‘Build Back Better’ vs. ‘Keepraf America Great’ Exploring the Impact of the 2020 Elections on International Companies

*Current as of October 14, 2020 The presidential election is not a national election – it’s 50 state elections. Popular Vote Winner in Each State Receives Electors’ Votes*

538 total electors, equal to the number of members of Congress in each state plus D.C.’s three electors, cast their votes for the president. 270 votes – over half of the electors – are needed to win.

*Maine and Nebraska allocate electoral votes based on the popular vote winner at the congressional district level and the state level.

Source: 270 to Win Accessed 10/5/20 Don’t wait up on election night. Expect Delayed Election Results in Battleground States State Mail Ballot Deadline Ballot Processing and Counting Michigan Ballots postmarked by the day before Mail ballots can be processed one Effective Election Election Day and received within 14 days day before Election Day and Date: Nov 17 after the election are eligible to be counted on Election Day *Biden +7.2 counted Pennsylvania Ballots postmarked by 8 p.m. on Election Mail ballots cannot be processed or Effective Election Day and received through the Friday counted until Election Day Date: Nov 6 after Election Day are eligible to be *Biden +7.0 counted Wisconsin Ballots postmarked by Election Day are Mail ballots cannot be processed or Effective Election eligible to be counted counted until Election Day Date: Nov 3 *Biden +6.3 North Carolina Ballots postmarked by Election Day and Mail ballots can be processed upon Effective Election received by Nov. 12 are eligible to be receipt but not counted until Date: Nov 12 counted Election Day *Biden +3.2 * Real Clear Politics Average as of 10/14/20 References: Deadline MI : PA : WI : NC : Processing and Counting WP : WSJ Expect Delayed Election Results in Battleground States State Mail Ballot Deadline Ballot Processing and Counting Florida Ballots received by 7 p.m. on Election Mail ballots can be processed and Effective Election Day are eligible to be counted counted 22 days before Election Date: Nov 3 Day *Biden +2.9 Minnesota Ballots postmarked by Election Day and Mail ballots can be processed upon Effective Election received by Nov. 10 are eligible to be receipt but not counted until after Date: Nov 10 counted polls close on Election Day *Biden +9.0 Arizona Ballots received by 7 p.m. on Election Mail ballots can be processed and Effective Election Day are eligible to be counted counted 14 days before Election Date: Nov 3 Day *Biden +2.7 Georgia Ballots received by 7 p.m. on Election Mail ballots can be processed upon Effective Election Day are eligible to be counted receipt but not counted until Date: Nov 3 Election Day *Trump +0.1 * Real Clear Politics Average as of 10/14/20 References: Deadline Time : WP : GA Processing and Counting FL : MN : AZ : AZ : GA Election 2020 Timeline

Dec. 11: Jan. 6: U.S. Congress Congressional meets in joint session to appropriations expire count electoral votes Oct. 15: Second Dec. 18: Final Presidential Debate Nov. 3: Nov. 16: House scheduled (Canceled on Oct. 9) Election Day returns congressional session

Oct. 7: First Vice Nov. 9: Senate Dec. 8: Electoral Dec. 23: Deadline Presidential Debate returns college deadline for the receipt of for resolving electors’ ballots Oct. 22: Third election disputes Jan. 20: Presidential Debate Dec. 14: Electors (3 U.S.C. § 5) Inauguration Day from each state meet and cast their ballots for president and vice president

Source: NCSL Whichever party wins the White House will likely control the Senate. Democrats Could Flip Senate With Three Seats + White House*

Democrats: 47 seats Republicans: 53 seats

 12 Democrat seats are up for election  23 Republican seats are up for election  10 seats are considered safe; 2  11 seats are considered safe; 12 seats are contested seats are contested  Of the 26 women in the Senate, 17  Of the 26 women in the Senate, 9 are are Democrats Republicans  2 Democratic women are on the  6 Republican women are on the ballot this year ballot this year  4 of these races are considered competitive

*The Vice President serves as President of the Senate Source: Cook Report accessed 10/14/20 and is responsible for the tie-breaking vote. Presidential Outcomes Influence Senate Races

Since 1992, incumbent senators have won… 97% 70% (126/130) (37/53) of races when the Presidential of races when the Presidential candidate of their party won their state candidate of their party lost their state

Of the 12 most competitive Senate races, over half are in states that favor Trump Likely+ Biden Lean Biden Toss Up Lean Trump Likely+ Trump Colorado (Gardner) Maine (Collins) Arizona (McSally) Georgia (Loeffler) Alabama (Jones) Michigan (Peters) Georgia (Perdue) Iowa (Ernst) North Carolina (Tillis) Montana (Daines) Alaska (Sullivan) South Carolina (Graham) Democrat Republican Source: Cook Report accessed 10/14/20 : UVA Center for Politics : H/T Mehlman Castagnetti House Unlikely to Flip

Democrats: 232 seats Republicans: 198 seats 1 Libertarian, 4 vacantseats

 Democrats hold 30 districts that  Republicans hold 7 districts that they Trump won in 2016 held by 2% or less in 2018  Republicans would need a net gain of 20 seats to win a majority Expect familiar policy landscapes in 2021. What a Potential Trump Administration Might Look Like Trump’s Proposed Second Term Policies

“Keep America Great”

Jobs • “Made in America” Tax Credits • Tax penalties for outsourcing Ending U.S. reliance on China • Tax credits for companies “bringing back jobs” from China • 100 percent expensing deductions for ‘essential’ industries bringing manufacturing back to the U.S. Corporate tax rate • Focus on extending provisions of TCJA expiring in 2022 and 2025

References: Taxes : China Trump’s Dealmaking Background

Trump views himself as a businessman, not a politician. Trump is the only U.S. president to have never held elected office or served in the military. Combined with his “Washington Outsider” political persona, President Trump has demonstrated a willingness to question conventional norms.

2018: Trump’s pressure on NATO allies to “pay their fair share” leads to an increase in allied countries’ contributions to the alliance. 2020: After two years of negotiations, Trump and Chinese Vice Premier Liu sign the Phase One trade agreement with China. 2020: Trump successfully negotiates the USMCA, a deal approved by bipartisan majorities in both Chambers of Congress.

If past is prologue, President Trump will continue to use his bellicose negotiation style to advance his “America First” economic policy agenda.

References: NATO : Phase One : USMCA Second Term Cabinet Turnover? Average tenure of Cabinet positions Current Cabinet terms In years, since 1993. In years

Commerce 2.5 3.6 Wilbur Ross

Treasury 3.0 3.7 Steven Mnuchin

Transportation 4.0 3.7 Elaine Chao

Energy 3.3 0.8 Dan Brouillette

Defense 2.9 1.2 Mark Esper

State 3.6 2.4 Mike Pompeo

Labor 4.2 1.0 Eugene Scalia

Attorney General 3.7 1.7 William Barr

0 1 2 3 4 Years What a Potential Biden Administration Might Look Like

Photo: Phil Roeder in Des Moines, Iowa Jan 4, 2020 via Flickr Accessed 9/28/2020 Biden’s Proposed Policies

“Build Back Better”

“Buy America” • “Made in America” $400 billion procurement investments • Bring back critical supply chains to the U.S. via Defense Production Act and other executive authorities Taxes • Increase the corporate income tax rate to 28 percent • Establish a minimum tax on book income Foreign influence in lobbying • Add requirements for foreign businesses seeking to lobby in the U.S.

Source: Made in America : Supply Chains : Taxes : Foreign Influence Biden’s Dealmaking Background

Biden was Vice President for eight years, but he was a Senator for 36. Biden’s success as a negotiator in the Obama Administration was built on his reputation for working with colleagues across the aisle during his tenure in the Senate.

2010: Biden and McConnell agree to extend Bush-era tax cuts for two more years. 2011: Biden and McConnell negotiate a compromise in the fight over the debt-ceiling to avoid a government default. 2012: Biden and McConnell strike a deal to make Bush tax cuts permanent and end the “fiscal cliff” crisis.

If past is prologue, expect a President Biden to utilize his relationships with congressional leaders to advance his agenda in a bipartisan manner.

Source: 2010 : 2011 : 2012 Known Key Players

Long-Time Political Advisors Prominent Black and Hispanic • Anita Dunn Leaders • Steve Ricchetti • Rep. Jim Clyburn • • Rep. • Ted Kaufman • Rep. Karen Bass • Valerie Biden Owens • Rep. Filemon Vela Former Staff • Rep. Tony Cárdenas Rep. Anthony Brown • • • Yohannes Abraham State and local elected officials • Jeff Zients • LA Mayor Eric Garcetti • Bruce Reed • Michigan Gov. Gretchen Whitmer Young Progressives • California Gov. Gavin Newsom • Atlanta Mayor Keisha Lance • Symone Sanders Bottoms • Gautam Raghavan

Source: Ogilvy Government Relations Potential Chief of Staff

Ron Klain Steve Ricchetti

• Former senior White House aide to President • Chairman of ’s 2020 election Obama responsible for implementing the campaign Recovery Act • Chief of Staff to VP Joe Biden (2013-2017) • Served as Chief of Staff to VP Joe Biden • WH Deputy Chief of Staff for Operations (2009-2011) and VP Al Gore (1995-1999) (1998-2001) • Associate Counsel to President Clinton in charge of judicial selection, won confirmation of Supreme Court Justice Ruth Bader Ginsburg • Chief Council to the U.S. Senate Committee on the Judiciary (1989-1992)

Source: Brownstein Hyatt Farber Schreck : Harvard Potential U.S. Trade Representative

Pete Buttigieg Tom Nides

• Mayer of South Bend, • Managing Director and Vice • Current U.S. Trade Indiana (2012- 2020) Chairman at Morgan Stanley Representative (2017 – • Former 2020 Presidential • Former Deputy Secretary of State, present) candidate appointed by President Obama • Former partner at Skadden • U.S. Navy Reserve (2009- (2011-2013) law firm 2017) • Served as Chief of Staff to U.S. Trade • Served as Deputy USTR for Representative President Ronald Reagan

• Fred Hochberg, Former U.S. Export-Import Bank chairman • Rhonda Schmidtlein, Member of U.S. International Trade Commission • Robert Holleyman, Former Deputy U.S. Trade Representative in the Obama administration • Rep. Jimmy Gomez (D-CA), Helped negotiate stronger labor provisions in USMCA • Beth Baltzan, Fellow at Open Markets Institute, Associate General Counsel at USTR (2003 - 2009) • Katherine Tai, Current trade counsel for House Ways & Means Democrats

Source: CNBC : Axios : FT : Brownstein Hyatt Farber Schreck : Potential Secretary of the Treasury

Elizabeth Warren Jamie Dimon Richard Cordray Lael Brainard

• U.S. Senator from MA • Chairman and • Democratic nominee • Member of the U.S. (2013 - present) CEO of for Governor of Ohio in 2018 JPMorgan Chase Federal • Former Presidential • Served as the Director of the Reserve's Board of candidate • Previously on the Consumer Financial Governors • Assistant to the President board of Protection Bureau (2012-2017) directors of the • Served as the U.S. & Special Advisor to the • Attorney General of Ohio Under Secretary of the Secretary of the Treasury Federal Reserve (2009-2011) Bank of NY Treasury for on the Consumer • Treasurer of Ohio (2007-2009) International Affairs & Financial Protection • Former Chair of • Treasurer of Franklin County, as Counselor to the Bureau (2010-2011) the Business Ohio (2002-2007) Secretary of the Roundtable • Law professor for over 30 • Solicitor General of Ohio Treasury (2009 -2013) years before her political (1993-1995) career Source: Brownstein Hyatt Farber Schreck : CNBC : Axios : Bloomberg Potential Secretary of Commerce

Rohit Chopra Susan Helper

• Commissioner on the Federal Trade • Professor of economics at Case Western Commission (2018 – present) Reserve University • Previously joined the Department of the • Chief Economist of the U.S. Department of Treasury to launch the Consumer Commerce (2013-2015) Financial Protection Bureau (CFPB) as • Senior Economist at the White House Council of Assistant Director Economic Advisers in the Obama • Appointed as the first Student Loan Administration (2012-2013) Ombudsman • Committee member of the National Academy of Sciences Panel on Manufacturing

Source: Brownstein Hyatt Farber Schreck Potential Economic Advisors

Council of Economic Advisors

•Jared Bernstein, Senior Fellow at the Center on Budget and Policy Priorities •Heather Boushey, President and CEO of the Washington Center for Equitable Growth •Jason Furman, American economist and professor at Harvard University; served as chair of the Council of Economic Advisers (2013-2017)

National Economic Council

• Lael Brainard, member of the U.S. Federal Reserve’s Board of Governors • Sarah Bloom Raskin, American attorney; formerly a member of the Board of Governors of the Federal Reserve System and a former United States Deputy Secretary of the Treasury • Larry Summers, American economist; former director of the National Economic Council for President Obama

Source: Brownstein Hyatt Farber Schreck : CNBC Trade Policy Outlook

Trump Biden Buy Buy American Buy American American • Tax credits for reshoring jobs from China and expensing • $400 billion procurement investments for “Made in America” deductions for reshoring manufacturing jobs including pharmaceuticals, products in telecom and AI • Will not issue federal contracts to companies industries, clean energy products and building materials outsourcing jobs to China • Update international trade rules on government procurement • Tax benefit claw-back provision for companies outsourcing jobs China Further decoupling with China Preference for multilateralism in countering China • Continue to maintain status quo on Phase One deal, • "Hands may be tied" on removing tariffs but unlikely to pursue Phase Two deal Trade Completion of a U.S.-U.K. trade deal Free Trade Agreements will take a “backseat” Agreements • Seek TPA renewal • TPA renewal is not a priority • Open to pursuing trade agreement with the EU • U.S.-U.K. trade deal negotiations may be paused • Trade agreements: Kenya, potentially • Will end U.S.-EU trade war • Mini-deals with India, Brazil; Phase Two deal with Japan DST Retaliation on Digital Services Taxes Restart OECD negotiations on Digital Services Taxes Retaliation • Completion of Section 301 investigations • Completion of Section 301 investigations WTO Continued pressure for WTO reform Potential WTO reform

Additional Potentially politicized M&A reviews Take a “tougher tone” and “meaningful punishments” in foreign Policies policy

Source: Linked above : H/T Akin Gump The struggle for party control is also underway in state governments. Key Governor and State Legislative Elections

11 states are holding gubernatorial races this year. Montana is the only state considered a toss-up.

Here are the states where legislative control of a chamber may flip:

State Senate Chambers to Watch State House Chambers to Watch Arizona Arizona Michigan Colorado Alaska* North Carolina Minnesota Florida Pennsylvania North Carolina Iowa Texas Currently Democratic Currently Republican *A bipartisan coalition currently controls the Alaska House Source: MultiState Implications What GA Teams Can Do to Prepare

Communicate the Likelihood of Delayed Election Results NOW • Those less familiar with the U.S. political system may mistakenly view delayed results as system failure. Recounts should only reinforce confidence in the system. The U.S. election process is well established, and Internally every action will be highly scrutinized. • Use the increased attention to showcase the importance of your GA mission by providing regular company-wide perspective throughout the various stages of the election process.

Don’t Go Silent During the “Chaos” • Look for opportunities in the must-do congressional “Lame Duck” action items (e.g. Appropriations, COVID Externally relief, tax extenders, etc.). • Communicate the importance of global connections with policymakers. • Reinforce your company’s activity in combating the pandemic and propelling economic recovery.

Prepare for Next Year’s Known Policy Agenda • Prepare your company for the issues likely to dominate the policy agenda in Q1-Q2 of 2021 (e.g. COVID, economic recovery, China decoupling, etc.) Prep for 2021 • State governments will be aggressively seeking revenue next year so remain plugged in to GBA’s state working groups. • Ensure your GA team is well-resourced for next year’s challenging policy environment, which will likely be challenging regardless of the election outcomes. Additional Resources Resources

Electoral College Battleground States Election Outlook Races to Watch State Elections

USA.gov: Presidential POLITICO: State of Mehlman Bloomberg MultiState: 2020 Election Process the Race Castagnetti: What Government: State Elections to Expect in the 2020 2020 Election Coverage Elections Outlook

This resource POLITICO provides a This analysis, This presentation MultiState breaks provides more deep dive into the produced by dives into the down state information on the political divides Mehlman balance of power governor and mechanics of the within each of this Castagnetti, outlook in the House legislature races in electoral college year’s eight provides a data- and Senate and key this pre-election and the presidential battleground states. driven look at races to watch in briefing deck. election process. historical trends, top this election. issues and the foreseeable failures ahead in the 2020 election. About GBA As the premier voice of international companies in the United States, the Global Business Alliance (GBA) actively promotes and defends an open economy that welcomes international companies to invest in America. Our members are American companies with global heritage and an indispensable part of our nation’s economic success. When America is open for business, we all benefit.