(This column originally in The Hill)
There are many who predict that Donald Trump may indeed be our next president. It’s too early to tell, but it’s not too early to prepare. If you’re running a small business, it’s probably time to start thinking how a newly elected President Trump will affect your livelihood. Because he definitely will – in both good ways and bad.
We all know that a second Trump presidency will be erratic, uncertain, disruptive and inflammatory — and that will just be the reaction from his opponents! Trump may be old, but he shows no signs of slowing down, and it’s a near certainty that he’ll be creating a lot of angst, poking at his enemies and generally saying and doing things that will likely be terrifying for some (and probably funny, too).
Regardless of all the hyperbole, business owners should expect this and do their best to ignore it. Talking about Trump literally guarantees upsetting at least half of your customers and employees, so it’ll be more important than ever to just avoid the topic at work and have policies that encourage — even forbid — your employees from talking politics in the office or at work events.
So first the good news.
A Trump administration will mean a suspension or reversal of many of the Biden administration’s labor regulations. Already there are lawsuits from business groups contesting the Department of Labor’s worker classification rules.
The Equal Employment Opportunity Commission will be updating new guidelines making employers responsible for their employees’ behavior both in and out of the office, and that’s likely to face lawsuits as well. Another rule being finalized by the Department of Labor would increase overtime pay for millions of workers. Rather than appeal these lawsuits, the Trump administration will probably just choose not to contest, which means the regulations will die in the courts.
Trump will also rein in the Federal Trade Commission, Occupancy Safety and Health Administration and the National Labor Relations Board by replacing key people with his own choices as terms end. That will come as a relief to many businesses, as all of these agencies have been busy doing things like making it easier to unionize, eliminating non-compete clauses, increasing fines and definitions of safety violations and making it harder for companies to get financing. This means — at least for those regulators — the regulatory party will be over for the next four years.
The 2017 Tax Cuts and Jobs Act will also come into focus. Many of those provisions expire in the next two years, including the very popular Qualified Business Income Tax Deduction, which allows most pass-through organizations like S-Corporations and Partnerships bigger tax deductions. This was a signature piece of legislation during Trump’s first term, which means a second term is likely to champion extensions or even make most of those provisions permanent.
That will all be good news for many small businesses. But a Trump presidency won’t be good for all.
Businesses that rely on overseas suppliers, particularly those in China, are going to struggle. Trump will move to further increase tariffs on many Chinese imports and probably will do the same for other countries where he perceives that America is on the short end (or countries he just doesn’t like — sorry, Canada).
Our tariffs will be met with counteracting tariffs from the countries that are targeted. Multiple studies have shown that the Trump tariff increases in his first term were detrimental to many industries; unfortunately this will have an enormous impact on core material costs for many businesses, from agriculture to manufacturing.
Another potential problem: oil.
Petroleum-based products are used in just about everything, from greasing machinery to powering equipment, and of course fueling cars. Trump’s shoot-from-the hip approach to foreign policy, particularly with Russia and the Mideast, will likely create even more volatility in oil pricing — and he won’t have our strategic reserves to fall back on because President Biden used them all up. Shipping and the prices of other commodities may also suffer price volatility if Trump ratchets up military operations.
The Biden administration’s two key pieces of legislation — the CHIPS and Inflation Reduction acts — are sure to come under scrutiny in a Trump administration. I don’t see him having much of a problem investing in semiconductor manufacturing and related industries, as the CHIPS Act encourages, but the Inflation Reduction Act, which focuses on climate and the environment, is likely to come under fire. Expect counteracting legislation, executive orders to mute the act’s impact and pulling funding where possible. Businesses that that have benefitted from the IRA should be on notice.
Those things aside, companies will enjoy a much more business friendly attitude from Washington under a Trump administration, after four years of pro-worker regulations and activities. This means businesses can feel more comfortable taking a few risks and re-investing without fearing too much government oversight. Coupled with an inevitable reduction in interest rates, this could be a very good boost to the economy and the markets.
So will a Trump presidency be good for a typical small business? It depends on the business, its industry and its location; we live in a big country with a giant economy, so one can’t always generalize. But overall, and despite all unnecessary drama, it does seem like things will be better.