Donald Trump as president: What the US election means for UK business

“If liberals are so f***ing smart, how come they lose so god-damn always?” 

I was reminded of that quote from the TV show The Newsroom this week after the result of the US election, which saw Donald Trump elected president.

There is much to unpack about why America voted as it did, but it is clear that the polls were wrong and that optimism among Democrats that Kamala Harris would win were misplaced. Some voters appear to have told pollsters one thing and then done another (voted for Trump). Others were never reached by pollsters.

An exit poll by NBC, the US broadcaster, claimed that the future of democracy was the biggest issue for voters. Thirty-five per cent of voters told this to pollsters, compared to 31 per cent who cited the economy and 11 per cent for immigration. But both the economy and immigration mattered more when they actually voted. Trump consistently rated ahead of Harris on these two issues. Harris was always ahead on protecting democracy. 

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Interestingly, betting markets were far more accurate in forecasting the election than the polls. Trump was rated as a strong favourite compared to Harris. These markets followed people’s money rather than what they said.  

One lesson from the result of the US election is that what people say they want and what they actually want are often different. This matters for businesses too. Consumers may say they want something when you survey them, but then buy something entirely different. Businesses add value by working out what people really want and delivering it.

In the last issue of the Business Leader magazine, we included a quote from Steve Jobs, the co-founder of Apple, on this topic. “It’s really hard to design products by focus groups,” Jobs said. “A lot of times, people don’t know what they want until you show it to them. That’s why a lot of people at Apple get paid a lot of money, because they’re supposed to be on top of these things.” Jobs was not rubbishing the value of surveys or research here, rather he was emphasising the importance of Apple’s role. 

The reaction in financial markets to Trump’s victory has been boisterous, fuelled by a belief that his administration will seek to cut taxes and regulation. The Dow Jones Industrial Average, the main stock market index in the US, is up nearly 5 per cent since the result of the election was confirmed. Tesla, led by Trump supporter Elon Musk, is up by 20 per cent. Bitcoin has risen by more than 10 per cent and cleared $75,000 (£57,900) for the first time.  

But for businesses in the UK the future is less optimistic. Just days after being hit by an increase in taxes by the new Labour government (more on that below), those exporting to the US could now face a tax on their sales. Trump has pledged to pursue protectionist trade policies that support US businesses and even floated the idea of a 10 per cent tariff on all goods imported into the US.

The Guardian has done a neat summary of all the potential trade policies, which you can find here. In short, they are not great for businesses exporting to the US. Shares in FTSE 100 drugs group GSK, which exports products to the US, have dropped more than 3 per cent since the election result. In Germany, shares in car makers like BMW and Mercedes-Benz have also fallen. 

This week, we asked Business Leader readers via social media what the impact of Trump’s presidency could be on UK business and economic stability. Almost 40 per cent said they thought there will be a positive impact and 60 per cent said a negative impact.