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Donald Trump aims to entice CEOs with lucrative tax cuts while Biden wants to win them over by vowing to maintain stability

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Former President Donald Trump told an influential group of CEOs that he wants to further cut the corporate tax rate he lowered while in office, while President Joe Biden’s chief of staff separately told them that the Democratic incumbent’s emphasis on global alliances would help their businesses.

Both Trump, the presumptive Republican nominee, and Jeffrey Zients met behind closed doors on Thursday with the Business Roundtable in Washington, with Zients stepping in for Biden during the president’s meetings with Group of Seven leaders in Italy. The prominent group representing more than 200 CEOs just rolled out an effort to preserve the tax breaks for businesses that Trump signed into law in 2017.

Neither side commented publicly on what was said in the meeting, which comes as Biden and Trump head toward a 2020 rematch with sharply different views on taxes and the economy.

Trump said that he would like to cut the corporate tax rate by a percentage point to an even 20%, according to a person familiar with his remarks who insisted on anonymity to discuss the closed-door meeting. The former president focused his remarks on taxes, inflation and the need for more oil production, the person said.

Another person familiar with the conversations said Zients made the case that America’s global reputation and its independent institutions such as the Federal Reserve fostered the kind of trust worldwide that allowed U.S. capitalism to thrive. The statements were a jab at Trump’s camp, as the former president had previously hit allies with tariffs and sought greater control over Fed policies.

Zients said the post-pandemic economic recovery was possible in part because the Biden administration worked with businesses on issues such as supply chains, the person said. And he indicated to the CEOs that Trump’s pledges to deport millions of people and wage potential trade wars could drive up inflation. The person also insisted on anonymity to discuss details of the meeting, having not been authorized to do so publicly.

The Business Roundtable has made low taxes its top legislative priority. The group announced that it would spend at least $10 million on a campaign to keep the corporate tax rate at 21% as well as promote business-friendly changes to the U.S. tax code and push to extend tax incentives for research and development.

Part of the 2017 tax cuts that Trump signed into law while president is expiring after 2025, likely raising taxes for most U.S. households. That sets up a showdown between Democrats and Republicans about how to rewrite the tax code.

Leaders from both parties want to preserve the cuts for those making under $400,000. But some Trump backers want to expand the tax cuts, including for companies. Biden would like to raise the corporate rate to 28% and introduce higher taxes on the wealthy to fund programs for the middle class.

The Biden administration has also maintained that tax cuts should be paid for as part of a proposal, while the 2017 overhaul approved by Trump led to higher budget deficits as the promised growth did not materialize.

Recent economic research indicates that Trump’s corporate tax cuts did boost business investment, but not by enough for the additional growth needed to cover the cost of those tax cuts. The Congressional Budget Office estimates that a full extension of the expiring tax cuts would cost $4.9 trillion over 10 years, including additional interest on the debt. The federal government’s publicly held debt stands at nearly $27.6 trillion.

Business leaders argue that lower taxes make them more competitive globally. That enables them to hire more workers and invest in new technologies. This, in turn, would help boost growth.

BRT members from Cisco and Procter & Gamble told reporters Wednesday that higher rates would cause them to invest less in the U.S.

Jon Moeller, P&G’s CEO and board chairman, said a tax increase would likely be passed on to consumers in the form of higher prices, limit wage growth for employees and be borne by shareholders.

“Making the assumption that companies are big and strong and they can absorb this, that’s kind of naive in terms of what will actually happen,” Moeller said. “It’s a societal impact.”

Biden’s budget proposal would raise corporate taxes by nearly $2.2 trillion over 10 years. More than half of that new revenue would come from resetting the corporate tax rate at 28% — an increase, though still lower than the 35% rate Trump inherited.

Trump, meanwhile, has suggested that higher corporate taxes would ravage the nation itself.

“Biden wants to raise taxes on top of that and raise business taxes, which will lead to the destruction of your jobs and, you know what, ultimately it’s just going to lead to the destruction of the country,” Trump said at a rally in May.



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Trump falsely claims to have driven Biden from race in video, Daily Beast reports By Reuters

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(This story contains offensive language in paragraph 3)

By Jeff Mason

WASHINGTON (Reuters) – Republican Donald Trump falsely claimed to have driven Democratic President Joe Biden out of the White House race and disparaged Vice President Kamala Harris in a video published by the Daily Beast, which drew a sharp rebuke from the Biden campaign.

Former President Trump was filmed at one of his golf courses seeking plaudits for his debate against Biden, whose stumbling performance a week ago sparked calls from his fellow Democrats for him to step aside.

“He’s quitting the race … I got him out,” Trump says in the footage, published late Wednesday. He then disparages Harris, who sources say would likely take over from Biden as the Democratic presidential candidate if he were to pull out, saying, “She’s so bad, she’s so pathetic, she’s just so fucking bad.”

Biden, 81, told his campaign on Wednesday that he was still running. His campaign fired back at Trump, 78, in a statement.

“No, Donald. What is bad is taking away women’s rights; What is bad is losing an election and encouraging a violent mob to attack the Capitol; What is bad is assaulting women; What is bad is not paying your taxes,” spokesperson Sarafina Chitika said.

© Reuters. Former U.S. President and Republican presidential candidate Donald Trump holds a campaign event, in Chesapeake, Virginia, U.S. June 28, 2024. REUTERS/Brendan McDermid/File Photo

Trump’s campaign stood by his words, with co-campaign manager Chris LaCivita responding on X: “Nothing in this video is incorrect.”

Reuters verified the location of the video as Trump National Golf Club in Bedminster, New Jersey. The golf cart Trump is seen driving features the number one and a presidential seal; he has been seen driving the same cart before in file video from the course.





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Macron’s ‘irresponsible’ snap election casts shadow over Olympics

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Emmanuel Macron’s move to call snap elections has cast a shadow over the Paris Olympic Games, raising the possibility of political unrest and a far-right government in charge of the world’s biggest sporting event.

The far-right Rassemblement National (RN) is projected to become the biggest parliamentary party after the run-off vote on Sunday. While a hung parliament appears the most likely outcome, if the RN were to win a majority, its 28-year-old party chief Jordan Bardella could be prime minister when the Games open on July 26, with his team greeting top athletes and dignitaries from across the world.

The timing of Macron’s decision to dissolve parliament was “catastrophic for the Games”, said Pascal Boniface, head of Paris-based think-tank Iris and an expert on the politics of sport. “We are in the thickest of fog over the future.”

Pierre Rabadan, a senior official responsible for Olympics planning in the Paris mayoralty of Socialist Anne Hidalgo, told the Financial Times he was “stupefied” by Macron’s “irresponsible” decision.

While he said the main strategic decisions had already been made, the move had raised “pragmatic and operational questions”, including deploying mayoral staff and city police for both the elections and the Games.

“We had thought about all the possible scenarios, except for the dissolution of the Assembly,” added Rabadan, a former professional rugby player with Stade Français.

Security experts had already warned of big policing challenges for the opening ceremony, in which thousands of athletes will sail down the River Seine watched by around 300,000 spectators along the quays. Pressure on security services would further be aggravated if anti-RN protesters were to take to the streets, they said.

People gather at Republique to protest against the far-right which came out strongly ahead in first round legislative elections
Demonstrators in Paris protest against the far right after Rassemblement National came out ahead in a first-round vote © Louise Delmotte/AP

Rabadan said his main concern now was the image of France that a far-right government, with an anti-immigration and nativist policy platform, would present.

“The Games are about welcoming the entire world and showing that we are an open country,” Rabadan said. “That clearly goes completely against what the Rassemblement National wants.”

Hidalgo told France 2 on Tuesday that “the party would not be spoiled” by an RN government.

But dozens of athletes have voiced concerns about the elections. Prior to the first round, French football star and captain of the national team Kylian Mbappé called on the electorate to vote “against the extremists”, while almost 300 sportspeople, including Rabadan, signed a column in French sports publication L’Equipe opposing the RN.

“In my memory, I have never seen athletes engage to this extent in the political field,” said Boniface.

Macron’s sports minister Amélie Oudéa-Castera told journalists ahead of the first round that despite the extensive preparations for the Olympics, an RN majority would mean far-right politicians with no experience in national government would still have to make important decisions “in a geopolitical context that is difficult, delicate and tense”.

Bardella has said he would not change the officials running the Games.

Guy Drut, a former 110m hurdles Olympic champion and sports minister under President Jacques Chirac, and one of the few athletes to publicly back the RN campaign, told Le Monde: “There is no reason the Games would go badly under an RN government.”

Scattered protests were held against the RN after the first-round vote. Paris police commissioner Laurent Nuñez told France Inter that the authorities were ready for further unrest but that this would not interrupt the Games.

“We’re preparing for this type of protest and we will have an extremely large [presence] in the Greater Paris region of 45,000 officers to manage [disorder],” he said.

In a further potential risk to smooth running, four unions representing airport management staff have threatened to strike in pursuit of “a uniform and fair bonus” for working during the event. Police, air traffic controllers, rubbish collectors and train and bus staff have already been promised bonuses.

Despite his confidence that policing and organisation were well in hand, Rabadan lamented the impact of the elections on the build-up. “There is very, very strong enthusiasm and popular support,” he said. “But the president’s decision . . . has put a stop to that rise in excitement we were hoping for, so that’s really quite disappointing.”



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Hong Kong’s IPO market is set to improve over the next five years

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Hong Kong Exchanges and Clearing celebrates the 24th anniversary of its listing on June 21, 2024.

China News Service | China News Service | Getty Images

BEIJING — The market for initial public offerings in Hong Kong is set to improve significantly over the next five years, starting in the second half of this year, George Chan, global IPO leader at EY, told CNBC in an interview Wednesday.

“I think it will take a couple years to go back to the peak [in 2021] but the trend is there,” Chan said. “I can see the light at the end of the tunnel.”

High U.S. interest rates, regulatory scrutiny, slower economic growth and U.S.-China tensions have constrained Greater China IPOs in the last three years.

EY said in a report that while the volume of IPOs and proceeds in the U.S. increased significantly in the first half of 2024 compared to the same period a year ago, mainland China and Hong Kong saw a sharp decline in listings.

Many of the macro trends are now starting to turn around, which can support more IPOs in Hong Kong, said Chan, who is based in Shanghai.

“We are seeing a reversing trend,” he told CNBC. “We are seeing more of these [U.S. dollar] funds, they are moving back to Hong Kong. The main reason is that Hong Kong has already factored in these uncertainties.”

The Hang Seng Index is up more than 5% year-to-date after four straight years of decline — which was the worst such losing streak in the history of the index, according to Wind Information.

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“Our HK cap markets team is very busy and has a strong pipeline for H2.  We expect to see many HKSE listings,” Marcia Ellis, global co-chair of private equity practice at Morrison Foerster in Hong Kong, said in an email Wednesday.

Many companies that were waiting for a listing in mainland China’s A share market have decided to switch to one in Hong Kong, she said. “Previously [China Securities Regulatory Commission] approval was slowing things down but recently our team has gotten CSRC approvals pretty quickly.” 

In June, China issued new measures to promote venture capital, and authorities spoke publicly about supporting IPOs, especially in Hong Kong. Investors and analysts said they are now looking at the speed of IPO approvals for signs of a significant change.

Chan said another supportive factor for Hong Kong IPOs is that many of the companies listed in the market are based in mainland China, where economic growth is “quite satisfactory.”

He expects consumer companies could be among the near-term IPO beneficiaries.

“As the economy slowly recovers, a lot of people in China are willing to spend,” he said, noting that was especially the case in less developed parts of the country.

Official national-level data have showed that retail sales are growing more slowly in China — up by just 3.7% in May from a year ago versus growth of nearly 10% or more in prior years.

Also significant for global asset allocation, the U.S. Federal Reserve and other major central banks are pulling back from aggressive interest rate hikes. High rates have made Treasury bonds a more attractive investment for many institutions instead of IPOs.

“I would say if the interest rate can be further cut down, 1% maybe, that would have a significant effect on the IPO market,” Chan said.

Hong Kong IPOs raised $1.5 billion during the first half of the year, a 34% drop from a year ago, EY said in a report released late last month. Back in 2021 and 2020, the Hong Kong Stock Exchange saw nearly 100 or more IPOs a year raising tens of billions of dollars, according to the report.

In comparison, mainland China IPOs raised $4.6 billion in the first six months of 2024 — a drop of 85% from the year-ago period, according to EY.

HKEX CEO aims for more large-scale IPOs this year

Bonnie Chan, CEO of Hong Kong Exchanges and Clearing Limited, said during a conference last week that so far this year, the Hong Kong exchange has received 73 new listing applications — a 50% increase compared to the second half of last year. She is not related to EY’s George Chan.

“The pipeline is building up nicely,” she said, noting about 110 IPOs in total are in line for a Hong Kong listing. “All we need is a set of good market conditions so these things get to launch and price nicely,” she added.

Improving post-IPO performance

“What we need is a strong pipeline,” EY’s Chan said. “We need an interested investor with the money to invest, and we need a good aftermarket performance.”

Hong Kong IPO returns are improving. The average first-day return of new listings on the Hong Kong stock exchange in the first half of 2024 was 24%, far more than the average of 1% in the same period last year, according to EY.

“The aftermarket performance of Hong Kong IPOs has been doing quite good compared to the past five years,” Chan said. “These things added together are projecting an upward trend for the Hong Kong market [in the] next 5 years.”

Chan said he expects the number of deals to pick up in the second half of 2024.

Goldman Sachs says it remains positive on Hong Kong capital markets activity

He said those will likely be medium-sized — between 2 billion Hong Kong dollars to 5 billion Hong Kong dollars ($260 million to $640 million) — but added he expects better market momentum in 2025.

Slowing economic growth and geopolitical uncertainty have also weighed on early-stage investment into Chinese startups.

Total venture funding from foreign investors into Greater China deals plunged to $19 billion in 2023, down from $67 billion in 2021, according to Preqin, an alternative assets research firm.

U.S. investors have not participated in the largest deals in recent years, while investors from Greater China have remained involved, the firm said in a report last month.

U.S. IPO outlook

As for IPOs of China-based companies in the U.S., EY’s Chan said he expects current scrutiny on the listings to be “temporary,” although data security rules would remain a hurdle.

In early 2023, the China Securities Regulatory Commission formalized new rules that require domestic companies to comply with national security measures and the personal data protection law before going public overseas. A China-based company with more than 1 million users must pass Beijing’s cybersecurity review to list overseas.

“As time goes on, when people are more familiar with the Chinese [securities regulator] approval process and they are more become comfortable with geopolitical tensions, more of the large companies … would consider [the] U.S. market as their final destination,” Chan said.

“When the time comes I think the institutional investors would be interested in these sizeable Chinese companies, as they pretty much want to make money.”

He declined to comment on specific IPOs, and said certain high-profile listing plans are “isolated incidents.”

Chinese ride-hailing company Didi, which delisted from New York in 2021, has denied reports it plans to list in Hong Kong next year. Fast-fashion company Shein, which does most of its manufacturing in China, is trying to list in London following criticism in the U.S., according to a CNBC report.



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