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Donald Trump, sorry – President Donald Trump – made his name in real estate and other businesses, and now he has the keys to the White House and, with it, the title of most powerful man in the world. For a man who made the economy a significant part of his election campaign, it’ll be no surprise that some of the biggest changes he enacts during his tenure in the White House will have to do with financial markets, trade, and businesses. But what exactly can we expect from the economy over the next four years, and how will businesses be affected? We take a look at some of the biggest shifts that might occur, as well as some of the winners and losers of Trumps policies.
Wall Street hasn’t always been the most consistent street on earth, but even by the financial district’s up and down past, Trump’s presidency is something new entirely. If there’s one thing that the stock market needs to be healthy, it’s stability. And Donald Trump doesn’t offer stability. In fact, his rise to the highest position in the land was such a shock that Wall Street was shook the moment it was announced he had won the election. Of course, Wall Street will eventually bounce back – and might even benefit from some of Trump’s policies, but the ever present threat of destabilization will make the stock market increasingly volatile, especially in light of the president’s mantra of ‘America First’. How does that attitude affect a global market? We’ll have to wait to find out.
After the economy, Donald Trump’s main focus was on immigration. He was mostly talking about illegal immigration, but the wider implications of his rhetoric were hard to avoid, even if they were just collateral damage: immigrants will not be front of the queue to benefit from Trump’s policies. The moral debate about this is irrelevant to business; what actually matters is how businesses that rely on foreign labour will be able to cope with any changes that limit a foreigner’s ability to work in the United States. Resort areas are dependent on overseas labour to fill busy seasonal periods, and they won’t be easily replaced; indeed, the reason they are hired is often because the company can’t find Americans who want to work on a short term basis.
For companies that hire the very best employees regardless of where they hail from, such as start ups and IT companies, Trump’s policies might make it more difficult for them to get the necessary work visas.
If you’re a high earner and/or have a vested interest in the profits of a corporation, then Donald Trump might just be the hero you need in order for you to take home more of your money. For starters, President Trump is going to simplify the tax process, more than halving the number of tax brackets. If you’re among the highest wage earners, you’ll see your tax rate drop from nearly 40% down to 33%. Corporate taxes are also being lowered to 15%, and companies who have been concealing their earnings in overseas territories will be able to move their money back home for a one off 10% tax.
Donald Trump is a businessman and, like many other businessmen, has a loathing of nitpicking regulations that stop companies doing business with another and the public at large. Now that there is a businessman in the White House, we might soon have a situation whereby many of the regulations that have stagnated the economy are lifted, and businesses allowed to flourish. This could mean changes in lending laws, financial and banking practices, emission laws, and much more becoming the norm as an era of an open economy comes to pass.
While this might be good for business owners, workers are more likely to feel the strain of any rollbacks of regulations, as in many cases they were initially enacted into law their benefit. For instance, getting rid of the Affordable Care Act, or at least the parts that say businesses that employ 50 or more workers have to offer health coverage, would have a hugely detrimental effect on workers. See also the minimum wage, which Trump has been wavering on. At the moment, he supports a rise to $10 an hour – but will the change, or is it enough anyway?
Many businesses are connected with other parts of the world in some way or another, and this is only made possible due to trade agreements that have been agreed in the past. Donald Trump has vowed to rip up the trade deals that he believes do more harm than good for the United States, and negotiate new deals with countries around the world. This might sound good to some Americans, but the policies come with a long set of problems. For instance, Trump would like to negotiate trade deals that bring American factory jobs back to the states, but this simply can’t happen – any companies that move back to the states will use automated machines to make their products, not workers. Additionally, punishing companies who outsource their work overseas might make them employee domestically, but there would no way that prices could stay the same if workers commanded an American salary. And what a public that cannot afford to buy do for the economy?
Trump has only been Commander-in-Chief for a matter of days, so it’s too early to tell exactly how his presidency will shape social and economic life in the United States and beyond. Needless to say, the economy is heading some big changes once Trump gets properly underway with his plans. If the potential changes listed above frighten you, then A. You’re not alone and B. Perhaps it’s worth remembering that Trump has a habit of flip flopping on ideas, even those that appear to be key to his policies, depending on his whim. So it might not all be as bad as it seems. Or it might be worse. We’ll have to wait and see.