Key Election Stakes for Major Industries: Trump vs. Harris

As the U.S. presidential election approaches, major industries, including airlines, banks, electric vehicle manufacturers, health care companies, media firms, restaurants, and tech giants, are bracing for potential shifts in regulations, mergers, and tax policies based on the election’s outcome. With starkly different visions for the country, both candidates present unique implications for corporate America.

Former President Donald Trump, if elected for a second term, is expected to reinstate many of his previous policies, including slashing corporate taxes, imposing tariffs on Chinese goods, and easing regulations across various sectors. Trump previously reduced the corporate tax rate and took a hard stance against immigration, initiatives he is likely to promote again.

In contrast, Vice President Kamala Harris is expected to maintain many of President Joe Biden’s policies, including a push against “junk fees” across industries and a proposal to increase the corporate tax rate from 21% to 28%. This would require congressional approval, but most corporate insiders anticipate Harris will follow a trajectory similar to Biden’s administration, potentially leading to a more moderate approach.

Airlines
The presidential election outcome could significantly impact airlines, affecting consumer protections and merger opportunities. Under the Biden administration, the Department of Transportation (DOT) has pushed for stronger protections for air travelers, resulting in new regulations regarding refunds, family seating, and service fees. Trump’s administration, however, took a more lenient stance, favoring mergers and consolidations, which could change the competitive landscape in the airline industry.

The aerospace sector, particularly Boeing, is concerned about potential tariffs on Chinese goods, which could raise production costs. Trump’s support for increased tariffs might challenge the industry if retaliatory measures are enacted by other countries, particularly those that purchase aircraft from Boeing.

Banks
The banking industry has faced significant regulatory changes under the Biden administration, with new rules impacting credit card fees and capital requirements. If Trump is re-elected, he is likely to nominate financial regulators who could roll back many of these regulations, providing relief to banks and facilitating mergers. However, some experts caution that Trump’s new vice presidential pick, Senator JD Vance, has criticized Wall Street, suggesting a more cautious approach to deregulation.

Electric Vehicles (EVs)
Electric vehicles have become a contentious issue between Democrats and Republicans, particularly in key auto manufacturing states. Trump has expressed intentions to eliminate vehicle emissions standards and incentives for EVs, which would disrupt the current momentum in the EV market. Conversely, Harris is likely to continue supporting incentives for EV adoption, although her recent hesitance to endorse strict mandates indicates potential shifts in strategy.

Health Care
Both Trump and Harris aim to reform the costly U.S. healthcare system, which struggles with high costs and poor health outcomes. Both have targeted the pharmaceutical industry to lower drug prices, but their approaches differ. Harris plans to expand provisions of the Inflation Reduction Act, including a cap on out-of-pocket drug spending and allowing Medicare to negotiate prices. In contrast, Trump’s previous efforts to reduce drug prices were largely temporary and often ineffective.

Media
The media industry is grappling with potential mergers and acquisitions amid a changing regulatory landscape. Executives express concerns over the Biden administration’s approach to antitrust issues, which has stalled many deals. The future of media consolidation could hinge on whether Trump or Harris takes office, with expectations of a more lenient regulatory environment under Trump.

Restaurants
Both candidates support eliminating taxes on restaurant workers’ tips, but their approaches differ significantly. Trump’s vague proposals could create loopholes for high earners, while Harris aims to exempt lower-income workers and eliminate the long-standing federal tipped wage of $2.13. Changes in tip taxation could impact wages, menu prices, and demand in the restaurant industry.

Tech Industry
The tech sector faces significant challenges depending on the election outcome. Trump has pledged to repeal regulations aimed at ensuring cybersecurity and might pursue policies favoring larger tech mergers. In contrast, Harris’s administration would likely continue to prioritize oversight and regulation, particularly in the rapidly evolving AI sector, with the FTC under Lina Khan maintaining a strict stance on antitrust issues.

In summary, the 2024 presidential election poses critical implications for various industries. From regulatory changes and tax policies to corporate mergers and consumer protections, the outcome will shape the business landscape for years to come.

Sources: AirGuide Business airguide.info, bing.com, cnbc.com