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Of: TT
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Photo: Olivier Douliery
Republican President Donald Trump and Democratic presidential candidate Joe Biden met for a debate on September 29. On November 3, Americans go to the polls.
Biden or Trump? Who wins the US presidential election may matter to Swedish companies that do business or trade with the US and are affected by the country’s tariffs and tax levels.
But perhaps more important than who wins, that there will be a clear result.
On November 3, Americans go to the polls. Will there be another four years with Republican Donald Trump? Or will it be a shift towards Democrat Joe Biden?
Here are some points in the presidential candidate program that, in one way or another, are considered to have an effect on Swedish companies as well.
Investments in infrastructure
Both candidates have significant infrastructure investments in their programs that would stimulate the economy and create jobs. But for something like this to become a reality, it requires political force and obtaining a majority in both houses of Congress, the Senate and the House of Representatives.
– Trump’s problem has been that he has had the power of the Republicans in one chamber and the Democrats in the other. Then it will be difficult to pass great proposals. Biden seems to have the best chance of getting a majority in Congress and launching this, says Maria Landeborn, an analyst at Danske Bank.
Swedish companies with large US sales related to infrastructure of various kinds could benefit from it.
– There you have SSAB and Skanska, for example, says Esbjörn Lundevall, SEB equity strategist.
At the same time, Albin Sandberg, an analyst at Kepler Cheuvreux who monitors Skanska, points out that the company’s operations in the US do not coincide or fall with one or the other candidate.
– Regardless, it is a good market to operate on Skanska. The US construction market is strong, says Albin Sandberg.
However, signs of new investments can boost the stock price.
Customs and trade wars
Donald Trump has not hesitated to create a bad mood in trade relations with other countries in order to promote national production. In addition to the trade war with China hitting the global economy, the introduction of tariffs on cars imported into the US from China has also affected Swedish Volvo Cars.
In 2018, Trump also introduced tariffs on steel and aluminum imported from, among others, EU countries.
With Biden, it is not certain that the introduced tariffs will disappear, but the probability of sudden new tariffs will disappear.
– The risk of new fees is likely to decrease with Biden. He is not interested in escalating trade wars in that way. However, it has not promised to dismantle the tariffs that are already in place, says Maria Landeborn.
Those operating in industries that depend on the flows of goods across national borders, under the Donald Trump administration, have lived with having to dodge a certain amount of uncertainty and unpredictability, for example when it comes to tariffs that hinder planning activities in the best way. That kind of uncertainty is expected to lessen significantly if Joe Biden becomes president.
– A Trump victory would mean continued great uncertainty. It’s incredibly spontaneous in a very negative way. It is not known overnight what new rates will come or the like, says Esbjörn Lundevall.
Trump has also threatened to impose tariffs on EU cars.
– The entire auto industry has been under pressure with Trump in power. If Trump wins four more years, one can imagine that the pressure will continue and one can imagine that there is risk in that entire sector. Swedish companies like Autoliv and Veoneer would be affected by that uncertainty, says Maria Landeborn.
Corporation tax
Under the Trump administration, the corporate tax was lowered from the previous level of 35 percent to 21 percent. Democrat Joe Biden’s program includes plans to raise corporate taxes to 28 percent.
– Naturally, it has a negative effect on the profits of all Swedish companies that have significant operations in the US and that’s almost it. All the big companies, except banks and forestry companies, have operations there, says Esbjörn Lundevall.
Salaries
Joe Biden goes to the polls to give more money to people with low and middle incomes. Among other things, he wants to double the minimum wage from $ 7.25 an hour today to $ 15 an hour, which corresponds to just over 130 crowns.
– It benefits the consumer, which in that case benefits mainly US retail companies. But one Swedish company with many low-wage employees is the Loomis cash transport company. If Biden wins and complies with his proposal, his costs would increase, says Maria Landeborn.
Environment and climate
– The really big difference, the decisive difference, between the candidates is on the environmental and climate front. Biden promises significant investments in a green transition in line with what most countries in the rest of the world are doing. While Trump is very against. A Trump victory could benefit the fossil fuel industry, such as oil companies, while solar and wind are the big winners with Biden. So it doesn’t have a big impact on the Stockholm Stock Exchange, says Esbjörn Lundevall.
The result of the elections
If there’s one thing investors in the stock market disapprove of, it’s uncertainty. Not having a clear outcome after Election Day on November 3 could therefore shake up the stock market and cause share prices to fall.
– If Trump loses, but only marginally, and refuses to leave office and asks that the result of the elections not be accepted. That scenario is the last we want to see, says Esbjörn Lundevall.
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