US presidential candidates’ abandonment of free trade is a concern for all of us, says ALEX BRUMMER

Pocketbook issues have historically been a defining issue in American elections. Donald Trump’s narcissism, propensity for autocracy and overt racism have tipped the needles against him.

In terms of personality, Democratic candidate Kamala Harris outshone Trump in what may be the only televised debate in the run-up to November 5.

She showed great skill in debunking Trump’s outlandish claims and irritating the former president.

But Trump, with his supply-side tax cut program and mercantilist trade views, may have the economic edge over Harris.

The financial costs of his policies seem daunting, but unlike in Britain, where voters are more willing to accept higher taxes to pay for better public services, working people in the US prefer to hold on to their wages.

They are also less bitter about wealth and admire success, believing that one day they too can become rich.

Whoever inherits the White House next year will do so knowing that the Federal Reserve, the US central bank, has done its job. The latest consumer price figures show that inflation, at 2.5%, is not far from the target.

Core inflation rose largely because of house prices. That shouldn’t stop the Fed from cutting rates by at least a quarter point this month amid concerns that manufacturing momentum is being lost.

Trump is obsessed with growth and, unlike Labour in Britain, will let nothing stand in its way. He is determined to oust any future administration of Federal Reserve Chairman Jay Powell, whom he appointed, when his term ends in 2026. He is threatening to curb the Fed’s powers that undermine its independence.

The core of his policy is lower income and corporate taxes. He has promised to extend his 2017 tax cuts for Americans who are earners, which lowered the top income tax rate from nearly 40% to 37%.

During his time in office, Trump cut the corporate tax rate from 35% to 21% and now he’s targeting 15%.

In contrast, Harris would shield households earning $400,000 (£307,000) a year – a high amount by British standards – from tax rises, but would let Trump’s relief for the wealthy expire.

There would be a levy on the super-rich, defined as households worth $100m (£76.7m) – a high bar. Corporate taxes could be in the firing line.

If Trump were elected, free trade and globalization would take a huge hit.

He would expand the tariff net on China, by imposing a 60% tax on all goods. But he also talks about a 10% to 20% tariff on the rest of the world. That doesn’t bode well for a free trade agreement with the UK.

It would also be a stealth tax on consumers and businesses if price increases were passed on rather than absorbed.

There is a clear distinction between the Republicans’ supply-side tax cuts and Harris’ willingness to raise taxes to pay for public services and environmental activist support.

Models show the deficit and debt rising under Trump, benefiting from the extreme privilege of the dollar still being the world’s reserve currency. Harris, taking a cue from Bill Clinton, is more fiscally conservative. The loss of commitment to free trade by both candidates is worrying.

No one talks about the Smoot-Hawley-style tariffs that sparked the Great Depression of the 1930s.

Despite this, there are trade barriers similar to those erected against cheap Chinese exports of electric cars.

If it were applied in a more universal way, it could make our lives miserable.

Scottish fog

Scotch whisky is one of Britain’s largest exports.

It is therefore worrying that the value of exported Scotch whisky fell by 18 per cent in the first half of this year to £2.1 billion.

Sales abroad were 36 bottles per second, up from 40 in the first half of last year. Business has not been helped by the 2019-2021 trade war with the US, its biggest market, which has seen single malts’ market share plummet.

It has never fully recovered. One of Keir Starmer’s election promises was to ‘support Scotch producers to the hilt’. The industry is pushing for the scrapping of a 10.1% increase in import duties imposed in August 2023.

After the winter fuel surcharge fiasco, you no longer have to worry.