WASHINGTON—Now that the election is over and Donald Trump has been declared the winner, the outlook for key issues in the fashion industry is taking shape, albeit still with a lot of uncertainty.
With European and Asian markets roiling this morning, all eyes will be on the U.S. stock market and economy.
Trump, who pulled a stunning upset victory over his Democratic rival Hillary Clinton, was elected with a clear political mandate—one of changing the entrenched establishment—and he will now try to unify the country and push an agenda that ranges from tax cuts to protectionist trade policies.
Republicans maintained control of both the Senate and House, which will be critical for the early success of Trump’s campaign agenda.
On the campaign trail, Trump released his “Contract with the American Voter” outlining several proposals that he said he will implement in his first 100 days in office.
For the fashion industry, a Trump victory likely means the end of the pending 12-nation Trans-Pacific Partnership trade deal, at least as it is currently written. Trump has said he will withdraw the U.S. from the sweeping trade deal and some believe he has left no wiggle room to reverse his position as president.
However, Trump could run into resistance from pro-trade Republicans in Congress, particularly if his trade policies trigger retaliation from U.S. trading partners.
The prospects for Congress taking up the TPP deal in a lame-duck session, slated to begin next week, appear slimmer with the Republican sweep but President Obama could still send implementing legislation to Capitol Hill and try push it through.
As Trump pivots to build his cabinet and fill key positions such as the Commerce Secretary, Treasury Secretary and U.S. Trade Representative, he will also seek to crack down on “foreign trading abuses.”
He plans to renegotiate NAFTA and withdraw the U.S. from the trade deal with Mexico and Canada if the two countries refuse to come to the table.
Trump has also vowed to label China a “currency manipulator” in the first 100 days, which would set in motion a process that could ultimately lead to sanctions against the country.
Experts aren’t counting out a potential trade war with China if such a move occurs, as well as with Mexico, stemming from Trump’s threats to impose high tariffs on imports from both countries.
Millions of undocumented immigrants are set to be deported under Trump’s plan and construction on a massive wall between the U.S. and Mexico will begin. Immigrants from regions he deems “terror-prone” where vetting cannot be conducted safely will not have access to the U.S.
He will also fight for laws to simplify the tax code, including a key positive for retailers in lowering the corporate tax rate. He will establish tariffs to discourage companies from laying off workers and moving offshore; seek to repeal Obamacare, the sweeping health care law, and replace it with health savings accounts; and embark on a major infrastructure overhaul, by offering tax incentives to generate $1 trillion in infrastructure investment over 10 years.
Trump also intends to shake up Washington in the early days. He has vowed to propose a Constitutional amendment to impose term limits on all members of Congress, impose a hiring freeze on all federal employees to reduce the federal workforce, eliminate dozens of federal regulations rolled out under the Obama administration and impose lobbying bans on former White House officials.
Initial reactions from industry officials were mixed.
David French, senior senior vice president for government relations at the National Retail Federation, said Trump should have “a lot of leverage in Congress to execute his agenda.”
But he said that agenda is still unclear.
“He has spoken about immigration in terms of building a wall and maybe even deporting people,” French said. “He has a tax plan that we actually would benefit under. I think that is a hopeful sign for the retail industry and for the economy. I think he going to embark on regulatory reform but he hasn’t been terribly specific what all that is going to look like.”
“If he can execute on lowering the corporate tax rate, that’s a big win for the business and retail community,”French said.
On trade, however, some of Trump’s proposals have generated concern.
French said retailers will need to spend time “unraveling the inconsistencies” of Trump’s trade agenda. He said the pledge to label China a currency manipulator could spark a trade war but he also noted that Trump could pivot from some of his anti-trade rhetoric on the campaign trail once he is in the White House and has to govern.