Business Leaders to Pullback Investment and Trade with China Under Second Trump Administration; Worry About US Corporate Tax Policy Under a Biden Administration, According to PwC Survey

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Tuesday, October 13, 2020 -- According to the latest results of PwC’s Road to Election 2020 Pulse Survey of 537 C-suite leaders, US executives say they are more likely to increase investment and trade with the European Union (EU), the United Kingdom (UK), Mexico and Canada, and other countries, regardless of who wins the presidential election. One exception is with China, where executives note they are more likely to decrease investment and trade in China under a second Trump administration (42%). See ‘key survey results’ below for full detail.

In addition, the top policy-related risk for executives under both a Trump or Biden presidency is change to US corporate tax policies. However, C-suite leaders are significantly more concerned about potential change to corporate taxes policies under a Biden administration (62%) compared to a second Trump White House (39%). Uncertainty around the federal government’s response to the COVID-19 pandemic is the second most pressing policy-related risk for survey respondents (35% for both Biden and Trump). Respondents diverged on the third most pressing policy-related risk, with healthcare reform under a Biden administration (33%) and US-China relations with a second Trump term (32%).

When asked how the outcome of the general election will impact US corporate tax rates, 76% of US executives surveyed say that business tax rates will rise in order to pay for COVID-19 relief, regardless of which party controls Congress -- an increase of 6 percentage points from a month ago.

Executives continue to look for deals to drive growth in 2021. Most plan to pursue an acquisition: 64% under Trump compared to 62% under Biden. However, business leaders surveyed believe there will be more regulatory scrutiny on deals in the 12 months under a Biden administration (61%) versus a second Trump term (41%). 

“Despite the global pandemic and uncertainty about policy outcomes related to the results of the US election, business leaders are laser focused on pursuing growth strategies, whether it’s foreign investments, evaluating new deal opportunities or looking to increase international trade,” said Tim Ryan, PwC US Chair and Senior Partner. “CEOs know they have to do everything they can to expand their businesses in order to keep their people employed and help rebuild the economy.”

Key Survey Results:

Trade

Executives' Decisions on Trade and Investment Strategy Based on Who Wins the Presidency

 

EU

UK

USMCA

China

TPP

Other Agreements

Increase under Trump

30%

31%

28%

15%

26%

19%

Increase under Biden

31%

31%

27%

28%

27%

18%

Decrease under Trump

15%

9%

11%

42%

15%

16%

Decrease under Biden

12%

10%

11%

20%

8%

14%

Top Policy Concerns

Executives' Top Policy-Related Risks Based on Who Wins the Presidency

Trump Top Policy-Related Risks

1. US corporate tax policy
%
2. COVID-19 pandemic response
%
3. US-China business relations
%
4. Tech and data regulation
%
5. New trade agreements
%
5. US immigration policy
%
7. US foreign policy
%
8. Healthcare reform
%
9. Non-US tax rules
%
9. Sustainability and energy transformation
%

Biden Top Policy-Related Risks

1. US corporate tax policy
%
2. COVID-19 pandemic response
%
3. Healthcare reform
%
4. Tech and data regulation
%
5. US-China business relations
%
6. Non-US tax rules
%
7. New trade agreements
%
8. Sustainability and energy transformation
%
9. US foreign policy
%
9. US immigration policy
%

Deals

  • Executives are just as likely to consider a divestiture in the next 12 months under a second Trump administration (44%) as they are with a Biden administration (46%).

Antitrust

  • More than a quarter of respondents (27% under a Biden administration vs. 26% under a second Trump administration) see potential new risks in regulations to address technology and data concerns like antitrust and privacy.

About the survey:

PwC Road to Election 2020 Survey

PwC fielded a study among 537 C-Suite and other executives to understand current levels of concern with and anticipated policy impacts of the 2020 US election. This survey fielded from September 29 to October 5, 2020, among executives, including 176 chief financial officers, 139 tax leaders, 93 chief risk officers/chief audit executives/chief information security officers, 69 chief human resource officers, and 60 chief operating officers. 67% of respondents are from Fortune 1000 companies. The PwC Road to Election 2020 Pulse Survey is taking place regularly to track changing sentiment and policy priorities. The first iteration of the Road to Election 2020 Pulse Survey was conducted August 28 to September 3, 2020. You can view all findings and insights by visiting: www.pwc.com/us/election2020

About PwC

At PwC, our purpose is to build trust in society and solve important problems. PwC is a network of firms in 157 countries with more than 276,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

© 2020 PwC. All rights reserved.

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Ryan Cangialosi

Ryan Cangialosi

Assurance, Audit, Corporate Governance, Cybersecurity & Privacy, Risk Assurance, Risk & Regulatory, Trade & Tariffs, PwC US

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