With one week to go, the election remains too close to call. With that, on November 5, the USA will vote and if Trump wins, there will be implications for the UK. Foreign policy is the one area where Trump has internationalists concerned, equally his primary gripe is that NATO members should be paying their way, and the USA is footing the bill for defense in Europe unnecessarily. Indeed, the USA have already stated their concerns that the cuts in British military forces mean the UK is no longer a reliable military partner. Hence, whilst Trump is an Anglophile, his movement is America First, and has more in common with the US policy of isolationism in the 1930s than the interventionist doctrine post WW2. Already he has complained about the trade deficit with European countries and promised to raise tariffs, similarly he has also stated that countries not meeting their budget commitments to NATO can’t be guaranteed to be defended by the USA. With the global financial system fracturing due to Russia being cut out of SWIFT, other countries are now also looking to diversify their foreign holdings. Gold prices are soaring as a result.

Therefore what should we expect if Trump wins?

• The USA to look to increase tariffs on countries they run a trade deficit with. (The UK should be less impacted by this, but France & Germany look vulnerable.)
• The Budget deficit to increase with tax cuts extended for corporations and high net worth individuals.
• Oil Prices to come down as drilling licenses are renewed and accelerated as the USA looks to increase market share.
• NATO members to come under pressure to better fortify their own borders.
• US Corporate Share prices surge, while the USD to weaken against GBP.

In terms of the UK, the implications would be:

• A weaker dollar, which is likely to act to depress inflation within the UK. The UK is a net importer, so GBP strengthening against the dollar is likely to reduce the cost of imports.
• Lower Oil Prices, which are also likely to be a boon for the UK economy, with this benefit helping not just with energy costs but across industry.
• The hostility Trump has towards the EU is ironically likely to mean that the EU is more likely want to work with the UK – how that manifests into policy is unclear though.
• With GBP trending upwards against the USD & EURO, this also has the potential to mean investors shift capital to the UK, to act as a hedge against the USD depreciation.
• US Share prices surging is likely to then accelerate M&A and IPO activity, both domestically and internationally.

In contrast, no one really knows what a Harris presidency means, in terms of policy. Other than on domestic issues such as women’s rights, she has failed to articulate a policy platform. No one thinks her Government would be hostile to the UK, quite the opposite, nonetheless, it is not clear that a Trump presidency would as a result, be bad for the UK either, equally Starmer would be under pressure to commit spending to the military in the way he has failed to do so, so far. However, it is the EU who have the most to fear from a Trump presidency, as under him, America become an economically hostile entity, which will have implications for the French and German economies, and for the long term trajectory of the EURO.