Key Points

  • An EY report notes that the presidential race between Vice President Kamala Harris and former President Donald Trump is making the outcomes of six key policy issues a higher risk for corporate executives' strategic decisions.
  • Although Harris and Trump hold similar positions on China policy, their policy paths diverge significantly on taxes, trade, regulation, climate change, workforce challenges, and technology sectors including artificial intelligence.
  • EY stated: "The 2024 election outcome could reshape the public policy landscape and influence the priorities of C-suite executives and boards across the U.S. Harris and Trump's policy approaches show notable differences—and some similarities—that are driving corporate strategy."

In-Depth Insights

The upcoming November 5 election—like other unpredictable and far-reaching changes—has made chief financial officers (CFOs) in North America more risk-averse than at any time since 2009, according to Deloitte's quarterly survey.

Deloitte data shows that only 12% of CFOs view the current environment as favorable for taking greater risks, down from 26% in the second quarter and 41% in the third quarter of 2023.

Deloitte also noted that top financial executives are equally concerned about inflation, the economic outlook, and potential threats from overseas conflicts. They most want the federal government to remove barriers to retaining skilled labor and help overcome talent shortages, wage inflation, and regulatory hurdles.

On workforce challenges, EY says both Harris and Trump have positioned themselves as defenders of labor and would need to use executive power to manage immigration issues rather than relying on a divided Congress.

However, the two candidates differ in how they approach labor issues, particularly on southern border management and topics such as diversity, equity, and inclusion (DEI).

EY points out that a Harris administration might continue the current White House efforts to streamline business visa approvals, while a second Trump term could impose stricter visa requirements and "emphasize the domestic workforce."

Meanwhile, EY believes both Harris and Trump could push trade and tax policies aimed at improving the prospects of American labor and manufacturing.

For example, both candidates are skeptical of free trade and focus on protecting U.S. manufacturing and supply chains.

According to EY's analysis, Harris might maintain or strengthen the Biden administration's efforts to combat climate change—a move criticized by Trump—and seek to enhance worker protections. Trump advocates for significantly higher tariffs to reduce the trade deficit—a proposal criticized by Harris.

Nevertheless, "tariffs will remain a sharp economic and geopolitical tool regardless of which administration is in power," said John Hallmark, EY's U.S. political and legislative leader, in an email response, adding that "Harris and Trump have more similarities on key issues than many realize."

EY says both Harris and Trump could continue the trend of relying on executive power to shape regulation.

However, Harris might pursue a more ambitious agenda on Securities and Exchange Commission (SEC) rulemaking and oversight of public company auditors. Additionally, Trump might take a "lighter touch" in handling banking regulation.

In the technology sector, EY says both Harris and Trump recognize the potential benefits of artificial intelligence but differ on how to minimize its risks.

EY notes that the Biden administration issued an executive order last year to promote the creation of "safe, secure, and trustworthy" AI systems, while Trump has pledged to repeal it, claiming it threatens free speech.

On taxes, both candidates support the child tax credit and exempting tip income from taxation.

However, EY says Harris and Trump have starkly different approaches to the expiration of the 2025 Tax Cuts and Jobs Act (TCJA)—a key initiative of the Trump White House.

Trump supports extending the TCJA and has expressed support for further lowering corporate tax rates; Harris, meanwhile, has said she wants to raise rates for corporations and high-income individuals while maintaining current rates for taxpayers earning under $400,000 annually.

"American politics is in a period of greater ideological dynamism than at any time in recent memory," Hallmark said. "Both candidates and both parties are breaking new ground with voters, and political orthodoxy is being tested."