As we get over the initial Facebook breakdowns and capital market shocks, the question remains: What will a Trump presidency look like, and how will it affect procurement?<\/p>\n
In thinking through the implications, we can break down changes into three areas: environmental policy, trade policy and tax policy.<\/p>\n
This is the easiest of the three. Just as the E.U. decimated the U.K.\u2019s manufacturing industry with emissions and production regulations, so too has the Environmental Protection Agency (EPA), under President Obama, weighed on heavy industry in the U.S. In keeping with the populist tone of Trump\u2019s campaign and jobs creation pledge, we\u2019ll likely see a 180-degree reversal in policy in this area.<\/p>\n
As Lisa and I noted in our monthly manufacturing column that we penned for Surplus Record in the wee hours of the morning today, \u201cThe change in presidential leadership will likely mean a reversal of some of the policies that have inhibited investment in sectors such as mining. Specifically regulatory policy surrounding climate change, the Clean Power Plan and Boiler MACT rules may change. The shift in the regulatory environment alone could be a game-changer from a mining and investment perspective. Other more subtle changes could also impact business investment in general \u2014 the removal of rules such as the “overtime rule” set to go into effect in December and other labor policies could also prove game changers for U.S. mining, manufacturing, etc.\u201d<\/p>\n
I personally believe that a Trump presidency will improve the business climate in the U.S., as production increases pick up on shore and fewer companies sit on the sidelines, holding investment decisions as they have done under President Obama, pending the spectre of further regulation and EPA oversight.<\/p>\n
Procurement organizations should pay close attention to environmental policy changes as Trump takes office and especially their potential impact on domestic manufacturing and local supply markets. Longer term, procurement teams may wish to keep offtake agreements in mind with domestic strategic supply partners that make new investments as a result of shifting environmental policies.<\/p>\n
Trade policy is more complicated than environmental policy. Trump ran as a populist, but what approach will he take in office? One indication is who advised him during the campaign. There is virtually no question that Dan Dimicco, former CEO of Nucor<\/strong>, will have President Trump\u2019s ear in terms of trade policy. Dimicco is a down-home guy who knows the domestic metals and manufacturing industry inside and out from a shop floor level \u2014 and he also went to Wharton.<\/p>\n Dimicco is much more at home with steel guys and those on the shop floor than Wall Street, but he is a numbers guy at heart. He can talk as both a philosopher and as an economist in articulating his case in attacking China trade policy and other countries and trading blocs that he believes have hurt and manipulated the U.S. economy and have taken jobs away based not on market fundamentals but government machinations and illegal trade activity. And, as mentioned, he\u2019s into the numbers to back it up<\/a>, especially regarding China.<\/p>\n