President Trump delivered his first major policy speech to a joint session of Congress on Tuesday and touched on many of the issues of importance to the equipment manufacturing industry.
“Equipment manufacturers are fired up, and ready to grow,” AEM President Dennis Slater said before the speech. “We are hopeful that President Trump’s remarks before Congress will offer a bipartisan roadmap toward renewed prosperity.”
So did Trump deliver the details? A quick breakdown is below:
Trump said: “To launch our national rebuilding, I will be asking Congress to approve legislation that produces a $1 trillion investment in infrastructure of the United States -- financed through both public and private capital -- creating millions of new jobs.”
The president’s continued push for lawmakers to approve a massive infrastructure package bodes well for the industry. But the mix of direct spending and tax credits for private investors who build new infrastructure projects remains unclear.
Trump said: “Right now, American companies are taxed at one of the highest rates anywhere in the world. My economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone ... Currently, when we ship products out of America, many other countries make us pay very high tariffs and taxes. But when foreign companies ship their products into America, we charge them nothing, or almost nothing.”
Trump’s words on tax reform hint that he may embrace a version of tax reform proposed by House Republicans that would cut the corporate tax rate, but also impose some sort of border-adjustment tax on imports. It will mostly fall to Congress to work out the finer details of this tax reform plan.
Trump said: “I believe strongly in free trade but it also has to be fair trade. It's been a long time since we had fair trade. The first Republican President, Abraham Lincoln, warned that the 'abandonment of the protective policy by the American government… will produce want and ruin among our people.' Lincoln was right -- and it's time we heeded his advice and his words."
The president’s invocation of Abraham Lincoln suggests that he will continue to advance his “America First” trade agenda. That statement stops short of promising to impose tariffs, though he has withdrawn from the Trans-Pacific Partnership (TPP) and has suggested he may revisit the longstanding NAFTA agreement between the United States, Canada and Mexico.
Trump said: “We have undertaken a historic effort to massively reduce job-crushing regulations, creating a deregulation task force inside of every government agency. And we’re imposing a new rule which mandates that for every one new regulation, two old regulations must be eliminated.”
Trump has acted quickly to undo some Obama-era regulations, most recently the onerous Waters of the United States rule. Trump has also signed executive orders to streamline permitting processes for infrastructure projects.
Ag issues were one of the policy areas most notably absent from Trump’s speech to Congress. While tax, trade, infrastructure and regulatory issues certainly affect Ag equipment manufacturers and farmers, Trump did not lay out any specific policies for rural America.
Trump still faces the challenge of navigating an aggressive agenda through Congress, where the pace of lawmaking may slow the new administration’s agenda.