Will Donald Trump’s presidency be good for retailers?




Days after the conclusion of arguably the most divisive campaign in U.S. history, in which one candidate won the popular vote and the other the Electoral College, retailers are left to wonder what a Donald Trump presidency will mean for their businesses.
To support or oppose Mr. Trump’s agenda is complicated by the fact that his candidacy mostly centered on the man himself and lacked policy specifics on issues important to retailers. Groups representing retailers are hopeful the new administration will seek pragmatic solutions to challenges on a variety of important issues.
International trade – Mr. Trump has criticized trade deals he maintains has cost Americans jobs. He has pledged to renegotiate past agreements and to slap tariffs on goods imported from nations such as China that he believes are undermining U.S. businesses. The National Retail Federation (NRF), which supports the Trans-Pacific Partnership (TPP) pact championed by the Obama Administration, estimates the deal would “boost U.S. spending power by more than $1,000 per household.” Mr. Trump wants to rework TPP, if not scrap it entirely.
Immigration – Mr. Trump has pledged to build a wall on the nation’s southern border and institute a ban (size and scope TBD) of individuals coming to the U.S. from Muslim nations. Fulfilling this pledge may limit top talent emigrating to the U.S.
A recent story of a Fulbright Scholar-winning data scientist sending his wife and children back to Pakistan after their seven-year-old son (an American citizen) was allegedly bullied at school for being Muslim is an example of an anti-immigrant mood found in parts of America. It should be noted that local authorities have been unable to verify the family’s claims at this point.
Infrastructure – Mr. Trump has pledged to support massive new spending to rehabilitate America’s crumbling bridges, roads, tunnels and airports, infrastructure vital to retail industry performance. NRF supports infrastructure investments and plans to lobby for “a multimodal national freight policy to smooth the movement of retail cargo from ships to trains to trucks.”
Taxes – Candidate Trump called for lowering corporate tax rates from 35 to 15 percent while eliminating some of the deductions now taken by businesses. It’s unclear, at this point, if that would eliminate deductions on imports that are seen as favorable to retailers.
- Trump’s Policies Could Damage America’s Retailers – Bloomberg
- What Trump’s Election Means For Retail Sales – Forbes
- Post-Election Retail: Where Do We Go From Here? – National Retail Federation
- Retail Federation Watching for Donald Trump’s Trade Policy – The Wall Street Journal
- Post-Election Trauma May Depress Holiday Shopping Season – USA Today
- N.C. Authorities: No Evidence To Support Father’s Claim Muslim Boy Was Assaulted On Bus – The Huffington Post
DISCUSSION QUESTIONS: Do you expect retailers to benefit from Donald Trump’s presidency? What issues related to the retail industry, whether covered in this article or not, will be most important for the new administration to address?
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33 Comments on "Will Donald Trump’s presidency be good for retailers?"
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Consultant, Strategist, Tech Innovator, UX Evangelist
Campaigns are hype. Every past president has fallen far short of campaign promises, so time will tell what, if anything, will come to be.
Nevertheless, if everything were to be enacted and Chinese imports diminished, shelves would not go barren. American manufacturing would fill the void at nearly the same price points if the opportunity were presented. If immigration were curtailed, 320+ million people would fill jobs and keep up buying, especially now that more states have raised the minimum wage.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Consultant, Strategist, Tech Innovator, UX Evangelist
Gene — I’m guessing you’re disputing my opinion by the facts you culled. And FYI — I’m a former manufacturing engineer that worked in the metals industry, so I’m very familiar with the effects of automation on those jobs.
If the U.S. economy totally tanks as a result of administration policy, retail will be one of many victims. But before brands/manufacturers shutter operations because they can’t peddle products at tariff-matching prices, they will find ways to deliver the cheap goods Americans are addicted to. It’s survival with a bit of disruption thrown in.
Lower-tiered jobs are unlikely to rebound in manufacturing no matter what the economy does and that’s not something I implied. Higher minimum wages make retail more attractive and allows a little more workforce retention for merchants. And if the economy stays stable, especially if the hype (from someone who never negotiated a national trade agreement) blows over or is minimal, those making slightly more livable wages will be spending and not saving.
Nevertheless, until 1/21/17 everyone here is stating hypotheticals based on campaign rhetoric.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
I don’t dispute your comments. What I emphasize is that tariffs and perhaps trade wars will hurt the economy. It will increase the cost of living and will not produce new jobs. That is not speculation, that is based on decades of data.
Today more than ever, tariffs will encourage global companies in the U.S. to move even more operations out of the U.S.
Principal, Retailing In Focus LLC
I’m trying to set aside ideology here, because the split verdict on the election leaves voters uncertain on both sides. Will Mr. Trump live up to his harshest platform promises or try to moderate his views? Today, nobody knows whether the answer to that question will chill fourth quarter sales or stimulate them.
So the only way to answer this over the long haul is to look at the economic impact on consumers. Tax cuts and infrastructure spending are good for businesses and consumers but (on the other hand) protectionism and tariffs will lead to higher prices. And any effort to restrict (or reverse) immigration patterns will stall the population growth that our economy depends on.
Finally, the plans to “repeal and replace” the ACA may have a huge impact. On one hand, lower costs benefit consumers and small businesses; on the other hand, if millions lose insurance coverage they will face an economic threat that will crimp their spending for the foreseeable future.
Principal, Frank Riso Associates, LLC
I think it is way too early to tell but I do think he will be good for retailers in many ways. Reducing taxes could result in more money to grow and hire more staff. Also if he follows the law completely on immigration we could see more employment for retailers. If he keeps to his promises we are going to see many changes and some will be good for retail and some may not be. As I said, it is too early to tell so let us wait and see.
Founder, CEO & Author, HeadCount Corporation
Retailers like every other business will need to wait and see what impact Trump’s policies will actually have on their businesses. While a number of his policies like trade, for example, appear to be net-negative for retailers, it’s not a forgone conclusion that they ultimately will be negative. And, since Trump has not been completely aligned with the GOP on a number of issues, it’s unclear what the final policy outcomes will be. What I think we can say for certain is the future will be relatively uncertain — and uncertainty is never good for business.
Principal, Cathy Hotka & Associates
I live in Washington DC, where the new conventional wisdom (after the deep shock of the election) is that Trump will not actually do any of the things he promised. Massive tax cuts, combined with huge new infrastructure programs, tens of billions in cash for an already swollen military, and impactful trade wars would have unmistakable effects on our national debt. It will be interesting to see the next State of the Union address, to say the least.
Content Marketing Manager, Surefront
In times like these customers are more concerned with saving for their (and their children’s) future than spending. When America is in political upheaval people aren’t concerned with buying clothing. Furthermore, the high tariffs on imports will curtail the American economy.
From my involvement in apparel trade shows, I can tell you the proposed deportations would completely shift brand dichotomy. A huge percentage of exhibitors at the OFFPRICE Show are immigrants.
To appease investors, Trump has also pledged to go forth with the Dakota Access Pipeline. Temporarily this may, as he says, create more jobs. However, the protests and polarization that result from polluting native land will be more harmful to commerce as a whole.
The following reflects my opinions and not those of my employer: The new administration would be wise to assure all Americans that we are safe under Trump’s regime. Proposed civil rights violations have terrified U.S. citizens and the terrified don’t spend money.
Co-founder, RSR Research
Amen.
Scientific Advisor Kantar Retail; Adjunct Ehrenberg-Bass; Shopper Scientist LLC
So which will help retailers more, giving the government more money to continue an explosive growth of regulation and government management of society, or moving the needle the other way, with businesses and SHOPPERS controlling more of their own money? Duh! The confusing thing is why in a free America this question would be confusing.
Strategy Architect – Digital Place-based Media
Retail success is based largely on consumer confidence and ability to spend (including credit-worthiness) which drives investment in innovation and marketing. As physical retail struggles to implement omnichannel strategies and faces competition from online, brands and retailers will benefit from the traffic and conversion that that consumer confidence and enabling tools support. Nothing is holding back consumer spending except their confidence in the the future, and nothing is holding back retailers except their own innovation.
Chief Amazement Officer, Shepard Presentations, LLC
There are a number of issues on the table, but I’ll only address one. Typically, the fiscally conservative (as in Republican) approach has favored business. I think we’ll see more favorable decisions made that will help business in general.
CEO, Co-Founder, RetailWire
According to Forbes (not exactly a left-leaning publication), that is not true. Business Insider reaches the conclusion that the stock market does better under Democrats. I realize that the market does not exactly mirror business as a whole but it’s an indicator.
Scientific Advisor Kantar Retail; Adjunct Ehrenberg-Bass; Shopper Scientist LLC
Don’t know about that, but the stock market immediately hit an all time record with the election of Trump.
President, Spieckerman Retail
CEO, The Customer Service Rainmaker, Rainmaker Solutions
How can we know or predict what will happen after this tumultuous campaign period? Did we ever expect Mr. Trump would win the party’s nomination let alone the presidency? Have we ever seen protests like this after an election in our country? I don’t think Mr. Trump knows what he will do. He has talked the talk. Now it is going to be the time to walk the walk. His first priority is not retail; it is unification.
Principal, Retailing In Focus LLC
Agreed, and some of the names being floated for key jobs (Steve Bannon of Breitbart for chief of staff, for example) are likely to have a chilling effect on many of those who didn’t vote for Trump but would like to give him a fair chance to succeed.
As to Cathy Hotka’s observation (above) that the conventional wisdom in DC expects Mr. Trump to do nothing that he promised … how did the conventional wisdom work out on Tuesday?
Founder & CEO, Dextro Analytics
Let’s look at the demand and supply side and then plot them on the third dimension of short-term and long-term.
Given the hope (false or true), 60% of blue collar Americans are likely to spend more at least in the short term hoping for a rise in the minimum wage. It would be a big mistake on the part of retailers to consider what happens in the next three months as a conclusive trend. Sentiments and hopes would be the key driver of sales in next three months. There is a massive uncertainty in the long run — if cuts in corporate taxes are underwhelming, it would backfire across the board.
CEO, Co-Founder, RetailWire
Senior Vice President, Dechert-Hampe (retired)
Al, I am not surprised by your perspective — but to be fair, isn’t the RW staff always telling us to check politics at the door? (Which is PRECISELY why I have stayed out of this discussion by the way. As you well know, my views are dearly held and difficult to repress once my fingers hit the keyboard!)
Have a good day and join me in collectively hoping that this all works out OK. Just like we did in 2008.
CEO, Co-Founder, RetailWire
Hi Ben, Always good to get your perspective. I am not a writer nor editor (though I write some discussion stories), but a partner in the business, and I do have opinions. We wrestled with whether to run this story because of the politics involved, but opted to do so since we viewed it as an unprecedented (at least in the last 15 years) seismic event. In reviewing my comments, I tried to obey our “golden rule” and focus on the announced plans and well established intentions of a Trump administration, especially as they may effect consumers and retail. My opinions may be wrong, and are only my own, but as RW staff now has “BrainTrust” privileges to comment (overdue IMO), I wanted to weigh in. Hope you are well and feel free to share your views.
All depends. The economy is always good all the time for good retailers. If you are a bad retailer, then it doesn’t matter who is president. If you are a good retailer, it doesn’t matter who is president. Good retailers adapt. Bad retailers will find reasons and scapegoats for their failure.
One thing I do know is Ireland is really scared right now that many U.S. companies will repatriate their profits back to the U.S. if taxes are lowered. However what candidates say they will do is a lot different than what really happens. They campaign on the right or left but govern in the middle.
We are not going to do anything with our immigrants unless they are actual criminals. We need immigrant labor in agriculture and there are massive labor shortages already. Every farmer in the country had a Trump sign out front and if they thought for one minute the Donald was going to force them to let the apples rot on the trees, they would not be supporting him.