA
• Aquayemi Akinsanya: CEO and Founder at Garnetts Clothing Brand & Range
• Nevsah Karamehmet: Serial Entrepreneur, Human Behaviour Expert & Investor
• Scott Sherwood: Founder of TestLodge

 

Eric Huttman, CEO of MillTechFX

 

 

“The upcoming U.S. presidential election adds another layer of complexity to FX risk management. Potential shifts in policy, changes in economic direction, and new geopolitical strategies could all influence the US dollar’s value significantly. For instance, speculation about a potential Trump-Vance administration suggests a possible push to weaken the U.S. dollar, given their stance on making U.S. exports more competitive.

Finance leaders are caught in a delicate balance, weighing the costs of hedging and how much to hedge against the potentially limitless expenses of not doing so. This current landscape resembles a treacherous, icy road where the path ahead is uncertain. A well-crafted FX hedging strategy acts like traction control, providing stability and guidance as market conditions fluctuate. Without it, companies face the risk of losing control when volatility strikes.”

Luke Jonas, Chief Growth Officer and Co-Founder at Nest Commerce

 

 

“With a massive, English-speaking market of 340 million and a stronger economic outlook than the UK, the US offers immense potential for challenger brands. As such, many are eyeing the American market to accelerate growth plans. DTC brands like ASOS, Nadine Merabi, and ME+EM have swiftly built significant audiences and sales in the US with smart digital strategies.

Yet, the US election has led many to proceed with caution, with intensive spending on election ads in swing states in particular pushing up costs for online advertising.

Now we are faced with an election result on a knife edge, that looks too hard to call either way. Whichever way the election goes the certainty of a conclusive result will be key to businesses looking to invest and adapt to any new regulatory regime. However, a Democratic win will likely favour UK brands looking to enter the US market, as it lowers the chance of tariffs being applied.

It is a pivotal time for those businesses scaling in the US to strategise around potential shifts, ensuring they’re well-positioned for continued growth in the world’s biggest economy.”

 

Scott Dawson, CEO at DECTA

 

 

“The US election is mere days away, and there are some major differences between the candidates that will affect every bank, FinTech and financial services
provider, with global ramifications.

While a Harris presidency might seem to mean business as usual since she’s already Vice President, it could mean significant changes. The Durbin Amendment, for instance, would cap interchange fees – good for customers, but the companies who charge interchange fees will have to make up the profits elsewhere.

A second Trump term would likely mean a change of leadership at major regulation and enforcement bodies like the Federal Trade Commission (FTC), with an emphasis on getting rid of regulations. We could also see the granting of new banking charters, and with a general lack of effective regulation it’s a certainty that low-quality players are going to enter the market. This could mean increased competition, or it could mean a race to the bottom.”

Though both outcomes are very different, the way to navigate through these changes is the same. Companies need to assert control over their payment systems by working with resilient providers than can adjust to changing fees, regulations and technologies.

These changes that will be brought about due to the election aren’t going to be restricted to the US either – other countries will either follow suit or be indirectly affected by changing US regulations. Companies in Europe should keep up with what is happening across the Atlantic, because the US market is so huge it will have reverberations around the world.”

Aquayemi Akinsanya, CEO and Founder at Garnetts Clothing Brand & Range

 

 

 

 

“Entrepreneurs are usually ready for the best scenario so I have been telling the founders in our accelerator program to get ready for the worst. I think a very new, different, unpredictable economy is ahead of us. 

If wins, which I think is more likely, that would likely bring rapid change – on climate change, on international trade (whacking up import taxes, tariffs) and on Ukraine. Unlike a Harris administration, they would likely offer the UK a free trade deal, but it seems unlikely the terms of it would tempt London to sign up.

We all need to get ready for this, and the exact opposite. How? What I have been telling our founders to do:

1. Cash is king. Make sure you have at least 6 months of cash in the bank.

2. ⁠Stay alive. Make sure you stay alive and ride the wave, no matter what happens. For the next 6 months, you mail focus should be “staying alive”. I even tell them to listen to the song by Beeges every morning before they go to work.

3. ⁠Slow down your growth. Growing to much too fast is one of the worst things you can do in a situation like this. Let the fluctuation wave end, before you focus on growth.

4. ⁠Hold on to your core team members. Support them, their families and their mental health. This is a time when you will need to support your core team members because they might feel stuck, depressed, or even angry. Organise mental health workshops, use breathwork, and meditation as ways to support them.

5. ⁠Have a mentor who is older and more experienced than you. People who are older and more experienced usually have seen and been in many fluctuations and unpredictable situations like this. They can help us see beyond the wave and decide wisely.

6. ⁠Make sure you have a very very stable life. In unpredictable economies, the only founders who succeed are the ones who are more stable, grounded, and strong than others. Spend time with your family, indoors, try moving less, think more, build focus through meditation, get support from your loved ones so you can manage the stress and tears ahead of you.”

Scott Sherwood, Founder of TestLodge 

 

 

“Like many UK SMEs that operate internationally, we primarily do our business in US dollars, meaning we are often affected by fluctuations in the exchange rate between it and the pound sterling. Depending on which way this goes, it can have a positive effect if a stronger dollar gives us more value. 

Naturally, if anything is going to move the needle in the States it’s going to be a potential change in government – but this election is perhaps the most unpredictable – for obvious reasons. 

One thing businesses can do is use a lock-in exchange rate to try and protect against any volatility. You will usually incur a small fee (usually in the region of 0.8%), but the protection this gives you can be worth the cost. You only have to look at the seismic shifts to rates that occurred post-Brexit and post-Trump election 2016, which saw both exchange rates tumble greatly to know the value of stability.”