
Following the election result, John Denslinger looks at the potential impact of policies such as taxes, tariffs and deregulation on the manufacturing sector.
Later this month, the 47th President of the United States will be inaugurated in Washington DC launching a four-year term under Republican leadership. The incoming President will have conservative majorities in both the House and Senate for at least the first two years. All this to say, policies proposed by President-elect Trump during his campaign will now shape Federal governance and the legislative agenda. His goal of energizing America’s economic activity begins!
Did you consider the election impact on your 2025 forecast? After all, the policies each candidate proposed on inflation, employment, immigration, taxes etc were quite far apart. If you anticipated not much would change in the short run, that was probably the correct call as it turns out. With the Republican win, early 2025 now becomes a transitional period. Of course, some immediate change will flow from a slew of Executive Orders in Q1 and the pace may quicken in Q2 with fast-tracked reconciliation spending and revenue legislation, but real economic impact won’t take shape until late Q3 into Q4. Realistically, it will be 2026 before any bipartisan legislation moves the needle further.
So, what are the policies that potentially help businesses beginning this year and will these promises influence US manufacturing competitiveness? Let’s look at policy—issue > benefit to business.
Taxes—existing tax cuts sunset in 2025 > Passing a permanent tax law with potential extensions to tips, overtime and social security is a big positive for consumer spending and a growing economy.
Corporate tax rates—globally non-competitive > Establishing a new 15 per cent tax rate that incentivizes domestic manufacturing stimulates job creation, technology investment and business expansion. In addition, the
tax rate advantage is a win for more onshoring.
Tariffs—unsustainable trade deficits from unfair trade practices > Defending domestic manufacturing and employment via tariffs sets a level playing field for local businesses to compete. Just the threat of tariffs may also encourage countries like China to negotiate more balanced, free trade agreements rather than face costly, new trade barriers. Both situations spur domestic growth.
Deregulation—excessive bureaucracy stalls implementation and escalates costs > Sectors such as banking, transportation, energy and telecommunications are particularly susceptible to furtive rules, environmentalism and woke practices. Reducing the burdensome over-
reach within Federal bureaucracy releases capital to be used more efficiently, eases compliance costs and increases operational flexibility. This action delivers huge financial gains especially to small business.
Fossil fuel production—regulatory curbing of exploration, transport and end use while subsidizing renewables compromised energy security while escalating inflation and consumer costs > Reducing regulations, increasing domestic fossil fuel production, re-gaining energy independence and turning the US into an energy exporting nation means additional jobs and significantly lower energy costs for consumers. Easing the cost of energy lowers inflation, as well as business operating expenses.
Immigration—the open border policy created serious economic hardship for many cities and citizens. Un-vetted migration also compromised public safety and national security > Tightening the immigration policy and acting on the 11 to 15M illegal migrants already in the country will not be easy. Businesses seeking skilled workers are probably not affected; however, businesses employing low-skilled workers may see long-term wage competition.
Last month my 2025 forecast suggested ‘cautious optimism’ based on a strengthening economy in the second half. With the election now settled, I still see reason to be cautiously optimistic. President-elect Trump’s policy platform will stimulate economic growth, but better felt in 2026.