many others. Nearly half the benefits from Trump’s proposed tax cuts would flow to the top 1%, according to the Tax Policy Center. They’d receive an average tax cut of $215,000, liſting their aſter-tax income by 13.5%. The top 0.1% would get a tax cut exceeding $1 million.
TRADE Trump argues that Mexico, China and Japan operate by rules that have hurt the United States. He says agreements to open markets, like the North American Free Trade Agreement, led firms to ship factory jobs abroad – a trend he would stop by renegotiating these deals and penalising US companies that move manufacturing operations offshore. If he carries out what he said during his campaign, then trade – especially for the emerging markets – would be hit but his words since his election have hinted at a more collaborative approach.
FINANCIAL REFORM The fate of a key piece of legislation passed aſter the financial crisis – the Dodd-Frank regulatory reform law – is now in question.
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House Republicans want to repeal all or parts of Dodd-Frank. The twist is that Wall Street, generally, has little interest in repealing Dodd-Frank. Banks have spent billions restructuring themselves and generally believe the banking system is stronger with the law.
ENERGY The president-elect is sure to be friendly to the oil and coal industries and sceptical of the renewable- energy sector. He pledged to make the US a dominant player in energy, independent of OPEC oil. Trump wants to unlock untapped U.S. reserves of fossil fuels. He’s supported what he calls ‘safe’ hydraulic fracturing, which has helped US oil and gas production boom. Trump’s victory means the end for Obama’s Clean Power Plan, which would have forced states to limit carbon emissions and likely hastened the decline of U.S. coal production.
STOCKS A big stock rally the day aſter his election in certain sectors suggested that investors think companies involved
in repairing roads and bridges or in expanding transit systems could enjoy a boost under Trump’s plan to increase infrastructure spending. Stocks of gun makers plunged, though – people tend to buy up guns in anticipation of rules expanding gun checks and curbing certain kinds of sales, but that’s not a Trump policy. Equities would benefit from Trump’s inflationary approach, bad news for bonds.
UK ECONOMY As far as the UK economy is concerned, Trump’s election can go either way. If his determination to return jobs to America and turn his back on global trade wins the day, the UK could find itself struggling to find export markets. On the other hand, Britain is more likely to get a better Brexit deal from Europe if Europe itself fears missing out on the US market.
THE EYES HAVE IT Overleaf: Kate Andrews and Stephen Gibbs examine what might happen next in the world’s biggest economy R
DIRECTOR OF FINANCE 5
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