The long and bumpy road to the new Trump economy

What a roller coaster we have been on since President Trump’s inauguration! Democrats are up in arms. Republicans are cheering. Agencies are being shut down. Regulations are being rolled back. Tax cuts are looming. Government pork is being slashed.

Our president is a businessman, and he's certainly been getting down to business over the past few weeks.

So this is good for business, right?

Maybe in the long term. But right now, Trump is creating more headaches for businesses of all sizes. And I’m not expecting these challenges to go away any time soon.

Take the workplace. For the past four years we’ve complained about all the Biden-era regulations that have increased our costs. With Trump in office, shouldn’t these headaches go away? They will, at the federal level.

Federal minimum wages will likely stay the same. Overtime rules have already been rolled back to pre-Biden levels. Harassment and discrimination requirements are now mostly toothless, thanks to an Equal Employment Opportunity Commission that has been reduced to just two of five commissioners. Worker classification regulations are in the courts. Business ownership requirements are at a standstill.

Fewer, if any, rules are expected to come from the Department of Labor, Equal Employment Opportunity Commission, National Labor Relations Board and Occupational Safety and Health Administration over the next few years (with the exception of the Labor Department, whose designated secretary is pro-union and could be a wild card). But mostly, it’s good for businesses, right?

I’m not really sure. That's because with the federal government backing away, many states are stepping in to pick up the slack.

Several states now have tougher overtime rules than the federal government. Thirty states have a higher minimum wage than the national level, with more than 25 states and 65 cities overseeing increases this year alone. Twenty-one states and localities have or are proposing new laws around paid time off and mandatory leave. Other states are requiring mandatory retirement plans. A number of states are rolling out new legislation on using AI in the workplace.

This trend was happening even before Trump took office, but given that he often advocates pushing issues to local levels, it’s very likely to grow. So now instead of dealing with one federal regulation, businesses have to deal with countless rules at the state level.

And it's not just their home state. It could be any state where there's operations or remote employees. That's why so many companies are turning desperately to HR companies like Paychex and ADP or hiring Professional Employer Organizations to keep up with the compliance. They just can't do it any more on their own.

Then there are tariffs. I understand that the president wants to level the playing field and gain concessions from countries on issues like immigration and the import of narcotics, but his policies are creating uncertainty. It's unsure what countries are being targeted, what tariffs are in effect or on hold, what products specifically apply or even what the future is. The safest thing to do is to buy only American products, but this isn't always realistic. There's been 60 years of a post-war global economy, and key materials that many businesses use still must be purchased overseas. Trump wants to see more manufacturing in America, but this can't happen overnight. Businesses can deal with tariffs. But they can't do business when things are this uncertain.

Will taxes come down? The president and the GOP, while campaigning, promised to make permanent many of the provisions of the 2017 Tax Cuts and Jobs Act, which would result in lower long-term rates and higher deductions. But this is not a done deal by any stretch. The Republican Party holds a slim majority in Congress and Democrats will rightfully be asking how these permanent tax cuts will be paid for.

When will this be resolved? This summer? The fall? Taxes are among the largest — if not the largest — expenditures for a business. Smart managers incorporate tax planning as part of their strategic decisions. It's impossible to do this while we wait for clarity.

Elon Musk is doing a yeoman's job with DOGE. Budgets are being cut and many examples of questionable funding are being frozen or stopped altogether. But there are countless small businesses and nonprofits who do perform great work for the government and are facing a cash flow crisis. Across-the-board stoppages of payments can be crippling to these business owners. It's important work, what Musk is doing. But there will be collateral damage from these changes, and unfortunately many small businesses will be part of that collateral.

Can Musk find the cost savings to help pay for the president's tax cuts and reduce the deficit while minimizing this pain? Can businesses wait around to find out?

None of this is unexpected. For anyone who was listening, Trump clearly told the world what he would be doing if elected. Talk to any business owner — particularly the ones that support the president — and you'll see that they're willing to give him some rope. Few supporters fully support all of this actions. But agree or not, they know there are a lot of problems that need to be fixed, and they appreciate his energy and determination to do what he promised to do. They know that this won't happen overnight, and they're prepared for disruption.

The promise is that, in the long term, things will shake out for the better. Maybe so. But it will be a very bumpy road for most businesses in the meantime.

Gene Marks is founder of The Marks Group, a small-business consulting firm.

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