Press Release

As the 2024 election approaches, businesses are gearing up to anticipate potential shifts in policies should Trump be reelected. Trump’s first term in office was characterized by tax cuts and an emphasis on “America First” policies, which had profound consequences for various sectors. While some of his policies were welcomed in the business community, others including restrictive immigration policies that led to a shortage of skilled foreign labor were certainly disfavored. Here’s what a second Trump presidency could mean for businesses in the next four years.

Tax Policies

During his presidency, Trump passed the Tax Cuts and Jobs Act (TCJA) of 2017, which significantly reduced corporate tax rates from 35% to 21%. As one of the biggest tax cuts in American history, businesses enjoyed a substantial increase in after-tax earnings, which many reinvested into expansions, stock buybacks, and employee benefits.

On the current campaign trail, Trump has announced that he will make the tax cuts permanent, which are set to expire in a year. He has further announced that he will extend the tax cuts and lower the corporate income tax rate from 21% to 20%. Businesses could expect a continuation of favorable tax policies, potentially including more incentives for capital investments. However, this could also result in increased budget deficits, potentially impacting long-term economic stability.

With a reduction in federal revenue, many argue that the government will resort to printing more money, which will lead to higher inflation. Inflation is a double-edged sword that can have a severe impact on economic stability. As prices rise, the cost of goods, labor, and rent increases, lowering profit margins and making it harder for businesses to stay competitive. Moreover, inflation lowers the spending power of consumers, leading to reduced demand for non-essential items. This will lead to a decline in overall sales, which can further slow economic growth and exacerbate financial instability. While Trump’s tax cuts may seem appealing at first glance, their long-term effects are unwelcome developments for businesses.

Immigration Policies

Immigration has become a predominant topic of discussion during this election due to the record number of asylum seekers coming into the country. New York is currently facing a migration crisis after more than 175,000 migrants sought shelter. During his time in office, Trump initiated the “Build The Wall” campaign and implemented stringent immigration policies. Another Trump presidency is likely to translate into the intensification of these restrictive policies.

During this campaign trail, Trump has promised a continuation of similar policies on immigration. “On day one, I will terminate every open border policy of the Biden administration and we will begin the largest domestic deportation operation in American history,” urged Trump during a rally. “We have no choice.”

The first effect of a similar stance would result in a rise of illegal migrants. Like how water runs downstream, humans will flow where there are better opportunities. Either you have robust institutions in place to absorb the influx of migrants or they will resort to self-help and find their entry ticket through illegal channels.

The second effect of a restrictive stance on immigration would be a rise in the cost of skilled workers for specialist jobs such as IT technicians for Silicon Valley. Major companies in the United States such as Google and Tesla are dependent on H-1B workers. Similar to Trump’s time in office, a second term will translate into adverse effects for U.S. tech businesses as their ability to rely on foreign talent to stay competitive and innovate will be restricted.

Restrictive immigration policies will not only affect skilled workers but also blue collar workers. Immigrants help societies grow since they are willing to work longer hours and many times undertake jobs that settled citizens are unwilling to accept. When you restrict that, it becomes increasingly difficult to fulfill service jobs, small business owners suffer the most as cost of labor is overall a bigger proportion of the costs of doing business.

Taxes and immigration are two of the most significant policies that will affect businesses should Trump win a second term in 2024. While offering short-term gains for businesses, the promised extension of taxes may strain the U.S. economy in the long-run due to higher budget deficits and inflation. On the immigration front, restrictive policies are likely to lead to higher labor costs and worker shortages, thereby increasing the cost of doing business.