As the U.S. braces for a new administration regardless of who wins the election, the future of tax and trade policy hangs in the balance, with Vice President Kamala Harris and former President Donald Trump offering starkly different visions.
Tax Policy: Harris vs. Trump
Vice President Harris’s tax policy proposals continue the Biden-Harris Administration’s framework, emphasizing higher taxes on corporations and international businesses to fund tax credits for lower-income and middle-class taxpayers, while proposing new policies to address challenges such as housing affordability or healthcare accessibility. Harris supports raising the corporate tax rate to 28 percent, the corporate Alternative Minimum Tax (AMT) to 21 percent and quadrupling the stock buyback excise tax. She also supports changes to U.S. international tax law that would raise significant revenue while bringing the U.S. into greater conformity with the OECD international tax framework, such as increasing the Global Intangible Low-Taxed Income (GILTI) tax rate from 10.5 percent to 21 percent and repealing the Foreign-Derived Intangible Income (FDII) regime. For individual taxpayers, Harris proposes higher marginal rates for high-income earners, higher taxes on capital gains and dividends and expanding the child tax credit and Earned Income Tax Credit (EITC).
In contrast, former President Trump’s tax policy centers on extending the expiring provisions of the Tax Cuts and Jobs Act (TCJA) of 2017. Trump aims to further reduce the corporate tax rate from 21 percent, proposing a lower rate of 15 percent for American manufacturing, and supports full deductibility of capital investments and R&D. While Trump has not taken a position on the details of the OECD international tax negotiations, he would likely follow Congressional Republicans’ criticism of major elements of the negotiations, including the Undertaxed Profits Rule (UTPR) and Pillar One provisions that target large U.S. tech companies in foreign markets. For individual taxpayers, Trump has proposed exempting tipped income, overtime pay and Social Security benefits from tax, although details are sparse. He also seeks to end the limit on the deduction for state and local taxes (SALT).
Trade Policy: Harris vs. Trump
Harris is likely to continue the Biden-Harris Administration’s worker-centric approach, emphasizing alliances with foreign nations and less reliance on tariffs. She has criticized Trump’s broad tariff proposals, labeling them as a national sales tax that would burden U.S. consumers. Still, she is not expected to roll back tariffs that were imposed on Chinese goods under Trump and retained by President Biden. Harris’s Senate record shows a focus on using trade agreements to address environmental issues, and she has pledged to renegotiate the U.S.-Mexico-Canada (USMCA) Agreement during the 2026 review process. Unlike the Biden administration, the business community hopes she will prioritize intellectual property protection and adopt a more accommodating stance on digital trade issues.
Trump’s trade policy remains aggressive and tariff-centric. He has promised to impose tariffs of 10-20 percent on all imported goods and 60 percent on Chinese imports. Trump has consistently criticized the U.S. trade deficit with China and other partners and is likely to use tariffs as leverage for new concessions. He has also vowed to renegotiate the USMCA and impose 100 percent tariffs on automotive exports from Mexico. The 2024 GOP platform includes revoking China’s Most Favored Nation (MFN) status and preventing China from buying U.S. land and industries. Trump is expected to use the same trade authorities as during his first term to impose tariffs on specific products or sectors.
The post-election tax and trade policy landscape will be shaped significantly by whether Harris or Trump prevails and will have profound implications for the U.S. economy and its global relationships.