Af Peter G. H. Madsen og Niels Brandt Petersen mail
Grundfos headquarters in Bjerringbro follow news about the US presidential election very closely.
Grundfos employ 1,200 people in the United States and have – like many other Danish businesses – in recent years experienced increasing growth in the American market which currently imports products and services from Denmark worth more than DKK 100 billion per annum.
But the vision and ambitions of a new president may tamper with this profitable situation enjoyed by Danish businesses on the other side of the Atlantic and reverberate across the rest of the world.
“The presidential election has an impact on the global and national agenda in the United States. It is clear that the next president will be able indirectly to affect our way of doing business in the United States,” says Kim Nøhr Skibsted, communications director at Grundfos, and refers to the fact that the situation for Grundfos depends mainly on the political agenda in Congress and at state level where energy policy is made.
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According to Peter Thagesen, director of international market policy at the Confederation of Danish Industry, Donald Trump and Hillary Clinton are different in many ways. But they share one position and that is their antipathy to free trade. This is otherwise something the United States has been the standard bearer for for many years.
Hillary Clinton has criticised the TTIP agreement which, in addition to the United States, includes 12 countries on the Pacific Rim. This antipathy may mean that America will drag its feet if Clinton is the one negotiating the transatlantic TTIP agreement as president.
If Donald Trump should win the presidency, it may mean that not only future, but existing trade agreements, regulations and institutions will be rolled back or weakened.
Trump has promised that he would introduce import duties on Mexico and China of 35% and 45% respectively. This may easily trigger a trade war between these nations which may have a negative impact on the United States in both the short and longer term.
According to Peter Thagesen, the protectionist agenda that both Trump and Clinton support is bad news for the American economy and will affect the rest of the world and especially small, open and export-reliant economies like Denmark’s.
“Especially Trump believes that the US needs to turn its back on the open market. That move will present a challenge for Danish businesses. It is the wrong way to go. We need to reduce barriers to international trade – not set up new ones. Open societies and free trade generate growth and prosperity,” says Peter Thagesen.
He points to a survey conducted by the Peterson Institute for International Economics which shows that the United States with Trump as its new president may end up in recession by 2019.
“The American economy is currently growing, but that growth may stop if the new president cuts back on America’s free trade ambitions. This will impact on the activities of Danish businesses in the American market as well as their exports,” says Peter Thagesen.
At Grundfos, Kim Nøhr Skibsted does not hide his concern about Donald Trump and the presidential candidate’s opposition to international climate agreements.
This may put a damper on the growing transition to a green economy taking place in the United States and elsewhere which has generated growth opportunities for Danish businesses such as Grundfos.
“Viewed globally, our agenda will be challenged if Donald Trump wins as he does not intend to continue with the climate agenda that Barack Obama has championed,” he says.
Peter Thagesen shares Grundfos’ view of the Trump climate policy.
“To anyone working with green solutions such as solar energy, bio energy or district heating, it is no fun listening to Trump talking about withdrawing from international climate agreements. Hillary Clinton’s statement, on the other hand, that the United States should be a green superpower is music to their ears,” says Peter Thagesen.
He also points to the healthcare industry as an area that may be affected by the election. Especially Barack Obama’s public healthcare scheme, the so-called Obamacare, may enter a new era after the election and this means changes for the business community.
“Trump has proposed throwing Obamacare out with the bathwater while Clinton wants to continue work on Obama’s healthcare plan. Uncertainty about what the healthcare sector will look like is generally not good news for exports and investment,” says Peter Thagesen.
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Peter Thagesen’s advice to Danish businesses is to follow the election campaign closely and to wait and see who will be picking up the keys to the White House in January. It is also important to focus on how elections for Congress as well as the policies implemented at state level will pan out.
“Just as in all other export markets, you need to keep up to speed on what is going on in terms of what drives the market forward – and that includes politically. You have to remember that in the United States it is not enough to know what is happening at presidential level. If a company wants to do business in Ohio or New Jersey, for example, it is important to be familiar with the local situation. Many investments are made locally. The same applies to the political framework which is very much determined at local level,” says Peter Thagesen.
In the town of Allerød in North Zealand, Danish furniture manufacturer Fritz Hansen is also following the US election closely, especially because his company’s sales have grown by double-digit percentages in the American market in recent years.
Currently, the company sells designer furniture worth DKK 75 million – including the world-famous Egg chair – to the American market every year.
“We are seeing an American market in growth,” says Managing Director Jacob Holm, who has made himself comfortable in one of the designer armchairs in the former production hall in Allerød.
In his eyes, the vital thing is that the new American president should continue to ensure growth in the American economy as well as the recent positive developments in the housing market.
“When the Americans have confidence in their economy and buy and sell houses, this has a positive impact on Fritz Hansen. Of course, it is when the Americans move house that they are interested in buying new furniture,” he says.
It is clear that the next president will be able indirectly to affect our way of doing business in the United States.