US Firms Face Ongoing Cost Woes

The US Democratic win is unlikely to ease firms' cost and tariff woes in the near term, according to executives. Democrats seized control of both the Senate and House of Representatives on November 4, but businesses are still struggling with higher costs of energy and raw materials, as well as a stretched US consumer.

Global companies are welcoming the prospect of political stability, with Roland Welzbacher, CFO of Continental, saying that the company needs political stability and a reliable economic framework. However, it is too early to know what the results mean for issues like tariffs and energy prices.

The White House may face greater pressure to avoid a return to trade wars, but the administration's tariff agenda was largely pursued through executive authorities that do not require congressional approval. This means that any changes to tariffs would require significant political effort. Andrew Adair, trade policy adviser for North America at VDMA, said that Congress could seek to roll back existing tariffs, but such legislation would face major political hurdles.

## Why it matters The ongoing cost and tariff woes for US firms have significant implications for the global economy. With the US consumer already stretched, higher costs of energy and raw materials could lead to decreased consumer confidence and spending. The election outcome could also have broad implications for the US fiscal outlook, as well as sectors such as defence, healthcare, and banking.

The prospect of political stability is a welcome change for global companies, but it may not be enough to alleviate the current cost and tariff pressures. As the new Congress begins to take shape, businesses will be watching closely to see how the administration's policies evolve and how they will impact the economy.