Blazing the Trail in the Robust American Market: Insights for UK Startups and Venture-Backed Firms
Seizing Opportunities in Trump-Era Economics: A Timely Move for UK Start-ups
As we approach the 1,000-day mark of the current political term, we find ourselves in a phase not too far from "Peak Trump" in US politics. Yet, by mid-September 2026, the unavoidable tide of change will be upon us. Over the next 500 days, Congress will decide on historic tax cuts, the Administration will tackle tariffs and trade policies, and the President will reshape the Fed Board, each decisive event impacting businesses worldwide.
Patience among tech communities in both the US and Europe has been pushed to its limits. The latest clash between Amazon and the White House epitomizes the deteriorating bonds between the tech sector and the present administration. Still, despite this tension, the tech community can believe that tax adjustments later this year will advantage them, provided exemptions from tariffs can be negotiated. A return to calmer business conditions akin to 'Liberation Day,' on 2nd April, could be on the horizon.
Rollercoaster Stock Markets
Trump's tariffs plunged the stock market by 7.2% in his first 100 days, leaving Wall Street investors in disarray. It's not just the stock market feeling the pinch; private equity and venture capital investments have also been affected by President Trump's economic upheaval. Institutions like Yale are opting to sell as much as $6bn of private equity investments on the secondary market. Despite this institutional shift, individual investors remain interested in diversifying their investments into the private sector.
The flurry of change presents an opportunity for the Trump administration to mend relationships and rebuild strong ties with the venture capital and private equity communities, but their support hinges on the tax cut package Congress passes.
A Call to Action for Entrepreneurs
Early-stage companies backed by venture capital or seeking US venture capital have little time to waste. Bold and daring action is the order of the day. US markets have proven to be remarkably resilient, with a minimal risk of prolonged recession. It may be expensive to operate within the US, but upcoming tax adjustments could make it even more appealing. Significant amounts of venture capital capital have their sights set on the UK, making it an appealing investment destination. If anything, short-term concerns about shifts in US economic policies may strengthen sentiment in this regard.
A somewhat limited US-UK Free Trade Accord would provide certain sectors with an unexpected edge. Many are watching from the sidelines; it's time for the UK to seize the opportunity, act with purpose, and secure a potential decisive first-mover advantage.
Tim Hames is a Senior Adviser at Treble Peak
[1] CIPFA, UK Tax Year 2025-26 Rates and Allowances: https://www.cipfa.org/insight-briefs/2021/uk-tax-year-2025-26-budget-summary
[2] US Chamber of Commerce, Analysis of Aspects of the Tax Cuts and Jobs Act: https://ustainblog.U.S.Chamber.com/2017/12/06/analysis-aspects-tax-cuts-and-jobs-act-part-1/
[3] UK Government, Capital Goods Scheme Review: https://www.gov.uk/government/publications/capital-goods-scheme-review/capital-goods-scheme-review---finance-bill-measure
[4] Financial Times, A Guide to Brexit: Trade: https://www.ft.com/content/d8e5ff88-f737-4f48-aefa-ff6283f1cc6d [5] GOV.UK, Dividend Allowance: https://www.gov.uk/guidance/income-tax-dividends-from-uk-resident-companies
- In the next 500 days, the economy, particularly markets like venture capital and private equity, will experience significant impact from historical tax cuts, tariff decisions, and changes at the Federal Reserve.
- Despite the current tension between the tech sector and the administration, the tech community can anticipate advantageous tax adjustments and potential exemptions from tariffs, which may lead to favorable business conditions reminiscent of 'Liberation Day.'
- The Trump administration could use the coming period to rebuild ties with venture capital and private equity communities, but their support will depend on the tax cut package Congress approves.
- With the minimal risk of a prolonged recession and possible tax adjustments, early-stage companies backed by venture capital or seeking US venture capital should take bold action, as the US market remains appealing for investment. Additionally, UK startups and firms could benefit from a US-UK Free Trade Accord, providing an edge in certain sectors, especially with the increasing interest of venture capital capital in the UK.
