Trump vs Harris: What each candidate’s election would mean for Cyprus according to AmCham

"As AmCham Cyprus, it is our strong belief that the institutional foundations of our economic partnership with the US will not to be affected by the outcome of the US elections," Pantelis Pantelides, Executive Director, American Chamber of Commerce in Cyprus (AmCham Cyprus,) suggests.

Responding to CBN's request for AmCham's take on the potential impact on Cyprus' economy and business scene depending on who wins the 5 November elections, Pantelides pointed out, "Tangible efforts from Cyprus, such as the important initiative to institutionalize a foreign direct investment screening mechanism, in compliance with the EU Foreign Direct Investment Regulation, is already recognised by the US, regardless of the election outcome."

Pantelis Pantelides, Executive Director, AmCham

Speaking on behalf of AmCham Cyprus, Pantelides continued, "We are also of the view that the strategic dialogue between the two nations will continue irrespective of the election outcome. In addition to strengthening political, economic and social ties, this dialogue is expected to bring multiple and multi-layered benefits and to further strengthen the significant prospects for further advancing the co-operation between Nicosia and Washington in vital areas, such as Energy, research and technology, security, attraction of investments and trade."

"For example," he went on to note, "there is a joint commitment to promoting and deepening cooperation on research, technology, and innovation, promoting an exchange program for capacity building in emerging technologies, opportunities for building AI cloud data centers powered by clean energy and the establishment of a regional Maritime Cybersecurity Center of Excellence in Cyprus."

Equally important in fully unlocking the untapped potential between the two countries, Pantelides underlined, is the full implementation of the ongoing Integrated Action Plan on Economic Diplomacy, under the coordination of the Ministry of Foreign Affairs and the United States Embassy in Nicosia.

"In a nutshell, we do believe that the current upward trend in our economic, investment and trade partnership is not to be affected by the election outcome. This is due to the solid institutional framework which has been firmly established and is most likely to continue, also considering that Cyprus has proven a highly reliable partner of the US in a region of great geopolitical importance," he said.

Wider implications of the US Elections’ outcome on Cyprus’ economy and business scene

Pantelides then went into further detail on the potential impact depending on the outcome of the elections, pointing out, "as an EU member-state in a globalised World, the major concern that arises for Cyprus as regards the elections is the direction that the US will choose in foreign and economic policy and its wide-ranging implications on the international economy, trade negotiations and the stability of the global market."

The likely consequences of Trump’s re-election

"For example," Pantelides continued, "if former President Trump is to be re-elected, his proposed 10% tariff on all imports could harm Europe’s export – led sectors. So, there is a real risk of increased competition between the EU and the US, with each side likely to respond to tariffs imposed by the other with protectionist policies. In addition, the EU would also most likely try to diversify and secure trade agreements with other partners such as Mercosur (Latin America) and India. This effect would likely be exacerbated if the dollar were to strengthen significantly against the euro as a result of trade tariffs.

Although the service sector would likely feel less of a direct impact than the goods sectors under a tariff regime, any retaliatory measures or escalation of trade barriers could disrupt sectors like finance, tourism and professional services, which are critical to our economy.

It is also expected that Trump will proceed with corporate tax cuts and maintaining high budget deficits, which, in combination with imposing high trade tariffs, would lead to higher interest rates and elevated inflation which will also have worldwide repercussions."

Stable landscape if Harris wins

Pantelides went on to note, "Harris is not expected to follow a policy that will strengthen de-globalisation trends or increase competition with trade allies such as the EU. She is most likely to continue the current trade policies which could prove less disruptive for the EU, as they would keep risks to economic growth in Europe at bay, providing a more favourable environment for investment attraction.

However, what Harris holds common with Trump is that she will adopt a policy of maintaining a high public debt, albeit adopting different policies from her competitor, with the IMF having already warned that loose fiscal policy in the US exerts upward pressure on global interest rates and the dollar, pushing up funding costs in the rest of the world and thereby exacerbating existing fragilities and risks."

US – Cyprus ties closer than ever before

The American Chamber of Commerce in Cyprus (AmCham Cyprus) has always been at the forefront of Cyprus’ continuous efforts to enhance relations with the United States, Pantelides also told CBN.

"We are very pleased to observe that the collective efforts of the public and private sector have borne fruit, since the ties between Cyprus and the US have never been stronger. The close ties of our two nations are far from merely theoretical, with a multitude of tangible deliverables now unfolding on a number of fronts. These, amongst others, include the institutionalization of a Strategic Dialogue between the Republic of Cyprus and the United States and, of course, the recent historic visit of President Christodoulides to the Oval House," he said.

The closer ties in numbers

"Our upgraded partnership," Pantelides went on to underline, "is also reflected in the increased economic, trade and financial interchanges, as per the latest statistical data: In 2022, US Foreign Direct Investments in Cyprus were $10.4 billion, goods exports amounted to $123 million and services exports reached $1.1 billion. During the same year, Cyprus’ Foreign Direct Investments in the US were $433 million, goods exports stood at $73 million and services exports reached $2.1 billion.

This enhanced picture is attributable in part to the attraction of significant US investments in many sectors of the Cypriot economy, such as Energy, Technology, Healthcare, Transportation, Real Estate and Renewable Energy."

Increased momentum of US Investments into Cyprus

Cyprus’ reliability as a credible partner to the US could in fact give rise to an increased momentum for further American investments in major infrastructure projects with potential, AmCham's Executive Director underlined. These include the Great Sea Interconnector and the privatization of the port of Larnaca, both discussed during President Christodoulides’s recent visit to the White House.

And, of course, this trend can be further boosted by a set of other actions, such as:

• the inclusion of Cyprus in the US Visa Waiver Program which is near to be finalised,
• updating the double tax treaty between Cyprus and the US, which has now been in force for over 40 years,
• expanding educational opportunities and cultural exchanges,
• improving air connectivity and enhancng tourism flows, hence improving cross-border business activities,
• fostering trade relations,
• boosting investment opportunities and collaboration between Cypriot and American enterprises, and, of course
• strengthening people-to-people ties.

"Whatever the outcome of the US Elections, Cyprus is in the best position it has ever been regarding its relations with the United States. At AmCham Cyprus, we are committed to further strengthening these ties, confident that both the Cypriot government and the private sector will work alongside us to do the same," Pantelides concluded.