The 2024 Presidential Election: A Pivotal Moment for Corporate America
With the 2024 U.S. presidential election fast approaching, the nation’s corporations find themselves facing two drastically different futures, depending on whether former President Donald Trump or Vice President Kamala Harris secures the presidency. The outcome will significantly impact regulations, merger approvals, tax rates, and the overall business landscape across various sectors, from airlines and banks to tech giants and healthcare providers. This article delves into the potential ramifications for some of corporate America’s largest industries, providing insights into the distinct policy approaches each candidate represents and how these differences could shape business decisions in the years to come.
Key Takeaways: What’s at Stake in the 2024 Election for Corporate America?
- Dramatic policy shifts are anticipated under either a Trump or Harris presidency, impacting sectors ranging from airlines and banking to technology and healthcare.
- Corporate tax rates could increase significantly under Harris (to 28%), while Trump is expected to maintain the lower rate established during his previous term.
- Mergers and acquisitions will likely face stricter scrutiny under a Harris administration, while the environment could potentially loosen under a second Trump term.
- Consumer protection regulations could intensify under a Harris administration, impacting airlines, banks, and other industries that have faced criticism over practices like junk fees.
- The future of the electric vehicle (EV) market hinges heavily on the election, with Democrats championing continued incentives and Republicans potentially rolling back certain regulations and support.
Airlines: A Balancing Act Between Consumer Protection and Industry Growth
The airline industry faces a potential clash between increased consumer protections and the desire for more lenient industry consolidation. The Biden administration, under Transportation Secretary Pete Buttigieg, has prioritized strengthening air traveler protections, with new rules concerning refunds, family seating, and service fee disclosures. Jonathan Kletzel of PwC emphasizes, “Who’s in that DOT seat matters.“
Differing Approaches:
A Harris administration is expected to continue this trend, potentially further restricting airline mergers and acquisitions. The Biden administration’s successful challenges to industry consolidation are a clear indication of this approach. In contrast, a Trump administration is anticipated to foster a more favorable environment for mergers, although industry concern over monopolistic practices remains a point of tension.
Furthermore, Trump’s potential reintroduction of tariffs could impact aerospace manufacturing. Increased tariffs on goods from China, a major supplier and buyer of aircraft, could drive up production costs and potentially trigger retaliatory measures from international partners, creating instability for companies like Boeing.
Banks: Navigating a Sea of Regulatory Change
The banking industry has experienced intensified regulations under the Biden administration, with efforts aimed at curbing excessive fees and revising the capital and risk framework. Tobin Marcus of Wolfe Research notes that a Trump victory would likely lead to “a rolling back of large swaths of” these regulations.
A Complex Landscape:
While many bank executives may welcome a potential easing of regulations under Trump, the picture is not entirely rosy. Trump’s interest in capping credit card interest rates at 10%, a policy with seismic implications for the industry, introduces an element of uncertainty. Moreover, the potential influence of Trump’s VP pick, Senator JD Vance, who has been critical of Wall Street, complicates the prediction further.
Conversely, a Harris administration may not automatically translate into greater regulatory easing for banks. Despite the Democrats’ historical stance, various factors could lead to a less extreme position.
Electric Vehicles (EVs): A Crossroads for the Automotive Industry
The EV sector is deeply divided along party lines. Republicans, led by Trump, have voiced strong opposition to electric vehicles, citing concerns about mandates and their impact on traditional automakers. A Trump victory would likely result in reversing or eliminating emissions standards and production incentives. Volkswagen Group of America CEO Pablo Di Si aptly captures the industry’s uncertainty: “Am I going to make any decisions on future investments right now? Obviously not. We’re waiting to see.“
Contrasting Visions:
In contrast, a Harris administration is seen as largely continuing the existing Biden administration’s policies. While not a direct replication, it’s anticipated that the supportive framework of incentives under the Inflation Reduction Act will largely remain.
Health Care: Navigating the Complexities of Cost and Access
Both Trump and Harris have promised significant changes to the U.S. healthcare system, with a primary focus on lowering prescription drug prices. However, their methods and effectiveness diverge greatly.
Differing Approaches to Drug Pricing:
Harris’s plans build upon existing initiatives under the Biden administration, including expanding the IRA’s provisions for seniors. Her campaign proposes a nationwide expansion of the Act’s $2,000 annual out-of-pocket drug spending cap and $35 monthly insulin cost limit to all Americans and accelerating Medicare’s price negotiation with drug manufacturers.
Trump’s past attempts at tackling rising drug costs were often short-lived or ultimately ineffective. While he has repeatedly denounced the Affordable Care Act, he has stopped short of pledging its full repeal. The specifics of his current health care plan remain largely undefined.
Media: Consolidation, Regulation and the Power of Platforms
The media industry is poised for significant change, with questions of consolidation and potential bias at the forefront. Currently, there’s a general sense that the regulatory environment under the Biden administration has been less permissive to mergers. Warner Bros. Discovery CEO David Zaslav voiced the industry’s desire for “an opportunity for deregulation.”
The Uncertain Future of Mergers and Acquisitions:
The impact of the election is multifaceted. Republicans often prioritize deregulation, which could foster consolidation. However, even under Trump, regulatory hurdles were encountered, demonstrating the complex factors at play. The future of media giants and the extent of governmental oversight remains uncertain, particularly in light of figures like Elon Musk’s actions with X, formerly Twitter.
Restaurants: Balancing Wages and Menu Prices
Both Trump and Harris have pledged to eliminate taxes on restaurant workers’ tips, but different approaches highlight a crucial divergence.
Taxing Tips:
Trump’s plan has given rise to concerns about potential loopholes for high earners. In contrast, Harris’s policy has a wage limit, exempting only those earning $75,000 or less. The plan also goes beyond eliminating tax on tips to addressing the issue of the tip credit, which requires restaurants to pay tipped workers at least the minimum wage, in the 37 states where this practice is legal.
Tech: Navigating the AI Revolution and Antitrust Scrutiny
The explosive growth of artificial intelligence (AI) and its associated regulatory challenges present significant uncertainties for the tech industry. Vice President Harris has stressed balancing public safety and innovation, but Trump has committed to reversing the White House’s January 2024 executive order establishing mechanisms to evaluate AI models. Similarly, the outcome of the election will significantly impact the future of big tech acquisitions during the ongoing antitrust scrutiny.
Antitrust and AI:
The FTC’s actions under Lina Khan have hindered large acquisitions, a development that many in the industry would like to see reversed if a Biden administration were to continue. This perspective is in stark contrast with that of Trump’s running mate, JD Vance, who once viewed Khan’s efforts favorably, despite industry criticism of her leadership.
In conclusion, the 2024 presidential election will have profound implications for the corporate landscape in the United States. The contrasting approaches of Trump and Harris towards regulation, taxation, and antitrust issues will shape the business decisions of major corporations across various sectors, leading to a potentially dramatic shift in the years to come.
