feb-11-picture-1-londodn-groupTrump Economic Policy


Trump administration is receiving mixed reactions from the corporate sector in the US based on its policy reforms that it endeavors to implement. On one hand there are about 97 US tech companies that have teamed up and filed a legal brief opposing Trump’s temporary immigration ban. On the other hand there is a group of 25 leading US exporters that supporting the proposed Republican border tax on all imports stating that the proposal would “support American jobs and American-made products.”


97 Tech Companies Do Not Agree with Trump Policy on Immigration

On their part, the 97 tech companies argue that the executive Order to temporarily ban immigration from 7 Muslim countries “represents a significant departure from the principles of fairness and predictability that have governed the immigration system of the United States for more than fifty years.” In addition, their brief states that “The Order inflicts significant harm on American business, innovation, and growth as a result.”

Whether the 25 companies supporting the border tax on imports will also join and support the 97 tech companies rallying behind the opposition of the immigration ban is yet to be known. However, the leading US exporting companies who have so far formed a coalition dabbed “American Made Coalition” are focused on ensuring their products compete favorably both within and outside the US.  Among other big names in the coalition include Dow Chemical, Eli Lilly, Pfizer, and Oracle.

Is Retaliation Possible From Other Countries

“Viewed in totality, the proposed fiscal stimulus package is protectionist in nature and it will result to retaliation from other countries, hence turning out to be self-defeating in the long-run,” an analyst from 24option explained. Trump administration is proposing to have a fiscal stimulus package that will see corporate tax in the US reduced to 20% from the current rate of 35%. In addition the proposed fiscal policy seeks to exclude export revenue from taxable income; a change that will benefit US exporting companies highly as they book higher profits in their books due to lower tax liability. On the other hand, the fiscal policy change seeks to impose a 20% tax on all imports hence making imports more expensive compared to locally produced goods and services.

Despite the fact that the proposed fiscal changes might end up being counterproductive, the leading US exporters who stand to gain hugely from them claim that the changes are good for the US citizens. John Gentzel, a spokesman for the coalition explains “American workers and businesses are not competing today on a level playing field with foreign competitors because of an outdated and unfair tax system.”

His words seemed to mirror those of President Trump during his inauguration speech when he said that “Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength.”

The “American Made” Coalition

The “American Made Coalition” is however not going unopposed. The Retail Industry Leaders Association which is made up of about 120 trade associations and companies launched their separate coalition feb-11th-picture-for-london-article  to counter the proposal which is known as “border adjustment” tax. Contrary to what John Gentzel said in defense of the proposed fiscal policy change, Sandy Kennedy, president of the Retail Industry Leaders Association explained that “The border adjustable tax is harmful, untested, and would put American retail jobs at risk and force consumers to pay as much as 20 percent more for family essentials.”

Among the leading companies that will suffer if the border adjustable tax is passed into law are foreign automakers such as Toyota Motor, oil refineries and retailers. Due to the foreseeable dent into their profits from the big tax on imports, the companies have been lobbying Congress in order to ensure the law does not pass; since this would give their rivals an unfair advantage over them.

The divided US corporate sector brings out the true picture of the fact that business is all about interests and when policies favor your interests you support them regardless of who proposes them. On the other hand if the policies do not favor your interests, you mobilize enough supporters who share in your pain and oppose them. This is creates a high voltage lobbying scenario in Washington whose outcome might not necessarily be good for the end customers.