Date: 18 Jan 2018, 8:30 - 11:00
Host: Danske Bank, Kuppelsalen, Laksegade 10, 1063 København K
Thanks to those who attended our annual US political and economic update at Danske Bank!
We had a great analysis from each of the speakers from Danske Bank, Kongressen.com and Maersk, as well as ample time for questions and discussion.
Mikael Olai Milhøj, Senior Analyst, Danske Bank, covered how business optimism surged after the Trump victory and looks to be holding strong, with the promise of tax reform and deregulation. Growth is expected to continue due to private consumption and business investment at least in the short term. Lower corporate tax rates and the possibility to deduct investment costs should drive growth but that will be financed through a much higher US government deficit. This deficit-financed expansion could overheat the economy, and Mikael believes that focus should instead have been on productivity growth, which is a problem for most Western economies. He covered also the importance of the relations between Trump, China and North Korea, as well as the threat of the US resigning from NAFTA and the likely negative impact that would have on US supply chains which rely especially on Mexico. His key points are summarized below and his final message was not to overestimate the impact that politics can have on the economy, since it takes a lot to be able to deliver on promises!
Our second speaker was Anders Agner Pedersen, Journalist and Author, Editor Kongressen.com, and he gave his view of the politics around what has made the tax reform possible, followed by comments on various scenarios for the outcome of the November 2018 mid term elections as well as implications for the 2020 Presidential election. There seems to be very little chance of the Democrats collaborating, and negative twists to the US legislative process (for example the Tax Reform approval), and these are just a few examples of why we see record-low approval of the American people for Congress (around 14%!). The rising lack of trust in traditional American institutions including the government as well as media is really concerning. The ideal situation would be if Congress split 1/2 Democratic 1/2 Republican and were forced to work together for the best of the country, but Anders expresses that more as a hope than a likelihood.
Our final speaker after the break was Per Flink Iversen, Head of Trade Forecasting and Market Analysis, Strategic Intelligence, Maersk Transport & Logistics, who gave an excellent review of various scenarios Maersk sees for global and US trade. Things look good in the short term for 2018, and US consumer confidence is growing, but consumption IS NOT growing and that is a risk sign. The system needs to see rising REAL WAGES to avoid the risk of recession in the longer term. Per also covered US trade policy actions expected (see photo below) and the global rise of nationalism, and is cautious therefore about whether the US will continue to see trade growth. His key points are summarized below.
A big thanks to Danske Bank for hosting this meeting!
Einar Dyrhauge, Executive Director Danish-American Business Forum and Tine Lundegaard, Senior Vice President and Head of Global Subsidiaries, Danske Bank
US economic outlook
Mikael Olai Milhøj, Senior Analyst, Danske Bank
How it’s going for the US economy, and where Danske Bank thinks the economy is heading in the next few years
US political processes
Anders Agner Pedersen, Journalist and Author, Editor Kongressen.com
The political climate in DC, the discussions between the parties and within the GOP. Perspectives of how DC will work in 2018 following the November midterm Elections
Coffee break and networking
Trade trends and the role of the US
Per Flink Iversen, Head of Trade Forecasting and Market Analysis, Strategic Intelligence, Maersk Transport & Logistics
A look at the US economy through its trade developments