Donald Trump’s Potential Return to Office May Reshape U.S. Business Landscape

If Donald Trump secures the White House in the upcoming U.S. presidential election, significant shifts may unfold across several American industries, influenced by his cabinet picks and policies, including a prominent role for Tesla’s Elon Musk. Below are some key areas to monitor:

Musk’s Role in Government Efficiency

In response to Trump’s consideration, Elon Musk, CEO of Tesla, might be tapped to lead a commission aimed at enhancing government efficiency. Musk has claimed that federal spending could be trimmed by up to $2 trillion, affecting how government oversight may function in the future. Questions remain as to whether “efficiency” will mean deregulation, as Musk has previously criticized regulatory hurdles facing his SpaceX operations. Fewer restrictions might benefit Musk’s ventures in self-driving cars and aerospace.

Still, Trump and Musk may diverge on issues like electric vehicles. Trump opposes California’s aim to mandate electric-only vehicles by 2035, while Musk’s Tesla thrives as the world’s most valuable electric vehicle company. “A rising tide raises all boats,” noted James Chen, a former policy head at Rivian and Tesla, adding that if Musk can prevent the Trump administration from undermining electric vehicles, the sector would benefit. However, how Musk would reconcile potential conflicts of interest given his expansive business interests remains uncertain.

Trump has expressed intent to position himself as a “crypto president,” potentially ousting Gary Gensler, the SEC chair critical of the crypto industry. His replacement could ease regulatory scrutiny for crypto firms like Coinbase, Binance, and Kraken, while Musk, a crypto supporter, aligns with Trump on this front. Notably, figures like Marc Andreessen and soon-to-be Vice President J.D. Vance share Trump’s favorable stance on digital assets.

Musk’s enthusiasm for clean energy, paired with Tesla’s focus on solar solutions, stands in tension with Trump’s climate goals. While Musk’s enterprises are driving advancements in renewable energy, Trump has vowed to dismantle Biden’s climate law, the Inflation Reduction Act, and end offshore wind projects. Yet, support from Republicans and oil stakeholders, who benefit from the act, suggests Trump may face internal resistance. Musk has capitalized on red state investments by expanding a Texas-based Tesla factory, underscoring the act’s bipartisan appeal.

Tariffs and Trade Policy

Trump’s proposal for a 10% tariff on U.S. imports and a 60% tariff on Chinese goods could reshape the economic landscape. The Tax Foundation estimates the plan would amount to $524 billion annually, shrinking GDP by 0.8% and potentially eliminating 684,000 jobs, largely impacting retail, the nation’s largest private sector employer. Trump has also floated the possibility of a 25% tariff on Mexican imports.

According to the National Retail Federation, tariffs could reduce consumer spending by $46 to $78 billion annually, with industries like apparel, toys, and electronics among the hardest hit. Some retailers may shift their production from China to Bangladesh, India, or Vietnam to cope, though Walmart and Target face heightened supply chain costs. However, supermarkets such as Kroger, which source minimally from China, could benefit. Logistics experts foresee a brief spike in shipping demand before potential trade downturns from such tariffs.

Tariffs may hit tech too, as Trump criticized the U.S. CHIPS Act, which subsidizes domestic semiconductor production, suggesting tariffs on imported chips instead, particularly from Taiwan’s TSMC. Renewable energy industries would also feel the pinch, as many rely on Chinese components. Bernstein Research analysts predict tariffs could raise costs for U.S.-based solar and storage projects, noting, “Trump actions without Congressional backing could include import tariffs of 10-20% (excluding China) and 60%-200% on Chinese goods.”

China’s response could exacerbate the impacts. China, a top importer of U.S. agricultural products like soy and pork, diversified its suppliers after Trump’s initial tariffs. If Trump reintroduces a 60% tariff on Chinese goods, Beijing might further reduce U.S. farm imports, possibly affecting the agricultural sector.

Energy: Pro-Oil Agenda, Anti-Iran Stand

Already the world’s top oil and gas producer, the U.S. may see further expansion if Trump lifts the freeze on new liquefied natural gas export permits and ramps up pipeline development. Trump’s support could also ease some environmental restrictions affecting fossil fuels, though his opposition to the Inflation Reduction Act could shift as oil companies gain funding for initiatives like carbon capture.

However, Trump’s stance on foreign oil rivals may prove unpredictable. Ed Hirs, an energy expert from the University of Houston, anticipates Trump may ease sanctions on Russian energy but continue restrictions on Iran. Analyst Jesse Jones of Energy Aspects expects Trump’s “maximum pressure” campaign could reduce Iranian oil exports by a million barrels per day.

Labor Unions and Workforce Dynamics

Under President Biden, unions gained ground, with Biden himself joining a picket line with U.S. auto workers. Trump, while generally opposing unions, has attracted significant support from blue-collar voters. Anthony Miyazaki, a professor at Florida International University, believes Trump might prioritize their needs to maintain this support, despite having rolled back worker protections during his first term. Union gains achieved at companies like Amazon and Starbucks might be at risk if Trump’s labor policies echo his previous administration’s stance.

Banking and Financial Regulation

Banks such as JPMorgan and Goldman Sachs are likely to benefit from less stringent regulatory pressures under Trump. Appointments of business-friendly Republicans to key regulatory positions could relieve banks from strict capital requirements and fees associated with mergers and acquisitions. However, potential inflationary pressures from tax and trade policies might counterbalance these benefits by pushing interest rates higher.

Antitrust and Technology Regulation

In technology, Trump may take a less aggressive stance on antitrust measures than Biden. He could relax Justice Department actions targeting major tech firms like Google, potentially preferring settlements to litigation. Supporters in Silicon Valley, including investors like Peter Thiel and Andreessen, advocate reduced oversight of emerging technologies, which aligns with Trump’s views. The departure of Lina Khan, the Federal Trade Commission Chair, seems probable if Trump takes office.

Media Regulation and Freedom of Speech Concerns

During his campaign, Trump urged the Federal Communications Commission (FCC) to revoke ABC and CBS broadcast licenses, raising free speech concerns. Tom Wheeler, a former FCC Chair, emphasized that these actions could threaten the independence of regulatory bodies. Trump’s proposal to place the FCC under presidential authority, invoking “national security,” has prompted free speech advocates to voice alarm. However, Trump’s return to the White House could boost viewership for networks like CNN and Fox News.

Pharmaceutical Policies and Vaccine Oversight

Trump’s recent consideration of Robert F. Kennedy Jr. to advise on vaccine policy raises concerns, given Kennedy’s controversial vaccine views. Trump co-chair Howard Lutnick indicated that while Kennedy may not lead health agencies, he could influence vaccine-related decisions. Jeremy Levin, CEO of biotech firm Ovid Therapeutics, cautioned that Kennedy’s vaccine skepticism poses significant risks. “Vaccine denialism…is perhaps as dangerous as anything you can imagine,” Levin said, fearing potential harm to U.S. health standards.

In sum, Trump’s potential return would impact sectors from clean energy to labor, finance, and media. His economic, trade, and regulatory policies, alongside key cabinet appointments like Musk, will likely shape the next chapter for American business.