Presidential candidates’ abandonment of free commerce ought to fear us all

Pocketbook issues, historically, have been a decisive issue in American elections. Donald Trump’s narcissism, tendency for autocracy and overt racism have moved the dials against him.

In sheer personality terms, the Democrat candidate Kamala Harris outperformed Trump in what may prove to be the only televised debate in the run-up to November 5.

She showed real skill in deflecting Trump’s more bizarre claims and irritating the former president.

Models show deficit and debt surging under Trump, taking advantage of the extreme privilege of the dollar still being the world’s reserve currency. Harris, taking a leaf from Bill Clinton, is more fiscally conservative.

But Trump, with his supply-side tax cutting agenda and mercantilist trade views, may have the economic better of Harris.

The fiscal cost of his policies appear startling, but unlike Britain, where voters are more willing to accept higher taxation to pay for better public services, working people in the US much prefer to hang on to their wages.

They also are less resentful of wealth and admiring of success, thinking that one day they could be rich too.

Whoever inherits the White House next year will do so with the knowledge that the Federal Reserve, the US central bank, has done its job. The latest consumer prices figures show headline inflation not far off target at 2.5pc.

Core inflation picked up largely due to housing costs. This should not stop the Fed cutting interest rates by at least a quarter-point this month amid concerns that output momentum is being lost.

Trump is obsessed with growth and, unlike Labour in Britain, doesn’t want anything getting in the way. He is committed to ridding any future administration of Federal Reserve chairman Jay Powell, who he appointed, when his term expires in 2026. He threatens to curb the Fed’s power undermining independence.

At the core of his policy is lower income and company taxes. He has pledged to renew his 2017 tax reductions for America’s strivers, which saw the top rate of income tax drop from near 40pc to 37pc.

In office, Trump cut company taxes from 35pc to 21pc and is now aiming for 15pc.

In contrast, Harris would protect households earning $400,000 (£307,000) a year – a high figure by UK standards – from tax increases. But she would allow Trump reliefs for the wealthy to expire.

There would be a levy on the super-rich defined as households worth $100m (£76.7m) – a high bar. Company taxes could be in the firing line.

Free trade and globalisation would take a bath if Trump were elected.

He would broaden the tariff net on China, imposing a 60pc tax on all goods. But he also talks of a 10pc to 20pc tariff on the rest of the world. That doesn’t augur well for a UK free trade agreement.

It would also be back-door levy on consumers and businesses should price rises be passed through rather than absorbed.

There is clear blue water between Republican supply-side tax cuts and Harris’s willingness to allow taxes to rise to pay for public services and activist support for the environment.

Models show deficit and debt surging under Trump, taking advantage of the extreme privilege of the dollar still being the world’s reserve currency. Harris, taking a leaf from Bill Clinton, is more fiscally conservative. The loss of commitment by both candidates to free trade is a worry.

No one is talking about Smoot-Hawley style tariffs of the kind which helped trigger the Great Depression of the 1930s.

Nevertheless, tit-for-tat trade barriers, of the kind being deployed against Chinese cheap exports of electric cars.

If more universally applied, it could make all our lives a misery.

Scotch mist 

Famously, Scotch whisky is among Britain’s biggest cash exports.

So it is disturbing that the value of exported Scotch plummeted by 18pc to £2.1bn in the first half of this year.

There were 36 bottles of whisky per second sold overseas, against 40 in the first half of last year. Matters are not helped by the 2019-21 trade dispute with the US, the biggest outlet, which saw the market share of single malts plummet.

It has never fully recovered. Among Keir Starmer’s election promises was to ‘back Scotch producers to the hilt’. The industry is pressing for a removal of a 10.1pc rise in duty imposed in August 2023.

After the winter fuel allowance fiasco, don’t hold your breath.