The Biden presidency: what business needs to know and what Ukraine needs to prepare for
Vadym Antsyferov, investor, co-founder & CEO GoMage and Sellbery
Heated discussions continue around Joseph Biden's victory in the US presidential election, but, obviously, one can already think about how America will change under his rule as well as the rest of the world. The United States, whose GDP is about 25% of the global economy, will one way or another set the pace and rhythm of the entire planet. What markets and industries are of interest to the future President, what will he stake on? Some of his priorities Joe Biden announced during the election campaign while he declares others on an ongoing basis. It is important for investors and business representatives around the world to understand what will be the focus of Biden's attention. This, in particular, will determine what is worth investing money in and who will directly or indirectly receive support from the influential oval office. It is worth noting that not all of Joe Biden's initiatives will be supported because so far the Democrats are leading only in the elections to the US House of Representatives of the Congress. But control in the Senate is still in question since the votes are equally divided. Nevertheless, the influence of the new US President on America's policy and its main vectors of development will be decisive.
Biden's focus on industries
Middle class and medium business. Here, a "revolution" of the approach is expected in the United States. If Donald Trump strongly supported large corporations and “simplified” their lives, Biden, in contrast, plans to raise income taxes for large businesses and households with large turnover. He also wants to redistribute taxes to improve the lives of ordinary Americans. Biden is the President “for the middle class,” and this is what America is all about. The new head of the country believes that large corporations, including transnational ones (Google, Amazon, Apple, and others) while having a huge income, pay disproportionately little back to the state. However, it is worth noting that it is precisely in this matter that Biden's desires and capabilities may run counter to each other, because the new tax policy may not be approved by Congress.
Industry. Joe Biden is in favor of increasing federal funding for programs to support domestic production. Accordingly, one can expect actions aimed at stimulating investment in industrial sectors.
Green energy and other environmental initiatives. Biden intends to return the United States to the Paris climate agreement. He will advocate for the development of alternative types of energy in the country (solar, wind, and others), for the production of solar storage batteries for different needs.
Electric vehicles. This is another area of US interest that will gain momentum. It is planned to introduce controls and restrictions on harmful emissions from cars. In the domestic auto industry, Biden plans to create about 1 million jobs. And in the development of infrastructure for electric vehicles - the installation of half a million charging stations throughout the country - they plan to invest about $2 trillion. This will make it possible to minimize oil consumption, make the country both more independent and more environmentally friendly.
IT and other technologies. IT giants expect Biden to calm down the storm initiated by Trump. The latter constantly complained about the censorship on the network directed against him, tried to sort out the relationships with the CEOs of various IT giants. This will not happen under Biden. And also the market will not be limited for professionals from other countries, as it was before due to Trump's migration policy.
In the technological direction, the "battle" of the United States and China for world domination will continue. And since the market is huge, promising, with practically unlimited opportunities and capital, neither side intends to lose. In fact, Biden will not deviate from the path that Trump chose in this direction, because the issue of both national security and finance is involved here.
But the new President is likely to change the general approach to global trade. The country's position will be more restrained, free from provocations, and focused on dialogue.
Agriculture. Biden's victory is likely to raise questions about the recovery of the American farming sector after years of turmoil from Trump.
Banks and the financial industry will face tighter regulation, but this is a matter for the future. The new President is likely to focus on the financial consumer protection aspect. His administration is expected to intensify the supervision of creditors and debt collectors.
Of course, it is worth dwelling separately on the issue of relations between Ukraine and the United States under the new head of the White House. Ukraine is now in an extremely stressful situation. Our policy is unpredictable, there is no stability, there is a crisis in the judicial system, the responsibility of political leaders, and the fund to fight the coronavirus is being spent unwisely. All this is a stop factor for potential investments in our country because business loves planning and compliance with agreements. At the same time, we have a significant budget deficit, possible problems with obtaining external loans, a drop in GDP (according to IMF forecasts - by 7.2% by the end of the year), a decrease in trade turnover for 10 months of 2020 by 9%.
In such circumstances, the issue of support from the United States - both political and financial - is acute. The States have a great influence in the IMF on the tranches of which Ukraine counts so much.
So Biden's coming to power gives Ukraine hope. At least, hope for helping our country receive all kinds of support in the world arena. But Ukraine also needs to make efforts for this instead of further "drowning" in corruption scandals, which Biden himself considers one of the biggest "burdens" of our country.