Trumpinomics And The U.S. Middle Market: What Should We Expect?

With Donald Trump as the president elect, it’s important to look at the U.S. middle market in terms of what it means for businesses. Trump has announced a variety of policies that he wants to work on, which was part of his platform for running for president.

Now, it’s important to see how these policies will affect the Middle Market, becoming the Trumpinomics for the nation.

Provide More Jobs

Donald Trump’s vision for the economy is “to create a dynamic booming economy.” How he plans to do this is not completely known, though the goal is to create 25 million new jobs between now and 2026.

As the Gross Domestic Product (GDP) increases by one point, it can add 1.2 million jobs. The “Make America Great Again” campaign has helped many to become believers in all that Trump has been saying throughout his campaign trail and within the debates.

However, the plans are not as substantial as many would like, so there is going to be a significant amount of uncertainty until he gets into office. However, Trump has already been rolling up his sleeves to try and get work done.

This includes visiting the Carrier plant in Indiana. The large air conditioner company was planning on closing their plant and moving to Mexico.

This would have meant the loss of over 2,000 jobs. Trump and Pence, Indiana’s governor and the vice president elect sat down with the company and have been able to keep the plant open in Indiana.

Trump made keeping manufacturing jobs inside of the U.S. a big part of his platform, and he has already proven that he’s willing to do what it takes. Indiana will be providing economic incentives to Carrier for staying, and this kind of thing looks like it will be the standard for manufacturers around the country.

There are certainly plenty of liberal economists who aren’t ready to become Trump supporters. As Jared Bernstein, an adviser to the Obama Administration, told the NY Times, he wants to make sure no one confuses what was done in Indiana to show sustainable economic policy.

While this is true, we as a country have no choice but to accept all that we see and hear at face value. Trump is making changes before being in office, and this is starting to give companies, at least manufacturers within the Rust Belt, a glimmer of hope to what’s to come.

Allow for More Growth

Trump also plans to reform policies with a modern regulatory framework. He wants an “America-first” trade policy and this will in turn help to create a pro-growth tax plan.

The goal is to get the country’s economy sorted so that it allows for tax plans that no longer stifle companies. This can lead to the U.S. Middle Market getting the growth it so desperately needs.

Trump and Pence alike have pledged that they are going to make it possible for the government to be friendlier towards businesses of all sizes, with lowering regulations and modernizing the corporate tax code.

If there is actually an overhaul on taxes, it could mean lower business taxes as well as lowering capital gains. This can make it possible for Middle Market to start growing businesses, expanding, and increasing international trade.

In steps one possible concern. Trump is looking to bring more manufacturing back to the U.S. The problem is that this is going to cut out some of the international trade that other companies depend upon.

If other countries decide to do the same as a form of retaliation, it could begin a trade war. This is something that could have a negative impact on the economy, though it’s too soon to tell.

There have been plenty of predictions about the economy and what the Trump administration will do. According to CNBC, the first will be a change in the infrastructure, followed by a companions job bill that will focus on closing the skills gap and offering tax credits.

One thing is for sure. Everyone seems to be convinced that the economy in the United States will grow under a Trump presidency.

It could surpass 3 percent by the middle of 2017 and stay stable for several years. Further, it’s possible that various valuations will go up as well, which could in turn require a re-price within the market.

All of this leads to excitement for the U.S. Middle Market as long as everyone decides to stay on board for the ride. Companies who are looking to build and expand will have the tax breaks to be able to do so.

Those who want to stay where they are may be able to contribute more to the bottom line because of not having to worry about so many capital gains.

No one has the answers just yet, though Trumpinomics could prove to be beneficial for everyone, including the Middle Market, which needs the help in order to create more jobs.

In the end, Donald Trump is focused on improving the economy, and this means making an effort on every level. Mid-size companies can expect to see a lot of changes in the way the economy works, and much of this is expected to be for the better.

The hope is that more people will have more available income and businesses won’t be so heavily taxed. It could be just what the U.S. Middle Market has been searching for to get a jumpstart.