There are many people predicting that Donald Trump may actually become the next president. It's too early to tell, but it's never too early to prepare. If you own a small business, it may be time to start thinking about how newly elected President Trump will affect your life. Because he definitely will be, for better or for worse.
We all know that Trump's second term in office will be volatile, uncertain, disruptive, and inflammatory. And that's just the response from his opponents. Trump may be old, but he shows no signs of slowing down and is almost certain to cause a lot of anxiety, poke fun at his opponents, and say and do things that will be frightening to some (and maybe even funny). .
Regardless of all the hype, business owners should expect this and do their best to ignore it. Talking about Trump is literally guaranteed to upset at least half of your customers and employees, so avoid the topic at work and create policies that encourage or even prohibit employees from talking about politics in the office or within your company. It will be more important than ever to establish this. work event.
Well, first of all, the good news.
That means the Trump administration will suspend or roll back many of the Biden administration's labor regulations. Already, lawsuits have been filed by business groups challenging the Labor Department's worker classification rules.
The Equal Employment Opportunity Commission plans to update new guidelines that will hold employers accountable for the actions of their employees in and out of the office, which will also likely face litigation. Another rule finalized by the Labor Department would increase overtime pay for millions of workers. The Trump administration will likely choose not to contest these lawsuits rather than appeal them. That means the regulations can be invalidated in court.
Mr. Trump also plans to rein in the Federal Trade Commission, the Occupational Safety and Health Administration, and the National Labor Relations Board by replacing key officials of his choice as their terms expire. This is because all of these government agencies are busy making it easier to unionize, eliminate non-compete clauses, raise fines and definitions of safety violations, and make it harder for companies to raise money. This will be a relief for many companies. This means the end of the regulatory side for the next four years, at least for regulators.
The Tax Cuts and Jobs Act of 2017 will also be a focus. Many of these provisions will expire in the next two years, including the very popular Qualified Business Income Tax Credit, which allows most pass-through organizations, such as S-Corporations and Partnerships, a larger tax deduction. This was the flagship bill of President Trump's first term, meaning it is likely that his second term will either support an extension or make most of these provisions permanent.
All of that will be good news for many small businesses. However, Trump's presidency will not be good for everyone.
Companies that rely on overseas suppliers, particularly China, will struggle. President Trump will move to raise additional tariffs on many Chinese imports, and perhaps other countries that perceive the US to be in trouble (or countries that President Trump doesn't like, sorry, Canada). Similar measures will be taken against
Our tariffs will be countered by counter-tariffs from target countries. Studies show that Trump's tariff increases during his first term had a negative impact on many industries. Unfortunately, this will have a significant impact on core material costs for many companies, from agriculture to manufacturing.
Another potential problem is oil.
Petroleum-based products are used in almost everything from machine lubrication to power equipment and, of course, fuel for cars. President Trump's foreign policy, especially his aggressive approach towards Russia and the Middle East, is likely to further increase the volatility of oil prices, and with President Biden having exhausted all of his strategic reserves, he will have no strategic reserves to fall back on. . If President Trump ramps up military operations, shipping and other commodity prices could also see price fluctuations.
Two important pieces of legislation from the Biden administration, the CHIPS Act and the Inflation Control Act, are sure to come under intense scrutiny under the Trump administration. I don't think he has a big problem with the investment in semiconductor manufacturing and related industries that the CHIPS Act encourages, but the Climate and Environment-focused Inflation Control Act is likely to draw criticism. We hope to see counter legislation, executive orders to limit the impact of the law, and possible funding. Companies receiving IRA benefits should be careful.
All that aside, after four years of pro-worker regulations and actions, companies could enjoy a more business-friendly attitude from Washington under the Trump administration. This means companies can feel more comfortable taking on some risk and reinvesting without fear of excessive government scrutiny. Coupled with the inevitable interest rate cuts, this could be a very positive stimulus for the economy and markets.
So, is President Trump's inauguration good for the typical small business? It depends on your business, industry, and location. We live in a big country with a huge economy, so we can't always generalize. But overall, despite some unnecessary drama, things seem to be getting better.
Gene Marks is the founder of The Marks Group, a small business consulting firm. He frequently appears on his CNBC, Fox Business, and MSNBC.
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