3 minute read 14 Oct 2020
EY - Container ship in export

Four key public policy issues for cross-border businesses to consider

Authors
Bridget Neill

EY Americas Vice Chair, Public Policy

Regulatory and policy strategist. Three decades in shaping public policy impacting global financial markets and accounting profession. Passionate about family. Outdoor sports enthusiast.

John D. Hallmark

Ernst & Young LLP Principal, Public Policy, and US Political and Legislative Leader

Public policy professional with a deep understanding of the Washington legislative and political arenas. Works with key stakeholders to formulate and execute on the firm’s policy initiatives.

Shauna Steele

EY Americas Director, Public Policy

Experienced capital markets, public policy and trade professional helping EY firms in the Americas navigate the dynamic public policy environment. Avid reader, Spanish speaker and mother of three.

3 minute read 14 Oct 2020

This article explores how the November election may influence policies relating to trade and restrictions on cross-border business.

1. Trade

Both candidates have made the US-China relationship a central part of their campaigns and scrutiny of China by Washington policymakers continues to be bipartisan. These views, coupled with a US push to secure the medical supply chain due to the COVID-19 pandemic, are encouraging companies to strengthen the resiliency of their supply chains generally by expanding them to other countries in Asia and the Americas, if not onshoring.

What to expect

In a second term, Trump likely would continue his trade agenda, deploying more tariffs and negotiating new and renegotiating existing trade deals in an effort to support domestic markets and workers. Similar to Trump, Biden has put forward a plan to incentivize manufacturing in the US by taxing certain offshore activities.

2. Scrutiny of cross-border business

Both Congress and the Trump administration have used tools such as sanctions, visa restrictions and withdrawal from bilateral agreements to respond to stated concerns relating to human rights protections and promotion of democracy. Key administration officials also have publicly chastised US companies that do business in jurisdictions where these concerns have arisen. As with trade, much of the recent focus of this activity has been on US-China trade relations and this focus is expected to continue in Washington, regardless of who sits in the Oval Office.

What to expect

Although Biden may be inclined to utilize different tools than Trump to achieve his policy goals going forward, his administration likely would not make rapid changes to existing restrictions on cross-border business created under the Trump administration.

3. Environment

Concerns about the environment have been growing in other parts of the world, as jurisdictions such as the European Union advance plans to counter climate change. US and global businesses are also focused on market-based efforts to address climate change and promote long-term value more generally, even in the absence of regulatory requirements.

What to expect

A second Trump administration is expected to continue to emphasize the role of market-based developments and innovation as the best approach to addressing environmental problems.

Biden has made climate change a core tenet of his platform and has expressed that the US should be a global leader in this space. In addition, he has indicated that he would seek to tackle environmental issues in a multilateral fashion by not only rejoining the Paris Agreement, but also by leading a major diplomatic push to “raise the ambitions” of countries’ climate targets. A Democratic administration and/or majority in either house of Congress likely would emphasize greater focus on environmental issues in future trade agreements — or at least in the US congressional ratification of future trade agreements — as was the case with the US-Mexico-Canada Agreement.

4. Multilateral institutions

As multilateral banks play an important role in the economies of many countries, particularly due to the pandemic, the US government’s role as the largest shareholder in many of these institutions gives it significant influence.

What to expect

Trump is expected to continue to advocate an America First approach to multinational engagement and urge other leaders to adopt similar attitudes about their own countries. Biden, a strong proponent of multilateralism, has pledged to restore US influence and participation in global institutions and work with allies to bring about change.

Summary

Given the important role of the legislature in shaping US foreign policy and commerce, the composition of the US Congress following the November elections also will help drive US federal policy going forward.

About this article

Authors
Bridget Neill

EY Americas Vice Chair, Public Policy

Regulatory and policy strategist. Three decades in shaping public policy impacting global financial markets and accounting profession. Passionate about family. Outdoor sports enthusiast.

John D. Hallmark

Ernst & Young LLP Principal, Public Policy, and US Political and Legislative Leader

Public policy professional with a deep understanding of the Washington legislative and political arenas. Works with key stakeholders to formulate and execute on the firm’s policy initiatives.

Shauna Steele

EY Americas Director, Public Policy

Experienced capital markets, public policy and trade professional helping EY firms in the Americas navigate the dynamic public policy environment. Avid reader, Spanish speaker and mother of three.