As Donald Trump inches ever closer to the White House, some in the business world are increasingly nervous about what that might mean for them. Here’s the full story.
Don’t Look Up
Donald Trump’s path to the White House, though not certain, is something we all must begin to grapple with.
It seems that nothing less than an asteroid strike on the earth will stop him from winning the Republican nomination for president as the grip he holds on that once proud party continues to tighten.
As a party that has traditionally been unashamedly pro-business, anti-regulation, and fond of cutting taxes, it seems that many business leaders and large corporations would be aboard the Trump train.
Take Your Pick
However, the picture for a second Trump term may not be as rosy as you’d typically imagine. Here are a few reasons Donald Trump may be bad for business.
To say Donald Trump left the White House under a cloud would be quite an understatement; with the events of January 6th and the failed insurrection, which many hold him responsible for, hanging over his head.
Erosion of Trust
Overall, this was viewed by many in the business world as a stain on democracy and led to a significant erosion of trust between them and a future Trump administration.
Convict in Chief
The legal quagmire in which Trump finds himself is also a worry, as many businesses, who fear bad public relations or scandal, wish to distance themselves from what could be the first president in American history convicted of a crime.
Backlash to Trump
Not only that, but it should surprise no one that Donald Trump is a uniquely polarizing figure.
Business leaders have shown caution when it comes to either supporting or criticizing Trump, living in fear of the backlash that could follow.
Over the Top
They are caught between the supposed progressive ideals many corporations claim to strive for and the genuine threat of retaliation from Trump’s rabid conservative fanbase.
Business leaders may be wary of sticking their heads above the parapet, which would dilute confidence.
Donald Trump’s economic policy can be summed up in five words: cutting taxes and trade wars.
His open disdain for China, the world’s largest factory, along with the protectionist policies he undertook during his last stint in the White House, poses a significant risk for many businesses reliant on international trade.
Trump’s base is deeply reactionary and profoundly anti-immigration.
To appease them, Trump has aligned himself with these values, threatening to close the southern border and undertake mass deportations of illegal immigrants who, unfortunately for many businesses, make up a significant part of the American workforce in sectors reliant on low-cost labor.
Working Without Workers
Any such mass expulsions of workers would only exacerbate labor shortages, making it harder for businesses in a volatile labor market.
If Trump is known for one thing above all, it is his unpredictability.
It has been widely reported that he will change his mind frequently, usually aligning with the last person he spoke to, and has reversed policies in the past.
May You Live in Uncertain Times
This unpredictability, unsurprisingly, creates uncertainty. This uncertainty makes planning for the future for businesses harder and may lead to reduced investment.
A Changed Landscape
Despite many businesses’ initial support for tax cuts during his first term, economic conditions have changed considerably.
Government debt is increasing, and inflation rates remain stubbornly high, leading to increased business borrowing costs.
These proposed tax cuts may even drive inflation higher, a daunting prospect for many companies.
Possibly at the very bottom of things that Trump cares about is concerns for the environment and the ecological catastrophe humanity is currently living through.
Trump’s deep-seated skepticism towards renewable energy and his commitment to increase oil extraction is terrible news for a planet already on its knees.
These policy positions pose significant risks to businesses invested in clean energy initiatives.
It also threatens to stifle innovation and growth in an industry where America is currently a world leader, potentially allowing other countries to overtake it.
With Friends Like These
Lastly, but perhaps most importantly, if there is one thing we can learn from the autocrats around the world that Trump admires, it is that they don’t usually instill confidence in the political system that brought them to power.
The Stain of Association
Whether it is the economic chaos of countries in Latin America or the frequent unrest in the petro monarchies of the Middle East, any businesses seen as being too close to such a controversial presidency may take long-term reputational damage, especially if corruption is suspected or even proven.
War, What Is It Good For?
Societal upheaval is rarely good for businesses, except perhaps those involved in the arms trade. So many companies watch with growing concern as Trump seems to slide ever closer to a second term.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.