Understanding Potential Impacts of the US Elections for Your Company

Any company that works with international clients knows that the 2024 US presidential elections is a pivotal moment not just for American citizens but for the entire world.  
 
The upcoming elections can influence everything — from a company’s operations to the tax policies and trade regulations that affect its financial stability. With this, if you are from a company dealing with international relations or US-based clients, here are some ways on how the elections may impact your operations.  

Read: How to Handle Inflation through Proper Financial Management  

Tax Policy Changes 

The proposed tax policy changes of each presidential candidate can bring the most immediate effects on your company’s day to day business.  

If you look into the different platforms of the US presidential candidates, you’ll see that a new administration might result to lower or higher corporate taxes. It can also result in changes in tariffs and trade taxes that can influence the prices of both your raw materials and end products. 

 
How Can You Prepare for it? 

Corporate tax changes can affect your profitability and cash flow – resulting in your previous financial plans and strategies becoming moot and inaccurate.  

With this, it is wise to analyze the tax proposals of each candidate and create financial plans based on each proposal. Companies that are heavily reliant on tax deductions, incentives, or have global operations must pay particular attention, as changes in tax laws could significantly affect their bottom line. 

Trade Policies and Tariffs 

If your company is outside of the US, then the second most significant impact is changes to trade policies and tariffs and trade agreements. 

All presidential candidates for the US 2024 presidential election have taken a stand on trade and tarrif plans which may result in changes in global trade policies and relationships with certain countries regarding essential goods. 

 
How Can You Prepare for it?

Changes in tariffs affect global inflation trends – meaning, it can affect your company’s pricing strategies for your clients who are based in the United States or use the USD as their income currency. With this, you must be prepared to absorb an increased or decreased tariff cost for your products and services and create financial models that are adaptable to changes in the cost of doing business internationally.  

Regulatory Environment 

Aside from the financial effects of the US Presidential Elections, you should also be mindful of the potential regulatory changes that can either become more stringent or relaxed. To be able to operate on an international level, companies must adhere to the different regulatory bodies of several countries and industries, which may be affected depending on the results of the elections. 

 
How Can You Prepare for it? 

Changes in regulatory policies may go two ways – it can either become more stringent or more relaxed depending on the guidelines they set to allow foreign companies to operate in their country. A more regulated environment could mean additional compliance costs, while a deregulated environment might offer opportunities for more aggressive growth strategies, positioning your company to be able to identify opportunities for success.  
 
Along with your financial strategy to mitigate changes in tax and trade policies, it is wise to allocate enough liquidity or a portion of your finances to absorb potential additional compliance costs and for you to then integrate it into your future financial plans.  

 
 
Market and Economic Volatility 

Finally, the period around a presidential election often brings increased market volatility. Investors and financial institutions face uncertainty about the future, leading to fluctuations in stock prices, exchange rates and even inflation.  
 
While this volatility can create risks, it also offers opportunities for companies to take advantage of short-term market movements – one thing that can be beneficial for you in this time of uncertainty.  

How Can You Prepare for it? 

This is where your risk management strategies come into play. You can use the strategies you have outlined for market fluctuations such as wealth diversification or wealth and operations management or even use your business continuity procedures to lower operational costs while still maintaining operations.  

Using your risk management strategies allows you to become prepared for any negative market volatility effects at worst and gives you the flexibility to expand and find areas for growth at best – making it a win-win situation for your company.  

While it is true that the outcome of a US presidential election can affect your company’s financial health, whether you are a company based in the United States or not, it doesn’t mean that you cannot prepare for it.  

By educating yourself on the platforms of every presidential candidate, you can create financial plans that safeguard your company’s financial health regardless of the election’s results. During this time, your management team along with your finance and accounting team, should monitor policy discussions closely, perform scenario analyses, and stay flexible in their approach to strategic planning. 

Read Next: 4 Financial Management Tips to Protect your Company's Assets 

Ready to Handle the Potential Changes? 

We have a wide expertise in handling the numbers of companies across various countries. We also make it our mandate to stay up to date on any changes to the finance and accounting industry on a global scale to ensure compliance at all times.  
 
Contact us today and we’ll help you find the right solution for your needs. 

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