A legal challenge of the US election result means a dilemma for the UK Government in deciding on a UK/EU Brexit deal, say tax and advisory firm Blick Rothenberg.
Alex Altmann a partner at the firm, who is also a Chairman of the British Chamber of Commerce in Germany, said: “The negotiations with the EU are in the final round and a trade deal is close. The EU wants a deal to be agreed by 13 November to have enough time for the lengthy ratification process with their member states. The die has been cast and it is time to finalise the deal now.
“The prospect of a quick UK/US trade deal is in jeopardy now and does not help the UK’s negotiation position with the EU. The UK certainly lost some leverage with the unclear US election result. The prospect of a Biden White House is real, who wants to see the Irish Good Friday agreement protected by a Brexit deal before negotiating a UK/US trade deal. This will severely impact the UK government’s negotiating position.
“A Brexit deal announced next week would boost the rattled UK economy and might increase the chances of a swift US/UK trade deal in 2021. If the UK Government wants to avoid two “no-deals”, it needs to come to terms and finalise the negotiations with the EU now.”
What will be the impact on UK businesses?
Christian Stadler, Professor of Strategic Leadership at Warwick Business School, said: “One thing that businesses crave is stability and they won’t get that if this close-run election leads to legal challenges and weeks of uncertainty.
“US businesses have suffered several years of instability with policy flip flops, trade wars, and the fallout from the COVID-19 pandemic. Indeed, the University of Chicago has observed that policy uncertainty has been greater under Trump than at any other time since 1985.
“The lack of a clear winner could also hinder plans for vital investment in infrastructure. Both candidates recognised the need for investment, though Biden had pledged considerably more, promising $2.4trillion compared to the $1trillion put forward by Trump.
“However, the parties have not been able to agree on how to spend that money. Failure by either party to win both Congress and the Senate would make it significantly more difficult for the President, whoever that might be, to push through his plans to spend big on infrastructure to help the economy recover as the country emerges from the pandemic.
“Business in Britain will also feel the fall out of this election. The Johnson government would be more likely to pursue a no deal Brexit after a Trump victory, as they will be hoping for a quick and favourable trade deal with the US, though it is impossible to predict what kind of deal you will get with a Trump administration.
“The US under Biden would be more likely to favour a close relationship between the UK and the EU and a fairly comprehensive deal. Business leaders in the UK have repeatedly raised concerns about the prospect of a no deal Brexit, so a Biden victory could be good news for them.
“The lack of a clear winner in the US election could create yet more uncertainty for UK businesses as time runs out before the country leaves the EU.”