Donald Trump’s tax cuts will accelerate the exodus of British companies to the United States, a leading trade group has warned, potentially dealing a fresh blow to the London Stock Exchange.
Duncan Edwards, the chief executive of BritishAmerican Business (BAB), said the US president’s pledge to slash corporation tax will encourage even more UK-listed businesses to shift their operations to America.
He said: “As companies are thinking about whether to increase their exposure in the US from an operating perspective, I think that will also include looking at where they’re listed.
“It gives me no pleasure to say it, but there is a real risk that you get some UK champions relocating their listings.
“It’s tax and the size and attractiveness of the market. The size of the equity pool in the US is so vast that a change of listing might mean a change in valuation.”
The prospect of further exits from the Square Mile will pile pressure on the London Stock Exchange, which last year suffered its biggest exodus of companies since the financial crisis.
This momentum could also continue through 2025, as mining giant Glencore said last month it was considering shifting its London listing to New York.
Mr Trump has vowed to cut America’s corporation tax rate from 21pc to 15pc for companies that make their products in the US, which would be far lower than the 25pc rate in Britain.
It is part of a package of measures designed to push companies to relocate operations to the US, where they would also be able to escape new tariffs on various imports.
Mr Edwards said every company that has a major sales market in the US is assessing whether it will make sense for them to move operations to America.
“Everyone is looking at it, everyone is doing the evaluation, and it is a pretty good market, so I think the instinct will be to do more here anyway,” he said.
Meanwhile, Britain’s luxury industry has warned over the risks of a trade war on their businesses.
Bosses are concerned that recognisable companies in the sector, including Burberry and Mulberry, could become a target for potential tariffs if Mr Trump wants to “make a point”.
Currently, Britain exports £56bn of luxury goods every year, with about 24pc heading to North America.
Writing to the Chancellor this month, Helen Brocklebank, the chief executive of industry group Walpole, said bosses were concerned over the “increasingly challenging international trade landscape”.
She said: “The threat of tariffs and the increase in other non-tariff barriers to trade means that brands have to run to stand still.”
