I considered writing this post immediately following the election, but was concerned it might get lost in the hysteria, euphoria, dysphoria or whatever state people find themselves in today. I’ve been fortunate enough to live through a few presidential election cycles and distinctly remember the last 9 or so. One thing seems clear; the ensuing years after an election are never as disastrous or marvelous as those caught up in the moment make them out to be.
That said, there was something entirely different about last year’s election. It was perhaps one of the biggest political upsets in modern history and it’s the first time in more than 60 years we’ve had a president who has never held elected office of any kind (Eisenhower was the most recent, having served as Supreme Allied Commander during WWII). For some, that’s a good thing. For others, it’s a tragedy. I’ve always thought a person with a solid business background might do better in the Oval Office because business as usual in Washington, D.C., which happens to be my home town, typically means inefficiency and waste. I’m often surprised when something worthwhile actually gets done, but it’s not that often.
As a business owner and serial entrepreneur, I remain generally optimistic about the next 4 years. However, enough has been said on the campaign trail and during the first 30 days of the new administration that might give some pause. Following are 8 business areas that that are likely to be impacted by a Trump presidency.
1. Familiarity with Business is Better for Business.
I’ve always believed the White House and Congress might do well having more of its occupants gain business experience and exhibit a quantifiable track record of getting things done prior to holding office. Government can be maddeningly frustrating because talking about doing things can be more meaningful than actually doing them. That’s rarely the case in business, as leaders who say they will do things then never do will not be leaders for long.
As a business owner, President Trump is used to getting things done on time, within budget, and may be a strong ally for businesses of any size. Perhaps with the exception of investing in and running casinos, there is an inherent understanding of how businesses are started, how they grow and what they need to succeed
2. Lower Taxes
Although taxes are inevitable, I would always prefer to reduce my overall tax burden. I hope the taxes I do pay are used much more efficiently than they’ve historically been. If a Trump administration sets the nation on a course of squeezing more out of each and every tax dollar, most would applaud. Furthermore, lower corporate taxes would begin to draw more money back into the country rather than having organizations park it off shore. More money back home means more investment. More investment means greater innovation, more jobs and a growing economy.
3. Better Trade Deals
Some businesses, and most unions, champion the renegotiation of NAFTA and cancellation of the Trans Pacific Partnership while others lament these changes. My hope is that any trade deal benefits American companies – regardless of size and industry – and provides greater expansion and fair access to foreign markets. The reality is that we live in a global economy and no country – not even the U.S. – can rely on doing business only within its borders. Also, with the growing implementation of artificial intelligence and robotics, there will be a need to more intelligenty integrate these new technologies and redeploy staff in light of improved trade deals.
4. Tighter Immigration
For companies that rely on immigrants as an important component of their workforce, the reduction of H-1B visas might negatively impact staff levels. By extension, this will likely effect costs and productivity, especially for certain industries that rely on immigrants who specialize in specific areas such as tech and hospitality.
If we look beyond the headlines of what’s happened in the last several weeks, we should see a greater emphasis on immigration that makes sense for our country and an approach designed to attract the best and brightest and accommodate those that wish to work hard and contribute constructively.
5. More Competitive Relationship with China
For organizations that rely on Chinese manufacturing, leveraging those resources might be challenging if there is a trade war with China at any level. But it’s difficult to determine to what degree. Although I believe neither country wants a trade war, there are other options for the U.S. such as Vietnam and India for apparel, technology and more. This change may not necessarily be the result of a Trump administration, as organizations have already begun sourcing alternatives because of the slowdown in the growth of China’s available workforce. Nevertheless, we will likely see our relationship with China change. Hopefully, it’s a relationship that is mutually beneficial in the long run.
6. Question on BPOs
What will a Trump Administration mean for Business Process Outsourcing? R Chandrashekhar indicated in an interview in The Economic Times article, For Indian IT, president Trump may not be as bad as candidate Trump, “On the campaign trail, statements are not based on calculated assessments, on what is possible or what the impact will be. You could say you will eliminate H-1B visas, build a wall. But practically, you have to see what you can do to boost the economy, create jobs. There’s no need for alarm at this stage.” Chandrashekhar further indicated that Indian IT was a significant factor in the increase in productivity in corporate America and that would not be lost on President Trump.
7. Fewer Regulations
President Trump promised fewer regulations in order to unleash expansion and economic growth. I think most businesses would applaud this move, as many entrepreneurs and business owners viewed the previous administration’s approach to business as stifling. With fewer regulations come the potential for greater abuse. Human nature being what it is, some will take advantage of a perceived lack of enforceable regulations and some individuals and businesses may get hurt. Is greater expansion and a booming economy worth a few more casualties? Because things tend to be relative in this area, I think most would accept greater opportunity and expansion even if it meant greater risk.
8. Supplier Pay Initiative
It’s too early to determine what a Trump administration might do regarding President Obama’s Supplier Pay initiative. Although well meaning, the initiative never had any teeth. With early payment technologies becoming more prevalent, that seems to be the course most businesses are taking these days. The federal government might continue to adhere to the 15-day period of paying many of its suppliers, but I would not be surprised if a Trump Administration espouses some form of supply chain financing for federal government agencies.
If this story is any indication of how a Trump Administration might deal with suppliers to the federal government, there would be valid concern. As outlined in this article in The Washington Post, I sold Trump $100,000 worth of pianos. Then he stiffed me, the Trump Organization paid significantly less than the originally quoted price for a number of pianos for the then-new Taj Mahal casino in Atlantic City. While we can only speculate whether this was a byproduct of the cost overruns associated with the Taj Mahal when it was built or part of a pattern in how the Trump Organization deals with suppliers, we’ll know soon enough whether this has an impact on how the federal government does business going forward. As for the Supplier Pay initiative, I don’t anticipate this gaining additional traction in the private sector with the new administration.
Whether the Trump Administration proves to be an ally to business will likely depend on where you sit. If starting a business, paying fewer taxes or manufacturing in the U.S. are desires, then a Trump presidency may very likely have a positive impact. If there are concerns with hiring immigrants, manufacturing in China and elsewhere, and leveraging BPO expertise overseas, a Trump presidency might be cause for concern.
The next two years bear watching. Overall, I remain generally optimistic that someone who has run a large and successful business is now running the country.
Ernie Martin is Founder and Managing Director of Receivable Savvy. He brings over 25 years of experience in financial supply chain management, marketing and communications and draws upon his extensive experience to share knowledge and best practices with AR professionals. His resume also boasts time at several well-known brands and companies such as Tungsten Network, Delta Airlines, CIGNA Healthcare and Georgia Pacific as well as a number of years as an independent consultant.