How the 2024 US Election Outcome Will Impact Australia's Business Landscape

Democracy is an institution for many nations. In places like Australia and the United States, it helps ordinary citizens like you and me contribute to their community by voting on the people they would like to lead the nation. It’s a freedom that many countries are not afforded.

Fundamentally, people vote for different reasons. Perhaps we identify with a particular leader’s values and views or simply like the policy ideas. The politicians we vote for and the people we elect substantially impact how our countries are presented to a global audience through trade, business, and international relations policies.

Paying attention to politicians' values and policy proposals can give insights into what changes may impact the business world when a new leader is elected. Students undertaking an online Graduate Certificate Business are uniquely qualified to identify how these changes may affect the global economy, from policy announcements to attitudes and sentiments about issues such as tariffs, taxes, and charges.

Let’s explore the policy proposals of the 2024 US Election campaign. With Donald Trump set to be sworn in as the 47th President of the United States in 2025, what do his policy statements say about what’s to come for the business world?

Politics and Business: Cause and Effect

While politics often involves creating legislation and governing a nation, the rules and regulations passed can often have an effect that goes far beyond a nation’s borders. Take, for example, a country that is trying to protect against anti-competitive business behaviours, such as predatory dumping - where a company may be exporting a product internationally at a lower price than what it is sold for in its home country.

While it’s not explicitly illegal, many consider activities such as predatory dumping anti-competitive. As a result, politicians may respond to these activities by introducing laws that explicitly address this behaviour in an attempt to support domestic businesses and curtail foreign influence.

Politics, by design, is a part of democracy that can have lasting effects on a nation’s economy and balance sheets. What is done, whether through the signing of free trade agreements, the introduction of tariffs, or other changes to legislation, can ultimately have a lasting impact on the way that citizens conduct their business.

Could The Past Provide A Guide?

Donald Trump is not an unfamiliar face in global politics. He served his first term as U.S. President from 2017 - 2021. While he has been vocal about the policies and ideas he would like to implement upon his re-election, it’s beneficial to look at the past, particularly to understand how his first term impacted businesses globally.

One of the lasting legacies of Trump’s first term was the Tax Cuts and Jobs Act, signed into law in 2018. The legislation represented a substantive overhaul of taxes, reducing the corporate tax rate and making changes to deductions, depreciation, and expensing.

Other changes made during Trump’s first term included the introduction of tariffs on the imports of many goods manufactured internationally - with a particular focus on China. These tariffs were designed to protect American interests from foreign competition - incentivising American businesses to produce goods that may have previously been more affordable from international suppliers.

The Role of Politics in Business

As we approach the beginning of a new presidential term, the actions taken by the new Trump Administration could have a lasting impact on the global economy. Politics has a role to play in creating and implementing laws and regulations intended to benefit the people it serves.

For example, countries with strong trade relationships may collaborate to introduce agreements supporting the flow of goods and services between nations. Free trade agreements have been common in international agreements for decades and continue to evolve as nations become increasingly interconnected. For those who have completed a business qualification, understanding the challenges of trade and conflict can paint a picture of the challenges facing the United States and its allies in the years ahead.

Australia has a strong trading relationship with the United States, having entered a free trade agreement just over two decades ago. The two nations also hold strong diplomatic, intelligence, and military ties. The introduction of new tariffs or further regulation in the U.S. could impact their economy and have widespread ramifications throughout Australia and the world.

A Challenging Global Landscape

The global landscape is constantly changing for business. Take, for example, a highly contested area such as taxation. While many companies would like to minimise their tax, only some can take advantage of tax breaks that occur over international borders. As a result, there is often a race to the bottom - for nations to change legislation and regulation to reduce the tax corporations pay to become prime targets for investment.

Trade is similar. Countries will tinker with regulations to improve trading relations or introduce policies to protect domestic manufacturing. With Australia exporting billions of dollars worth of stock to global markets each year, the impact of political maneuvering from the U.S. could have dramatic consequences on businesses and industries that rely on the export economy.

While Australia has strong ties with the United States, it also has significant ties with China, particularly in trade. It seems clear that there will be challenges for Australia’s ability to maintain a strong trading relationship with China while also trying to maintain a positive working relationship with the United States - where Trump has repeatedly inferred that he will increase trade tariffs on products produced in China.

It’s naturally challenging to manage trade with large international partners - particularly as nations attempt to manage their interests while also dealing with the decisions that allies and enemies make. Get the policy framework wrong, and all of a sudden, you have politics causing an international trade incident - or worse, a trade war. These are the risks that diplomats will have to manage in the years ahead.

As U.S. policy continues to shape itself in the face of electoral change, Australia finds itself at an inflection point. How will tomorrow's diplomats resolve the challenges they will face - with billions of dollars of trading opportunities at stake? Only time will tell.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.