A few months into the new U.S. administration, CBI Washington reflects on the policy developments of most importance to British business
At the beginning of every new administration, there is a flurry of activity for the business community to note. From regulatory reform to trade policy, CBI Washington takes a look at the developments to date and campaign pledges to watch.
Who’s in the new administration?
One of the most pressing tasks for a new President is to fill out the thousands of vacancies that make up an administration. While President Trump has confirmed some positions, hundreds requiring Senate confirmation remain without a nominee, and others are progressing through the Senate hearing and confirmation process.
Figures for business to familiarise themselves with include Secretary Wilbur Ross at the Commerce Department, Secretary Stephen Mnuchin at the Treasury Department, Secretary Rick Perry at the Energy Department, and U.S. Trade Representative Robert Lighthizer.
What’s on the agenda?
What's on the agenda that these new staff are tasked with implementing? Before the election in November 2016, a long list of policy pledges were made on the campaign trail. Policy on trade, tax, and regulation are just some of the areas for business to take note of as the legislative agenda moves forwards.
The Presidential campaign shone a spotlight on trade, with both major political party candidates taking a critical view of the Trans-Pacific Partnership and other free trade agreements. But President Trump has been positive on deepening the trading relationship between the U.S. and the UK, which drives growth and prosperity on both sides of the Atlantic. The CBI’s annual Sterling Assets report demonstrates that the UK continues to be the single largest foreign investor in the U.S., with over $449bn invested as of 2014. But there is more to be done to bring down the remaining trade barriers British and American companies face to investing in each other’s economies. It is important now that any agreements are comprehensive and work effectively to address those barriers.
Tax reform is an incredibly difficult feat and one that could take quite some time, but it is long overdue. The last major overhaul of the tax code was in the 1980s. The administration released an outline of their desired tax plan in April, but the business community will have to wait for further detail as Congress puts pen to paper. Worth watching closely are the headline corporation tax rate, and whether the controversial Border Adjustment Tax (BAT) from House Speaker Paul Ryan’s blueprint makes it into draft legislation.
Getting the balance right on regulation is a challenge. What will be important is not whether there is more or less regulation, but how smart and effective that regulation is. President Trump promised to cut red tape on the campaign trail and has used his executive powers to make some progress on this agenda.
In the midst of policy initiatives from the White House and Congress, it is perhaps the confirmation of Supreme Court Justice Neil Gorsuch that marks the administration’s most significant development to date. Following his inauguration in January, Donald Trump nominated Gorsuch to fill a vacancy left by the passing of Justice Antonin Scalia in February 2016, which had meant the Supreme Court had an open seat for over a year. Gorsuch’s confirmation will shape the nature of the Court for a generation, as these are lifetime appointments.
The flurry of activity in Washington DC will continue as Congress and the White House push to make progress on their campaign promises before the long August recess. With healthcare and tax policy at the forefront of the agenda, we can expect intense debate on these highly technical and politically sensitive policy agendas to continue for some time.