President-elect Donald Trump is set to return to the White House in just a couple months, bringing with him a return to the governing style of his first term.
For businesses, that’s a mixed bag, given his wide range of promises. He has pledged to slash their taxes while simultaneously hitting them — and their customers — through tariffs on foreign imports. On the other hand, Trump and his key allies — including the wealthiest person on the planet — are likely to tackle burdensome government regulations, as he did in his first term, particularly when it came to agriculture and the environment.
But looming above it all is a president who has often blasted individual companies — and people — that he disagrees with, from John Deere to Boeing. That criticism has sometimes veered toward threats against company executives and political figures.
A second stab at slashing regulations
A Trump administration 2.0 is expected to have some big bright spots for corporations — namely, those bristling under the weight of government regulations.
During his first term in office, Trump added annual net regulatory costs of $10 billion, down from $43 billion under former President George W. Bush and $111 billion under former President Barack Obama, the American Action Forum said in 2021. The government eliminated $198.6 billion in overall regulatory costs between 2017 and 2020, with agencies issuing 538 deregulatory actions and 97 “significant” regulatory actions.
While many of those actions were later withdrawn or struck down, some companies and executives hope Trump will pick up where he left off, saving them money and time. Tesla (TSLA) and SpaceX CEO Elon Musk is likely to have a major role in this through a proposed Department of Government Efficiency, which aims to slash about $2 trillion in federal spending and tackle what businesses see as overregulation.
“We can expect the Silicon Valley ‘move fast and break things’ strategy to be applied to what Trump and Vance call ‘the administrative state,’” said Rob Lalka, a professor of practice in management at Tulane University and the author of The Venture Alchemists: How Big Tech Turned Profits Into Power.
Lalka pointed to the plethora of Silicon Valley elites who campaigned on Trump’s behalf, including venture capitalists Jon Lonsdale and David Sacks, as well as Vice President-elect J.D. Vance, who was himself a venture capitalist before joining Congress. The next administration will likely cut regulations on areas key to the tech industry, such as cryptocurrency mining, and hasten the process for permits related to nuclear energy, which companies expect to fuel artificial intelligence data centers.
It’s not just Silicon Valley hoping for looser regulations, especially when it comes to mergers and acquisitions. Key antitrust officials, including Federal Trade Commission chair Lina Khan, are expected to be removed from their posts.
Wells Fargo (WFC) said on Wednesday that a Trump White House would be a “regulatory game changer” for the banking sector, meaning “more free markets, less harsh oversight,” and less regulatory risk. A change of the guard in the government’s antitrust divisions could also be good news for the media industry, given officials’ concerns over consolidation.
“It’s too early to tell, but it may offer a pace of change and an opportunity for consolidation that may be quite different, that would provide a real positive and accelerated impact on this industry that’s needed,” Warner Bros. Discovery (WBD) CEO David Zaslav said Wednesday on an earnings call.
The trouble with tariffs
Just days after Trump won the election, his advisers are already working on enacting his promised massive tariffs.
Staffers close to his team are meeting with Missouri House Republican Jason Smith, who chairs the chamber’s Ways and Means Committee, about a tax package partially paid for by tariffs, Politico reports. They’re considering including tariffs through what’s known as budget reconciliation, a legislative procedure that would require a simple majority in both the House and Senate, allowing them to bypass the need for Democratic support.
There’s just one problem: Tariffs don’t really generate much revenue.
Over the past 70 years, tariffs have never accounted for “much more” than 2% of total federal revenue, according to the Congressional Revenue Service. The individual income tax raises 27 times as much revenue as current U.S. current tariffs. Replacing that, as Trump has suggested, would require 69.9% tariffs on all imports, the Tax Foundation said in June.
On the campaign trail this year, Trump proposed raising duties on imports from China by as much as 50%, to 60% in total, while adding duties of 10% to 20% against products from the rest of the world. He’s also talked about a “100% tariff” on countries that “leave” the U.S. dollar and tariffs of as much as 2,000% on foreign-made vehicles.
Read more: The truth about Trump’s tax and tariff plans
Trump’s tariffs could, by some estimates, add between $1,700 to $7,600 in annual costs to American households and outweigh the effects of any tax cuts he’d institute for 95% of American households. The National Retail Federation (NRF) expects consumers to lose between $46 billion and $78 billion in annual spending power because of Trump’s proposed tariffs.
That’s partially because businesses are expected to largely pass along the cost of the duties, which are expected to make the cost of goods produced along key supply chains more expensive for a variety of industries. Toyota Motor Co. (TM) executive David Christ said on Wednesday that tariffs might hit a lot of the parts that make up a vehicle, driving up its cost.
“Retailers rely heavily on imported products and manufacturing components so that they can offer their customers a variety of products at affordable prices,” Jonathan Gold, the NRF’s vice president of supply chains and customs policy, said in a statement. “A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter.”
The revenge candidate
There’s also the matter of potential retaliation from Trump and his allies against business executives and others who advocated against him.
As Politico reports, Trump has threatened revenge against a number of people, such as California Democratic Rep. Nancy Pelosi. And while their relationship is a little cozier these days, the former president had threatened to throw Meta chief Mark Zuckerberg in jail as part of Trump’s lies about election fraud.
In 2019, Amazon (AMZN) sued the federal government after it lost a lucrative contract known as JEDI to Microsoft (MSFT). That $10 billion deal was later canceled during the Biden administration. Amazon argued at the time that Trump had launched “behind-the-scenes attacks” against it, pointing to his criticism of founder Jeff Bezos, who owns The Washington Post. And the e-commerce giant alleged Trump ordered his defense secretary to “screw Amazon.”
The company also cited his alleged interference in a $400 million contract awarded to Fisher Industries in 2019, as well as his reported interference in the solicitation of bids to move the FBI’s headquarters to a new campus. Donald Trump Jr., who is helping his father’s transition, and other Trump supporters have threatened to revoke Deloitte’s government contracts after an employee’s correspondence with Vance was leaked.
“I — and many others — raised alarms about the anti-democratic actions Donald Trump took during his first Presidency, and has promised to take this next time,” LinkedIn co-founder and Democratic donor Reid Hoffman wrote on Wednesday, adding that he hopes Trump won’t “seek to punish” opponents or “corruptly play favorites in business.”
USA Today reports that many Trump allies are playing down the idea that he will take meaningful revenge on any of his opponents. Several of them pointed to his lack of follow-through on jailing his 2016 rival Hillary Clinton, while others say his ultimate retribution would be a successful term in office with a solid economy.
“What he wants to achieve is challenging, is daunting,” said John Boyd, principal of The Boyd Company, a consultancy firm that works with companies like Boeing (BA) and Dell (DELL).
Citing what ultimately proved to be empty threats of retaliation against Clinton, Boyd added: “This notion of retaliation is a distraction that I don’t think he’s going to bother with.”