It used to be one didn’t have to include a preamble before diving into a commentary. These days, it’s almost a per-requisite to keep just about everyone from being chafed off about something.
The single most difficult thing to do in our current sphere of thought is talk about anything connected to Donald Trump and his incoming Administration. It is fraught with peril, agita. gnashing of teeth, loss of business relationships and friendships, and making one wonder aloud if it's even worth the discussions.
Trump supporters have a tendency to look at any minuscule amount of criticism, whether based on solid fact or rampant hyperbole, to be an affront to their candidate and to them personally. Trump opponents will take anything noted in any positive light as something just this side of an armed insurrection, certainly due to recent history where that word and action actually came front and center into the American consciousness.
Both sides are correct, and both sides are wrong.
But discuss we must, as silence and ignorance are more dangerous than worrying if someone’s bloomers get all bunched up.
In the case of the American economy and how Trump 2 will affect every form of business, one must not fear hyperbolic positives or negatives, instead seek out truth and opinion based on facts.
Donald Trump’s approach to economic policy has always been a mix of populist rhetoric, unconventional ideas, promises that had no chance of ever being kept, (which would indeed make him just another average politician), and traditional Republican tax policies. Of course, we all remember, or we should recall, how “Read my lips” and “trickle down economics” failed spectacularly.
Trumps proposed policies promise a blend of benefits for select sectors, mostly the wealthy, and burdens that could affect the broader economy, mostly those who need all the help they can get.
This is about much more than the price of eggs, people. The simplistic claptrap spewed by both Trump and then-Presidential candidate Kamala Harris was nothing more than a dodge, one that a good deal of the electorate fell for without doing any homework to uncover the truth.
So then, here’s a critical look at five potential changes for better and worse under Trump’s proposed business agenda.
Rising Prices Due to Tariffs
One of Trump’s most defining economic policies has been his reliance on tariffs as a tool for trade wars. He wasted no time in dropping this first dime just a few days before Thanksgiving, a smack in the face to our trading partners in Canada and Mexico.
They don’t work. Period. They don’t lower costs, they don’t automatically increase productivity in America, and anyone who claims they do needs to go back and understand grade-school math.
Trump’s first term saw a significant imposition of tariffs on Chinese goods, which resulted in increased costs for businesses and consumers alike. While Trump framed these tariffs as a way to punish China, the Chinese were laughing then and they’re still doubled over. The reality is that American companies paid $80 billion in additional tariffs by 2020, costs that were often passed down to consumers.
It’s simple, really.
John sells Jane a widget for $25. The widget cost him $15 to make, so he’s seeing a $10 profit. Suddenly, the government clamps down and says John can’t sell his widget anymore without also adding on a tariff, or punishment tax, of $10. It now costs him $25 to produce. John still needs to make a profit, so in order to do so, he increases the cost of the same item to Jane to $35. She needs his widgets, she has to pay the price, which means she’s punished by the government for doing zero, and John still makes his profit. If, that is, she doesn't go elsewhere for her widget and thus negatively impact John's business.
Meantime, the government pockets the $10 for doing nothing but having the power to slap it on those widgets and make off with a tidy sum for doing nothing.
How tough is that to understand?
If Trump reinstates or expands tariffs, industries dependent on imports, especially manufacturing, technology, and retail, will face higher costs, forcing businesses to raise prices or cut jobs. Smart economists without a partisan political axe to grind widely agree that tariffs function as a hidden tax on Americans, with the potential to erode household purchasing power and slow economic growth.
Increased tariffs are a massive and unnecessary blow to Americans just trying to make ends meet.
Potential Deregulation
Trump’s deregulatory stance could benefit certain industries, but only at higher levels of profit. His first term was marked by efforts to roll back environmental, labor, and financial regulations, often citing their burden on businesses. Small businesses and energy companies, in particular, lauded these moves, claiming they reduce costs and increase profitability.
However, deregulation is a double-edged sword. While it may lower short-term costs for businesses, it often comes at the expense of worker safety, environmental protection, and consumer rights. The challenge is ensuring that deregulation fosters growth without creating long-term harm.
In his first Administration, Trump tried to eviscerate as many regulations as he and his team could based on what they claimed were “detriments” to the American economy. What was missed by many in reporting these moves is that Trump tried to do so by, in essence, breaking the law. Just 22 percent of his regulatory or deregulatory actions that were challenged in court came thru the legal process without a mark. Easier math: that’s 4 out of 5 that didn’t pass legal muster.
This isn’t to say there are not laws and regulations that need refinement and, even in some cases, a fresh start. But doing that doesn’t not mean tearing everything down to bare bones and starting from scratch. In the world of proper government and running America, that’s a fools errand and done for little more than ego and arrogant bluster. There is numerous evidence and factual findings that a good number of Trumps policies damaged America’s air and water quality, came at the expense of destroying not just pristine historic lands but also potentially killing native wildlife and ecology, and did nothing more than line the pockets of massive conglomerates and corporations who don’t give a damn about protecting anything other than their shareholder profits.
Appointing Unqualified Officials
One glaring issue with Trump’s approach to economic governance is his history of appointing individuals with limited qualifications or controversial records to key economic positions. For example, in the first Administration, former Commerce Secretary Wilbur Ross faced criticism for ethical conflicts, and Treasury Secretary Steven Mnuchin’s background in investment banking, along with his history of being a predatory lender, raised concerns about favoring Wall Street over Main Street.
That was a minor tune-up compared to what we have before us now.
Here even before taking the oath of office, Trump has opened the flood gates for the unqualified to be in positions of power. Before dropping out in the face of ethics and legal issues based on sexual assault allegations, Matt Gaetz was on track to become the Attorney General, the nations highest ranking legal officer, without having ever tried a case or being in a position of legal authority at any stage of his “career”. Even a FOX “News” analyst, where one would automatically consider there would be nothing more than platitudes, stated that Gaetz was “unqualified to be your babysitter”.
The list of those unqualified by any stretch to be leading critical factions of American government, all of which could have an impact on the economy and businesses of every size, is too long to list here.
The risk of appointing similarly unqualified individuals could destabilize economic policy, undermining confidence in government oversight and creating challenges for small and medium-sized businesses that rely on fair economic frameworks.
Strains on Small and Medium Businesses
Trump’s tax policies during his first term heavily favored larger corporations and the wealthy, with the corporate tax rate slashed from 35% to 21%. While this benefited large corporations, many small and medium-sized businesses reported negligible benefits, as they couldn’t take full advantage of loopholes and deductions available to larger firms. They were squeezed out because they weren’t at the higher level of fealty.
Further tax reforms under Trump 2 could exacerbate these inequalities. Combined with potential cuts to healthcare subsidies and labor protections, small businesses may struggle to compete, particularly if consumer spending weakens due to rising inequality.
Infrastructure Spending (Maybe)
Trump’s first term included grand promises of infrastructure investment, though few of these plans came to fruition. However, should he decide this time to follow through on a serious infrastructure agenda, sectors like construction, engineering, and technology could see significant benefits. Improved infrastructure also helps businesses across the board by reducing logistical costs and improving efficiency.
That said, Trump’s track record of over-promising and under-delivering raises skepticism about whether meaningful infrastructure investment would materialize under his leadership.
The Biden Economy vs. Trump’s Promises
Under Joe Biden, the U.S. economy has seen significant recovery. Unemployment remains low at 4.1%, inflation has begun to moderate, and infrastructure investments through the bipartisan infrastructure bill have begun revitalizing critical sectors. Despite these successes, Trump’s campaign portrays the economy as weak and promises sweeping changes that many economists view as unrealistic or counterproductive.
One must go back to Trump 1, where Trump inherited a robust economy from Barack Obama, and handing Joe Biden a disaster. That’s not an opinion, that’s based on checkable, verifiable, can’t be twisted fact.
Trump’s new and promised policies could jeopardize this stability. Expanded tariffs, corporate favoritism, and weakened regulatory oversight could fuel inequality and economic instability. At the same time, any benefits from deregulation or tax cuts are unlikely to offset the broader negative impacts on middle-class Americans.
But let’s back up a moment. Trump could still take meaningful and logical steps to continue America’s economic growth. He once again has a solid floor from which to work, one that needs refinement but not a complete overhaul. Campaign promises of “doom and gloom” don’t have to be true or come to fruition. As President, and knowing his mistakes from before, Trump has the power to be an economic force for every sized-business.
But is that what he wants?
It’s challenging to identify substantial positives in Trump’s economic platform. While his policies might favor large corporations and wealthy investors in the short term, the long-term consequences for average Americans are deeply concerning. Rising prices, stagnant wages, and weakened protections for workers and the environment could erode the gains made under Biden’s administration.
If there’s any silver lining, it’s that Trump’s unorthodox policies could spark a renewed focus on economic fairness and sustainability as the public recognizes the dangers of prioritizing short-term profits over long-term prosperity. But for now, his promises largely remain a recipe for corporate greed at the expense of the American workforce and economy.
In sum, Trump's proposed economic changes present more risks than rewards. While there may be some isolated benefits for certain industries, the broader implications suggest a troubling path forward for the American economy.
Yet it's important we face this as a unified business community and not just desire, but demand, Donald Trump do what is proper for every sized business. We must want him to succeed, for that means our businesses thrive and we all can grow and profit at an even-handed level.
Business owners of every size and profit level need to be aware of where we are, where we could be heading, and how to best decide their own plans to maintain an even keel and stay profitable.
Let’s talk in a year and see where we are. Hopefully, Donald Trump will remember he is here to serve all the people, and not just special interests.
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