“Mr. Trump, You’re Hired!” – Immediate Impact of Trump Presidency on Small Businesses

As with any answer you might receive from an attorney, if you ask for a definitive answer as to the impact of one event on another event you will likely hear the dissatisfying response, “It depends.” In the wake of a tumultuous presidential political cycle and the historic way in which now Mr. President-Elect Donald Trump prevailed, business owners, managers and investors are left with the same query, “How will a President Trump affect my future growth and profitability?”. Answers are unique to individual industries and businesses, but there are some basic ways in which a President Trump will have a general impact on business. However, let us clearly understand that much of what follows will assume that campaign platforms will relatively correlate to actual future policies, and that Mr. Trump’s past business experience will particularly inform his pursuit of future policies.   Campaign Indicators Mr. Trump often declared that he would quickly erase President Obama’s lasting impact. The simplest way in which this will occur would be to unwind many of the Executive Actions. For those unfamiliar with US legal systems, this power is a means whereby the President can go around the Congress in order to accomplish certain tasks and enforce (or not enforce) certain policies. To be clear, all presidents have wielded this power, but President Obama’s efforts have been legally challenged as exceeding his authority and some of those legal disputes have ruled against President Obama. If these executive actions are overturned or replaced, some of the companies most likely to be impacted would include: (1) Companies providing products or services to the US through federal contracts (2) Companies engaging in international import/export (3) Telecommunications companies installing or maintaining broadband networks (4) Clean energy companies (5) Health care companies In addition to reversing some of President Obama’s Executive Actions, a President Trump would likely also enact a series of his own executive actions intended to advance certain agenda priorities that would impact employer wages, healthcare coverage and international business.   Business Investment and Immigration As a U.S. attorney, I work with a lot of businesses and investors from Europe and Asia regarding moving their companies to the U.S. and exploring some of the strategies in those decisions. Currently, there are certain tax rules and business rules that limit the kinds of investments foreign businesses and investors own or may carry a premium tax on certain transactions related to the sale of those business or investment interests. With careful planning, even in the current legal climate, a business can avoid these issues. Ultimately, it is unclear if Mr. Trump will seek to attract foreign investment or make it more difficult to accomplish. However, based on his own prior business experience, I believe that if he does address foreign investments, he will make things more streamlined for businesses coming from Europe and more difficult for those coming from Asia and the Middle East. As a lawyer, I spend a lot of time working with foreign businesses and investors regarding the steps to take to open new offices in the United States. This process involves setting up the proper legal structure, applying for the proper work authorizations and providing counsel regarding business expansion and potential tax issues for US operations. Mr. Trump will, if anything, make improvements to this process to make it more streamlined. However, while the process is typically simple, that does not make it cheap and some of these strategies require months of advanced planning to achieve.   Take Home Message Dispensing with the gloom and doom hyperbole, if your business interests involve entering into the U.S. market to expand operations, invest money and build infrastructure, I would predict that the business climate for such endeavors will become less regulated, easier to access and return increased profits. One caveat remains, however, that if your business in the U.S. is intended not to create companies, investments and permanent jobs in the U.S. but solely to export US capital, then a Trump presidency may become more taxing on the bottom line and unpredictable regarding potential regulations. Should you have any particular follow-on queries, please feel welcome to email me at [email protected].   Joshua Irvine has worked as legal counsel to a wide range of companies from large international companies such as eBay down to single person start-up companies.  He works with companies in England, Ireland, Germany, France, Italy, Spain, India, Hong Kong and the United States.  He grew up in Germany, lived in West Yorkshire, England for 2 years and currently live in the United States though he frequently travels to meet with clients.