US Election and Global Mobility l Mercer Australia

US Election and Global Mobility l Mercer Australia


Effects of the US Presidential Election on Global Mobility

The political climate of 2016 leaves many with questions on the future of the mobility landscape.

The United Kingdom voted in a referendum to leave the European Union on June 24, and on November 8, Donald Trump was elected the 45th President of the United States. In both elections, the voters were deciding between two very different and largely oppositional outcomes. The majority of polls leading up to these elections did not reflect the ultimate outcomes. In both cases, the polls set the expectation that the policies and directions of these two countries following the election would continue along the same basic path while the results of these elections left many uncertain of what the future holds.

The full impact of the US presidential election won’t be known for some time but could have significant consequences for international trade and immigration. Changes in these areas, in turn, could have a profound effect on mobility programs.

President-elect Trump has his “100-Day Plan” – his basic guide which is his commitment to the American people on the events that will take place in the first 100 days of his presidency. He will likely issue some executive orders that could have impacts in this initial period, but he must work with the US Congress to enact a majority of the provisions outlined in his plan. Any legislative changes will likely extend past his first hundred days and may meet some challenges or have significant changes. For example, the last time the US went through a major tax simplification initiative it took nearly four years from the time the idea was introduced until the final bill was signed into law – and the law was significantly different from the initial idea of tax simplification.

The 100-day plan that has been laid out provides a dramatic shift in the direction of US policies, specifically on how the US will deal with other countries on trade and immigration issues.

Impact on Mobility

The largest impact on mobility from enactment of these proposed programs is in trade. The full effect any change in trade policies will have on business and specifically mobility is uncertain. Businesses could be affected in a variety of ways with the potential for positive and/or negative consequences. The impact in the US will depend upon what programs are actually enacted rather than how the programs will be enacted.

Enacting the recommended changes in the 100-day plan to the current trade agreements could have a significant impact on mobility with the types of assignments we currently see and the cost of benefits provided. Trade restrictions could have the desired result of companies moving operations to the US, meaning more mobility to and within the US. It could also result in alienating trading partners and closing facilities in foreign locations resulting in higher transfers from countries outside of the US to other foreign locations.

Trade restrictions may also have a profound effect on the price of goods. Trade restrictions generally create a lower supply of imports and if tariffs are imposed, at higher costs, increasing the overall prices in the US. Similarly, if the US imposes restrictions or tariffs, other countries may do so in retaliation, increasing the cost of US goods abroad. With the potential for increased price volatility, monitoring the cost of living and its impact on employees will be even more critical.

Some proposed policies would benefit certain industries, such as energy. Reduced regulation may increase the ability to do business, increasing supplies and resulting in a reduction in the prices of energy and energy related products. The enactment of these policies may increase mobility for these industries both domestically and internationally. Policies concerning certain projects for improving the infrastructure would benefit the construction industry in certain areas, increasing the need for skilled workers in the construction sector and creating movement of skilled labor into these locations.

Exchange Rates

There is speculation that interest rates will increase in the near future and that will generally encourage foreign investment in the US, increasing the flow of money into the US. Increased demand for US investments will strengthen the US dollar against foreign currencies. The strengthening of the US dollar would affect the cost of corporate mobility programs, making assignments into the US more expensive and assignments out less expensive. US expatriates could see assignment-related allowances decrease as fewer US dollars are required to make purchases in the foreign location, while allowances for assignees into the US will increase as the US dollar becomes more expensive relative to their home currency.

Cost of Mobility

The proposed change in US tax laws could also have a profound effect on the overall cost of mobility programs. The elimination of US tax incentives for mobility could significantly increase the cost of mobility programs. Lowering the tax rates, as proposed, will require the elimination of certain tax incentives, primarily exclusions, deductions, and credits. The elimination of incentives that benefit mobility could result in significant increase in the cost of mobility programs. The elimination or reduction in benefits such as the deduction for moving expenses, the foreign earned income exclusion, the home sale exclusion or tax protected home sale transactions would result in significantly higher costs for assignees and for mobility programs. Depending on the specific changes that are ultimately enacted, the result could significantly increase the tax cost for mobility.


President Trump’s executive order temporarily suspending entry into the United States for individuals from seven predominantly Muslim countries may have profound and unforeseen impact on Mercer’s multinational clients. We’d like to share an advisory on the subject we received from legal experts at Baker McKenzie. 

Mercer will continue to monitor the situation and its impact on our clients’ mobility programs. Please contact your Mercer consultant if you have any questions or if you would like to discuss further.

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