After the whirlwind that was the presidential campaigns, many business owners are now trying to discern what the economy and business markets will look like over the next four years. In a recent webinar, our guests – Steve Blake, Managing Director at CBIZ, and Marc Chandler, Chief Market Strategist at Bannockburn Global Forex – spoke with Oak Street Funding’s Market Research Analyst, Matt Staninger, about coming trends in interest rates, taxes, and the mergers and acquisitions environment. Read on for some of their insights.
After the whirlwind that was the presidential campaigns, many business owners are now trying to discern what the economy and business markets will look like over the next four years. In a recent webinar, our guests – Steve Blake, Managing Director at CBIZ, and Marc Chandler, Chief Market Strategist at Bannockburn Global Forex – spoke with Oak Street Funding’s Market Research Analyst, Matt Staninger, about coming trends in interest rates, taxes, and the mergers and acquisitions environment. Read on for some of their insights.
Donald Trump campaigned on a platform calling for tax cuts, tariffs, and immigration reform, along with a business climate favoring deregulation. He also signaled support for a more relaxed approach to antitrust issues.
If the incoming president is able to enact these broad policy aims – which is likely, considering the Republicans’ control of both the House and the Senate – the climate for business could be positive. Business taxes will tend to be lower, and mergers and acquisition (M&A) activity is likely to face less scrutiny than in past years.
A big question mark, however, is how tariffs would impact businesses. The goals of Trump’s tariff policy – assessing tariffs, payable to the federal government, on goods manufactured abroad – are to pressure manufacturers from other countries to move to a foreign direct investment (FDI) model instead of simply exporting their finished goods to the U.S. Under this model, which the U.S. has followed for half a century, more foreign manufacturers would set up factories in the U.S. and employ American workers.
Most economists agree that tariffs will raise prices for consumers, as the cost of the tariffs will be passed through to the final buyer. If this practice decreases sales demand, businesses could suffer, and the economy could weaken. Revenue from tariffs is supposed to offset reductions in tax revenue, but if the economy softens, tax revenue could drop even further, and government borrowing would have to increase. Overall, the effect Trump’s proposed tariffs will have on businesses and the economy is murky at best.
After the whirlwind that was the presidential campaigns, many business owners are now trying to discern what the economy and business markets will look like over the next four years. In a recent webinar, our guests – Steve Blake, Managing Director at CBIZ, and Marc Chandler, Chief Market Strategist at Bannockburn Global Forex – spoke with Oak Street Funding’s Market Research Analyst, Matt Staninger, about coming trends in interest rates, taxes, and the mergers and acquisitions environment. Read on for some of their insights.