Polibiz: The Trump Presidency One Month In

We are one month into a new Presidency, and we now have a clearer picture of what Trump wants to accomplish while in office. We all know that he signed a record number of executive orders on his first day in office, yet his work has not stopped there. He is clearly committed to pushing through his agenda swiftly and it has forced businesses in the U.S. to take a reactive stance. The main issue for companies has been the introduction of new tariffs. Some have been put on hold, yet others have been firmly put in place, and it seems like more are coming. Tariffs are not the only thing on the mind, his other policies are also causing concern. How will business react and what is the next step?

Tariffs are at the top of mind for every business right now. We already know that Trump has paused the tariffs on Mexico and Canada, yet we could still see effects come from these policies. The tariff on China has already taken effect and they have retaliated in turn. It is already costing U.S. businesses, and it could just be a sign of what is to come. Trump’s latest have started to affect the automotive and pharmaceutical industries. He would levy a tariff at about 25% for both industries and possibly for semiconductor imports as well. He has clarified that the pharmaceutical and semiconductor tariffs would start at 25% and would climb every year. These taxes are much more severe than what has been placed on China, and they would strike at multiple industries. Considering that we are only a month into a four-year term, it would be likely that more of these are coming.

As economically shifting as tariffs can be, they are only a piece of the puzzle. His immigration policies, specifically the plan for mass deportations, could have a tremendous effect on business and the economy. If he were to push through his plan, it could cause a shock to the labor market. This shift would almost certainly drive-up inflation, a thing that no consumer or business wants. More inflation would be paralyzing to businesses that are still trying to find their footing, even if those companies weren’t directly impacted.

The other major component to Trump’s first month in office is DOGE, the Department of Government Efficiency that is headed by Elon Musk. While the department is still in its infancy, Musk has already made his intentions clear. He plans to cut down on spending and that has caused investors to question whether certain government contracts with public companies are about to be canceled. Many industries are reliant on these contracts, especially the agricultural sector, and the uncertainty around their future could cause panic. In addition, the hamstringing of the Consumer Financial Protection Bureau and FDA could put consumers on the defensive and increase liability for businesses. However, on the other side of the coin, an increase in government efficiency might be good for the economy. Additionally, a reorganization of public contracts could provide new opportunities for those that had been shut out before.

All three of these factors define the first month of Trump’s presidency. This has been anything but a quiet transition of power. It has been a short span of time for business to react and many have taken a wait and see approach, which as discussed last week, is the opposite approach to uncertain times. In many ways it is too soon to tell what will happen or what he will do next. Others have taken steps to diversify their supply chain and labor force in anticipation of tariffs and other moves. We are just getting started and there will be more to come in what is likely to be a short period of time.