Donald Trump is returning to the presidency in 2025, and with him will come a series of changing policies and economic directions.
NJBIA takes a look at how these different approaches could impact New Jersey businesses in the coming years.
CORPORATE TAXES
According to the Tax Foundation, Trump had promised to cut the federal corporate tax rate to 15% from its current 21%, which would rank as the sixth largest tax cut since 1940.
And because both chambers are likely to be controlled by Republicans, the required congressional approval of the tax cut is likely to be simpler than the recent D.C. gridlock.
A cut in the federal corporate tax rate will be most welcomed by New Jersey businesses, which continue to pay a state rate of 11.5%, by far the highest in the nation.
But then, New Jersey Democrats saw the recent corporate tax cut under Trump as an opportunity to “temporarily” raise New Jersey’s CBT rate — though it doesn’t seem so temporary anymore.
“And that still remains a concern going forward,” said NJBIA Chief of Government Affairs Christopher Emigholz. “The thinking was, ‘Well, let’s tax our businesses more because they can afford it thanks to a federal tax cut.’
“But that’s a very narrow lens to look through when you look at how we compare competitively with other states, not just on corporate taxes, but all business taxes. We do not compare well to other states that would all see the same benefits of the federal rate cut and thus still have the same competitive disadvantage.
Earlier this year, in the fight against Gov. Phil Murphy’s 11.5% corporate tax hike, NJBIA detailed in a video recent examples of businesses who have either left, cut jobs or decided to grow elsewhere due to New Jersey’s competitive levels.
“We’ve seen even more job cuts or examples of New Jersey-based businesses growing elsewhere since the governor approved the CBT increase,” said NJBIA President and CEO Michele Siekerka.
“So while a lower CBT rate nationally would be good news for New Jersey business, it’s important that our policymakers don’t raise the state rate again with the misguided mindset of ‘Well, they can afford it’.
“We have one of the highest unemployment rates in the country, although not historically high. But as we have often said and as has been proven, a large employer will move or grow where it can be most profitable or have the best chance of being successful.”
FEE/ PRODUCTION
There is generally a wide chasm for the perception of tariffs in the economy.
President-elect Trump campaigned on raising tariffs of up to 20% and up to 60% on goods made in China to make US manufacturing healthier and more competitive.
However, many economists contend that the tariffs will increase inflation for American consumers and businesses.
“Typically, tariffs are paid by the companies importing the goods, not by the countries that are assessing the tariff,” Emigholz said. “So there could be situations where a U.S. or New Jersey manufacturer is buying products from abroad that may be part of a product they’re making, which would increase the price of the product when it’s sold.”
However, there is the historical advantage of tariffs that protect domestic producers and help deter foreign countries from unfair trade practices.
And it’s also difficult to paint the impact – positive or negative – on all manufacturers with a broad brush. Smaller producers, it seems, may be more challenged by transition costs. Larger manufacturers, it is also thought, may find the tariffs an opportunity to rebuild their supply networks.
The New Jersey Manufacturing Expansion Program, for its part, believes that “widespread tariffs are not conducive to growing manufacturing in New Jersey,” according to its CEO Peter Connolly.
National Association of Manufacturing CEO Jay Timmons told CNBC this week that the success or failure of increased tariffs under Trump will depend on “how they are implemented.”
“Whether they are targeted for specific items that are related to certain issues like the first phase of China’s trade agreement that was negotiated in 2020, whether it is aimed at international theft of property or other issues such as dumping or subsidization, then that might be too much. meaningful to producers in a positive way.” Timmons said.
“If they are broad-based, they could raise the cost of doing business here in the United States, which would, of course, lead to more inflation and not be good for consumers.”
In either case, the tariff increases will most likely come as Trump does not need a green light from Congress to implement them.
ENERGY POLICY
Less than six months into his first presidency, Trump pulled the US out of the Paris climate accord.
So rollbacks of clean energy policies are expected, especially since he advocated maximizing oil and gas production during his campaign. The sharp decline in clean energy stocks after he was declared the winner of the election this week would also be a worrying indicator for the industry.
But stopping or slowing the clean energy transition, which New Jersey fully supports, may not be so simple, as NJBIA maintains its own energy policy above all else.
“The Inflation Reduction Act, signed into law by President Biden, guarantees billions of dollars in subsidies for solar and wind energy for another decade,” said NJBIA Vice Chief of Government Affairs Ray Cantor. “That money is already flowing.
“And while the Inflation Reduction Act can be amended, it cannot be repealed.”
Part of those changes, however, would almost certainly be the end of federal tax credits for those who buy electric vehicles. In New Jersey, that state benefit disappeared this year, making EVs less affordable for those interested.
At the same time, New Jersey is maintaining a mandate that no new gas-powered cars be purchased in the state until 2035.
Cantor said he hopes that under a Trump presidency there may be more acceptance of alternative fuels, which the Murphy administration has been slow to embrace in favor of all-electrification policies.
“Interestingly, those in the oil and gas industry also benefit from tax credits that come from things like carbon capture, advanced biofuels and hydrogen,” Cantor said.
“The one thing that we would hope that President-elect Trump could remain is the need to improve our network. Regardless of what energy source we’re using, regardless of the speed of the energy transition, we’re going to need more electricity.”
While campaigning in Wildwood last May, Trump called New Jersey’s offshore wind industry “terrible” and “the most expensive energy there is.”
But whether he can stop current projects from moving forward off the Jersey Shore remains to be seen.
Conceivably, the next administration could redirect the Bureau of Ocean Energy Management’s priorities away from offshore wind permits and toward oil and gas leases.
Another method could be to not defend lawsuits by offshore wind opponents who are challenging federal permits.
“It is still our hope and our position that wind projects can have a place as part of our overall energy future and planning,” Cantor said. “We look forward to working with and providing input to the Trump administration as we continue to advocate for a diverse energy portfolio that is practical, affordable and achievable.”
LABOR LAWS
While Trump made repeated calls for organized labor on the campaign trail, it’s a safe bet he won’t seek the ambitious jobs agenda sought by the Biden administration — which included banning most non-compete agreements.
But like the corporate tax situation, Trump’s more pro-business policies could lead to more pro-jobs policy efforts in New Jersey in Gov. Phil Murphy’s last year and under the current legislative leadership.
For example, NJBIA and other business groups have been successful in holding back a so-called “heat” bill that would have hindered the ability of New Jersey businesses to operate in hot weather.
Over the summer, the US Occupational Safety and Health Administration (OSHA) proposed a federal rule to address heat in the workplace, making a New Jersey state law less necessary or less likely.
But now that federal rule is at risk with Trump’s return to the White House.
“In the absence of federal regulations regarding workplace heating under the Trump administration, we would expect another push from supporters of the New Jersey bill,” Emigholz said.
“That’s not to say we haven’t had constructive conversations with New Jersey’s ‘heating bill’ sponsors, because we have, and we’re grateful to have those ongoing conversations. But this is just one possible example of when a federal regulation gets sidelined and there may be a legislative effort at the state level to fill a perceived void.”