(Nov. 11, 2020) — The United States recently concluded its 2020 Presidential Elections, with Democrat bet Joe Biden declared as the winner. As the country transitions to a new leader, business owners and corporate leaders should look out for these changes under the new administration. Read on to know more.
Every U.S. presidential election always draws intense worldwide attention. Being the most powerful country globally, electing America’s next leader is something that every individual, media outlet, and corporation is looking forward to. This is because whoever becomes the next president of the world’s leading nation will have a significant bearing on global trade, political and economic issues, as well as on international affairs.
According to political experts, the 2020 election is the most consequential election in the history of America. Before the election, critics argue that America’s appeal as the world’s leading nation has been diminishing at a faster rate. A September 2020 Pew Research survey shows that America’s reputation has declined further over the past year among allies and foreign leaders under the Trump administration. This comes after Donald Trump’s alleged mishandling of the coronavirus pandemic, as well as his insulting remarks towards the country’s allies and other political leaders.
However, Trump’s top contender, former Vice President Joe Biden, aims to turn things around. Now officially the 46th president of the United States of America, Biden is now expected to deliver his “Build Back Better America” campaign into reality. His slogan focuses on fostering economic nationalism, improving the middle class, and building sustainable infrastructure and clean energy.
But what does Biden’s win mean for foreign entrepreneurs and companies doing business in the U.S.? Here are some things business leaders alike should expect under the new Biden administration, according to political experts:
Increased investments in manufacturing and technology
Biden’s “Buy American” agenda aims to mobilize public investments in procurement, infrastructure, as well as research and development to boost the manufacturing and technology industry in the U.S. The new administration plans to invest $400 billion in procurement to power new demand for American products and services and $300 billion in research and development projects, particularly for electrical vehicle technologies, artificial intelligence, and greener energy.
The plan is projected to create five million new high-value manufacturing jobs across the U.S. The massive job creation effort is also expected to help the American economy recover from the COVID-19 pandemic.
Reforms on corporate taxes, particularly on foreign profits
Biden is pushing for higher taxes on foreign income of U.S. companies within the context of its “Made in America” slogan. Such a move is a contrary response to Trump’s tax reform signed in 2017, where the latter lowered the corporate tax from 35% to 21%. Large corporations can expect to see corporate tax rates rise to 28% under the Biden administration. A minimum levy will also be imposed on foreign earnings, while workers earning more than $1 million a year might face higher income tax rates starting 2021.
Some economists have criticized Biden’s new tax regime, saying that a higher corporate tax burden can result in lower wages for workers and reduced investment for the American market.
However, most analysts say otherwise, claiming that the strategy only aims to encourage large corporations to pay their fair share in taxes and will not significantly impact worker’s earnings.The new plan also aims to provide special tax breaks for domestic manufacturers, which can boost local entrepreneurs’ significance across the country.
Expanding the middle-class workforce amid COVID-19 recovery
The COVID-19 pandemic has triggered the worst employment crisis in the U.S. since the Great Recession. The country’s unemployment rate soared from 3.8% in February to 13% in May. This means that the number of unemployed workers across the U.S. rose by 14 million in just a span of three months – from 6.2 million in February to 20.5 million in May. Such an increase is significantly greater than the 2007 financial crisis, according to analysts.
To combat this, Biden has laid out a comprehensive plan that aims to drive America to recover and ensure workers’ health and safety during the pandemic. This includes:
- Providing immediate relief to state and local governments that will limit lay-offs among essential workers
- Extending the COVID-19 unemployment insurance packages to help affected workers cope with the crisis
- Providing a “comeback” package for businesses and entrepreneurs for reopening
Biden also aims to create millions of new “good-paying” jobs to alleviate unemployment woes in the country, particularly in infrastructure, automotive, agriculture, and technology.
Every change in leadership entails new policies, especially when it involves the world’s most influential country. Preparing for such changes can help ensure a smooth transition and continued success for your business, regardless of who is in authority.