What it means for Washington

 Donald Trump
President Donald Trump will be pushing some new labor and business policies in office.
Now that Trump is in office, it’s been difficult to ignore the headlines and controversy he creates daily. The other consistent within the administration has been President Trump’s loyalty to the tenets he trumpeted during his campaign, including themes of “America First,” “Drain the Swamp,” “The Forgotten Man and Woman,” reducing debt, tax reform and putting less focus on Washington.


“It’s been said that if you want to shock people in Washington, the best way to do it is to do exactly what you said you were going to do when you ran,” Elving said, noting the commitment is evident, but the action is moderated by the system already in place

The ideas the new president pushed forward on the first day in office and the ensuing executive orders have collided with reality and the results have produced anything but a seamless transition. Trump-triggered travel bans, widespread protests and clashes with intelligence officials and the media as well as feuding in the White House have stymied some of the administration’s initial goals, Elving pointed out. The system of checks and balances including holding hearings and gaining approvals of committees are forcing the new regime to tap the brakes, including efforts to immediately repeal Obamacare.

“Even if you know what you want to do you still have to walk through all those dance steps,” Elving said. “There’s really no short circuiting them.”

As for Obamacare, after seven years since its implementation, any new solution will require addressing the needs of more than 25 million people currently covered and Elving concurred with the new President’s recent assessment that implementation will take time, and likely will overlap into 2018 to address the details. More immediately, Elving said to expect significant battles over budgets and how to approach the national debt in the coming months. Tax reform is another looming issue as the last reform was in the late 1980s, under President Ronald Reagan. Now that the issue is on the agenda again, Elving pointed out that the challenge is in “coming up with enough money so that you get the good part but not the bad part,” as interest rate adjustments will surely be a by-product of reform policy.

For businesses, under the Trump Administration, “you will see employer-oriented labor policy under the new labor department,” Elving said, which likely will not mean a push for a higher minimum wage or expansion of the Family and Medical Leave Act. Meanwhile, businesses should expect to see efforts to push corporate tax rates down toward the target rate of 15 percent. Elving said the chatter in Washington is that target will likely be replaced with a more realistic goal of 20 percent to 25 percent. As part of this effort, he said there is a possibility of an energy tax being implemented; shifting to a consumption tax and possibly eliminating estate taxes for the majority of Americans.

In terms of trade policy in North America, considerations include incorporating a border adjustment tax of 20 percent for all products that cross the border, including agricultural products and would apply to exporting food to Mexico or Canada, which could well result in retaliatory taxes by those countries.

“The President has essentially said we are getting out of NAFTA (North American Free Trade Agreement), we’re going to renegotiate NAFTA,” and he has proposed a veto of the Trans-Pacific Partnership (TPP).

As for what all the changes proposed by the new administration means for agriculture, the nomination of Sonny Perdue as the US Secretary of Agriculture by President Trump is significant.

“He is, in a sense, a Farm Bureau secretary,” Elving said, pointing out Perdue grew up on a Georgia row farm and was later a part owner in several agribusiness companies.

“He has your basic interests at heart and he is the kind of person that theoretically, you can always talk to,” according to Elving, and given his ties to Congress and being known for speaking the language of Capitol Hill, Perdue should be an effective bridge between Congress and the White House.

He added that Perdue’s role will be critical to avoid a trade war as TPP represents $4.4 billion in agriculture trade and renegotiating NAFTA represents $38 billion in ag exports to Mexico and Canada. Elving pointed out that among the 11 other trading partners that are part of TPP, “we have bilateral relationships with most of those countries, however trade negotiations with Japan could be more complex and may need to involve a joint deal versus a one-on-one agreement. 

He also stated that when it comes to immigration reform, Perdue is a good candidate to speak up on behalf of the meat industry. Especially in meat processing plants, where the core of the workforce are collectively growing uneasy about the prospect of deportation under the new administration, “you’re going to have to rethink your position,” Elving said, adding that enforcement efforts to identify illegal workers in this segment is essential. 

Another issue facing the new administration is the pending Food and Drug Administration menu labeling requirements that were shoehorned in as part of Obamacare, but its implementation was delayed, first to December 2016, and more recently to May 5, 2017. Elving pointed out, however, that implementing any menu labeling requirements may well fall under one of President Trump’s very first executive orders that mandated any new regulation could be challenged if it places any burden on business. “I have a sense that is going to come up with this Congress,” he said.