How Trump’s New Trading Policies Will Affect Your Small Business


At the beginning of any new Presidential administration, there are going to be growing pains. No presidential campaign in history was as tumultuous as President Trump’s victory last year. Now settled into the oval office, President Trump has made it his goal to follow through on his claims on the campaign trail. This has many Americans waiting with baited breath to see how his changes will affect their daily life – and in the case of business owners, how it will affect their bottom line. Being a businessman himself, Trump has always championed making life easier for the businesses of America. He’s started by making waves in the international trade sector. Here’s how his most recent proposals for change could affect your small business.

Trans Pacific Partnership

One of President Trumps promises was to back out of what he deemed the most virulent partnership America was to be involved in, The Trans Pacific Partnership (TPP). The deal, which is an agreement between 12 countries surrounding the Pacific ocean, was heralded as a way to open up new trade in Asia, standardize pricing, and ensure the countries involved all adhered to pricing and labor standards. America already trades with the 11 countries in the TPP and staying out of the deal (which both high level GOP and Democrats opposed) may not be as detrimental as critics say. In regards to the TPP, the New Yorker reported that, “Both proponents and detractors exaggerated the effects of the TPP, the impact of which was always going to be modest in measurable economic terms.” But the fact that America would have been the flag bearer would have forced countries (both part of and not part of the pact) to try and stay in the US’ good books. The main worry is this new era of ‘protectionism’ could make trade wars flare up with countries that the TPP would have benefitted greatly like Vietnam. In addition, Trump’s vow to punish China (who was excluded from TPP) and Mexico with new tariffs of 35 percent and 45 percent respectively could make things very hard for businesses who import materials from these countries.

Border Adjustment Taxes

The next major change Trump is tackling are Border Adjustment Taxes, most often in the form of Valued Added Tariffs (or VATs). Border Adjustment Taxes focus on ensuring import from foreign businesses are taxed, and that American businesses who export goods are not (as opposed to the opposite which is occurring now).

This falls into the “America First” mindset and implies which implies American businesses should not be penalized for exporting their goods while companies whose goods are imported to America are able to walk through an unlocked door. Many European Union countries rely heavily on VATs to level the playing field and avoid double-taxing by putting the onus on the consumer. For an American company like yours, these changes could end up putting huge amounts of money back into your pocket. But on the other hand, they could also strong-arm foreign companies to raise prices on their goods to offset the charges they face. Do you import resources from Japan to create your product or render your service? If these changes are instated, you may just get a larger bill.

Taxation Policy

One of the biggest changes Trump is proposing is the change in taxation policy for businesses. Although there have been business tax changes in the past, they often focused on large corporations and missed the mark on “pass-through companies” (i.e. partnerships, S-Corporations, Limited Liability Companies). Trump is planning on cutting business taxes by huge margins, and according to Fortune, “[The businesses] would also have a top tax rate of 15 percent.” These cuts could inject huge amounts of money back into American businesses, which in turn would allow for reinvestment in job creation and finances for expansion abroad. When companies are not held down by high levels of taxation, everyone in the ecosystem benefits and the business is able to loosen their belts a bit instead of scrambling to make ends meet.

Trump is a new era for the oval office. Only time will tell if his proposed changes will benefit or hurt American businesses long term, but it seems he is approaching his presidency with business in mind. For SMB owners like you, this could turn out to be a positive thing for your bottom line, so long as the benefits outweigh the dissent it’s likely to create abroad.

Dante Berardi Jr.

Dante Berardi Jr.

Dante Berardi Jr comes to Hubba from a background in content creation and grant writing for musicians and artists. A writer/musician himself, Dante has a thirst to consume words and the stories they create when pieced together. He sleeps too little, reads too much, lives on coffee and will talk your ear off about vinyl.
Dante Berardi Jr.