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Donald Trump has promised sweeping action in a second administration.
The former president and now president-elect often skipped over details but through more than a year of policy pronouncements and written statements outlined a wide-ranging agenda that blends traditional conservative approaches to taxes, regulation and cultural issues with a more populist bent on trade.
Trump’s agenda also would scale back federal government efforts on civil rights and expand presidential powers.
A look at what Trump has proposed in areas that affect business:
Immigration
“Build the wall!” from his 2016 campaign has become creating “the largest mass deportation program in history.” Trump has called for using the National Guard and empowering domestic police forces in the effort.
Still, Trump has been scant on details of what the program would look like and how he would ensure that it targeted only people in the U.S. illegally. He’s pitched “ideological screening” for would-be entrants, ending birth-right citizenship (which almost certainly would require a constitutional change), and said he’d reinstitute first-term policies such as “Remain in Mexico,” limiting migrants on public health grounds and severely limiting or banning entrants from certain majority-Muslim nations. Altogether, the approach would not just crack down on illegal migration, but curtail immigration overall.
Some economists and real estate leaders have warned that sweeping deportations could hobble the construction industry by depriving it of workers and drive up building costs in places like the Northeast that already have a shortage of skilled tradespeople.
Taxes
Trump’s tax policies broadly tilt toward corporations and wealthier Americans. That’s mostly due to his promise to extend his 2017 tax overhaul, with a few notable changes that include lowering the corporate income tax rate to 15 percent from the current 21 percent. That also involves rolling back Democratic President Joe Biden’s income tax hikes on the wealthiest Americans and scrapping Inflation Reduction Act levies that finance energy measures intended to combat climate change.
Those policies notwithstanding, Trump has put more emphasis on new proposals aimed at working- and middle class Americans: exempting earned tips, Social Security wages and overtime wages from income taxes. It’s noteworthy, however, that his proposal on tips, depending on how Congress might write it, could give a back-door tax break to top wage earners by allowing them to reclassify some of their pay as tip income – a prospect that at its most extreme could see hedge-fund managers or top-flight attorneys taking advantage of a policy that Trump frames as being designed for restaurant servers, bartenders and other service workers.
He’s also pledged to eliminate the $10,000 cap on state and local tax deductions.
Tariffs and Trade
Trump’s posture on international trade is to distrust world markets as harmful to American interests. He proposes tariffs of 10 percent to 20 percent on foreign goods – and in some speeches has mentioned even higher percentages. Moody’s Analytics has estimated that the former president’s tariffs during his first administration affected only around $300 billion in mostly Chinese imports, compared to the roughly $3 billion in all imports that could see higher prices under plans he’s outlined.
Those tariffs on foreign goods, which Trump has said would be used to pay for his tax cuts, could make some construction materials more expensive.
From Korean washing machines for new apartments to Canadian softwood lumber used to frame walls, international products are deeply woven into the commercial real estate industry’s supply chains. And many mainstream experts have questioned whether U.S. industries can, in all cases, fill gaps created by higher prices on foreign products.
Regulation, the Fed and Inflation
The president-elect seeks to reduce the role of federal bureaucrats and regulations across economic sectors.
Trump frames all regulatory cuts as an economic magic wand. He pledges precipitous drops in U.S. households’ utility bills by removing obstacles to fossil fuel production, including opening all federal lands for exploration – even though U.S. energy production is already at record highs. Trump promises to unleash housing construction by cutting regulations – though most construction rules come from state and local government. He also says he would end “frivolous litigation from the environmental extremists.”
The approach would in many ways strengthen executive branch influence. That power would come more directly from the White House.
He would make it easier to fire federal workers by classifying thousands of them as being outside civil service protections. That could weaken the government’s power to enforce statutes and rules by reducing the number of employees engaging in the work and, potentially, impose a chilling effect on those who remain.
One of the biggest sectors to potentially benefit: Banks. The industry has been at war with the Consumer Financial Protection Bureau over numerous regulations introduced under the Biden administration, which a Trump presidency would have the opportunity to roll back.
The biggest question mark hangs over the Federal Reserve’s independence.
As a candidate, Trump also suggested that the central bank should be subject to more presidential power, particularly when it comes to its benchmark short-term interest rate policy. Though Trump has not offered details, any such move would represent a momentous change to how the U.S. economic and monetary systems work
Before the election, the Fed was widely expected to cut its benchmark rate by a quarter-point later this week amid good economic data. But Trump’s proposals to impose high tariffs on all imports and launch mass deportations of unauthorized immigrants and his threat to intrude on the Fed’s normally independent rate decisions could send inflation surging, economists have said. Higher inflation would, in turn, compel the Fed to slow or stop its rate cuts.
Material from prior Associated Press reports was used in this story.
Commercial Record staff writer James Sanna contributed to this story.
