“Steel Stocks Put the Pedal to the Metal” he said Wall Street Journal declared a few hours after Donald Trump’s election victory. Shares of US Steel, Nucor and Steel Dynamics all rose in early trading. It was an eerie, almost exact repeat of what had happened after Trump’s surprise victory eight years earlier. Then as now, investors poured into the same steel companies, hoping that relief had finally come to a struggling Rust Belt industry.
But what happened last time is a warning to investors, business leaders and the incoming Trump administration. Those steel stocks that were so encouragingly dumped eight years ago continued to rise for some time; US Steel shares more than doubled. However, within three years, with the new steel tariffs in place, America’s major steel stocks had lost all their gains and were trading below where they had been before the election.
The steelmakers’ saga is a microcosm of Trump’s record with American business during his first term. All the major issues then – tariffs, immigration, taxes, regulation – are front and center now. As he staffs his administration and strategizes what action to take when, much depends on the lessons he learned from his first-time presidential experience.
It was a story of extremes. The CEO’s confidence, as assessed by the Conference Board, rose with his election, but three years later it had sunk to depths not recorded since the worst days of the financial crisis. Small business owners cheered when Trump won, but their optimism, polled by the National Federation of Independent Business, began to decline sharply two years later. By late 2019, hundreds of industry associations, from the tiny American Down and Feather Council to the large National Retail Federation and US Chamber of Commerce, representing thousands of companies, were publicly opposing his policies on trade, immigration or both.
The explanation for such a rise and fall is that Trump’s greatest blessings for business were loaded. He promised American businesses that he would lower their taxes and reduce regulation, and he delivered on both promises in his first year. Regulatory relief happened quickly because it is largely under the control of the executive branch. The public barely noticed, as most business regulation is incomprehensible outside the industry and plays off the radar. But CEOs noticed right away. Regulators became less adversarial. Obtaining permits and approvals was faster and easier. A CEO said wealth“The change in attitude was evident.”
A repeat in 2025 is likely, especially since the Biden administration has set a record for the regulatory burden imposed on the private sector. So says the American Action Forum, a center-right think tank that calculates regulatory costs. Total under Biden so far: $1.8 trillion. Under Trump: $65 billion.
Tax cuts were much more difficult, achievable only because Republicans held majorities in both houses of Congress. The result was a once-in-a-generation tax reform notable for lowering the corporate tax rate from 35% to 21%. Several key provisions, including that, are scheduled to expire at the end of 2025 unless Congress acts, so Trump will spend most of his first year in office on taxes, as he did in his previous first in office. The outcome depends heavily on which party controls the House of Representatives, which is undecided as of this writing.
Trump’s first year looked like a home for business. It stopped cold in early 2018 when it launched a trade war against China, Mexico, Canada and Europe. The war started small and escalated through head-to-head vendettas that neither side was willing to stop. As tariffs rose around the world, supply chains had to be reworked. Uncertainty grew; global growth fell. America’s steelmakers also suffered, as rising trade barriers dampened demand globally.
Notably, President Biden has kept most of Trump’s tariffs, raised some and added more.
Trump’s other high-profile policy, curbing immigration, also hurt business. Large industries, especially agriculture, hospitality and construction, rely heavily on immigrants for employees. Silicon Valley tech companies want to hire immigrants with PhDs; the entire US tech sector is unimaginable without immigrants. The number of immigrants entering the U.S. fell to the lowest in more than a decade, which American business generally hated.
The lessons from Trump 1.0 are clear. American business likes tax cuts and easier regulation (not surprisingly), but opposes drastic anti-immigration policies, and as for tariffs — some companies will want tariffs imposed on foreign competitors, at least initially. but business in general hates trade wars. The tension is palpable: Reducing immigration and the trade war were the cornerstones of Trump’s successful 2024 election campaign.
So what will he do? Will he stick with his campaign themes and let American business take care of itself, knowing he won’t be running for president again? Or will he focus on his legacy and try to finish his term with a strong economy? Predicting Trump’s actions is especially difficult because he keeps his cards close to his vest. “I don’t want people to know exactly what I’m doing or thinking,” he wrote in his 2015 book. Crippled America. “I like to be unpredictable. It keeps them off balance.”
Trump’s first term shows how his most successful policy themes are important issues for business leaders. They must prepare to spend four years off balance.
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