Why UK start-ups should act now to capitalise on Trump-era economics
Despite short-term volatility from Trump-era economic policies, bold UK startups and venture-backed firms should capitalise on impending tax reforms and US-UK trade opportunities to gain a first-mover advantage in the resilient American market, says Tim Hames
With more than 1,000 days left of his term, we are currently at something akin to “Peak Trump” in relation to the US political process, however, by mid-September 2026, an unavoidable element of decline will be clear. The next 500 days will make or break domestic and international economic policy. In that time and in approximately this order, Congress will either legislate for (or not) what could be the largest tax cutting package in US history. The Administration will reach a settled state of sorts on tariffs and trade policy, whether in mid-July where the current 90-day breathing space runs out, or following a further extension. Finally, almost certainly in May 2026, the President will have the chance to reshape the direction of the Federal Reserve Board when Jerome Powell, not much loved in the White House, will stand down as Chairman. These are matters that will be crucial to businesses in not only the US but globally.
Patience amongst the tech community in both the US and Europe has been wearing thin of late. From prime position at President Trump’s inauguration to ‘hostile and political acts’, the recent clash between Amazon and the White House exemplifies the fraying alliance between the tech world and the Trump administration. Despite this, the tech community in both the US and Europe still has reason to think that tax changes later this year will be advantageous to them. If they can extract exemptions on tariffs then business conditions will be calmer than they have been since ‘Liberation Day’ on 2nd April.
Plummeting stock markets
Trump’s tariffs have caused the stock markets to plummet 7.2 per cent in his first 100 days and caught Wall Street investors, who anticipated a market boom under a tax-cutting, red tape cutting Republican administration, off guard. It isn’t just the stock market which has been upturned, private equity and venture capital is another burgeoning relationship dashed by President Trump’s recent economic upheaval. Investors are looking to diversify away from the asset class: academic institutions such as Yale look to sell as much as $6bn of private equity investments on the secondary market. Despite the institutional change in attitude, we have seen an appetite from individual investors looking to diversify their investments and venture into the private market. Sentiment is still in flux providing the opportunity for the Trump administration to rebuild a strong relationship, however, support for Trump from the venture capital and private equity ecosystem hinges on what tax cut package Congress enacts.
This is all very well, it could be said, but what does it mean for those at the sharpest of sharp ends, early-stage companies either backed by venture capital or seeking US venture capital? These sorts of entrepreneurs do not have 500 days in which to make an assessment. They may well need to make a call in less than 100 days. What should these founders and leaders do?
They should be bold and brave and disregard the Trump turbulence. The American economy is extraordinarily resilient. It is highly unlikely to enter anything akin to a prolonged recession, it remains a massive market that is welcoming to innovators. It can be expensive to operate in, but forthcoming tax changes may make it yet more appealing. There is a wall of US venture capital cash that sees the UK as an attractive destination. If anything, short-term concern about where Trumponomics is taking the US economy may strengthen sentiment in this regard. Even a quite limited US-UK Free Trade Accord would afford certain sectors an unanticipated edge. A lot of people are sitting on their hands. Nobody has ever built a great business just by waiting. Now is actually the moment for the UK to seize and secure a potentially decisive first mover advantage.
Tim Hames is senior adviser to Treble Peak