Following the election of Donald J. Trump as the next president of the United States, the Long Beach Business Journal reached out to Long Beach area business leaders representing a variety of industries and asked: What are your thoughts on how the Trump presidency will impact the local economy? These are their responses.
Duane Kenagy, Interim Chief Executive, Port Of Long Beach
The Port of Long Beach is a major economic engine – with trade that generates more than $5 billion in tax and revenue contributions each year and sustains 30,000 jobs in Long Beach. It’s too soon to determine what impacts President-lect Trump’s presidency will have on the local economy. We will monitor and stay engaged on policies of interest to the port industry. We look forward to working with the new administration to support infrastructure investments, advance U.S. exports and to further secure our nation’s seaports.
Hilda Sanchez, President, Minuteman Press
Business always involves a lot of unknowns. Certainly, the change in administration adds to the unknowns, especially after the unusual election campaign we just experienced. I am the eternal optimist, so am I expecting instant chaos? On Capitol Hill, maybe, but in our day-to-day business world here in Long Beach? No. We are going to stay the course. We have equipment that needs upgrading and we are continuing with that. We have a product line we want to expand and we will continue with that. We will continue to take care of our customers – that’s priority one. As specifics are ironed out in Washington, we will adjust accordingly as we have with other legislative changes. But only when we know specifics will we know what changes to make.
John Molina, CFO, Molina Healthcare
We don’t foresee the Trump presidency having a direct impact on our business here in Long Beach and we do not have plans to alter our local employment practices in the near future. During this time of change in our nation’s leadership, there is one constant of which I am certain: for more than 50 years, Medicaid and Medicare have improved access to quality health care for tens of millions of Americans, regardless of which party controls the White House and Congress. While the details continue to develop, we can agree on one thing – both Democrats and Republicans want affordable and accessible health care. The debate is simply about how to achieve this goal.
For more than 35 years, Molina Healthcare has provided high-quality care to our members through government-sponsored programs and we will continue to do that right here at our Long Beach headquarters. We want to remind our members, providers as well as state and community partners that the Marketplace is not going away overnight and that people who are uninsured should shop during this open enrollment period and get the health insurance that is right for them.
We’re proud to say Molina Healthcare is one of the most affordable Covered California health plan options with the lowest-price products in most of the markets we serve. Long Beach has been home to our family and our company for many years and we plan on continuing to build here and carry out our mission for years to come.
Mark Vitner, Managing Director, Senior Economist, Wells Fargo
Donald Trump’s surprising victory has lit up the financial markets, sending stock prices higher, sparking a sell-off in bonds and pushing the value of the dollar higher.
The short term impacts of Trump’s economic plans are likely to be good for the economy. Taxes are likely to be cut at the personal and corporate level, which we believe will bolster consumer spending and business investment in 2017. Plans to increase defense spending and spending on infrastructure projects should also boost growth, although the time lag for these projects is likely to be longer.
Some of the greatest near term benefits will likely come from an improved regulatory environment, particularly in regards to small business.
The prospect of a huge fiscal stimulus coming this late in the business cycle means that inflation and interest rates will also be a bit higher. Both are starting from historic lows, however, and should not present major challenges for the economy in 2017.
On the downside, president-elect Trump’s rhetoric on international trade is a bit threatening. Placing tariffs on imported goods would add marginally to inflation. The real damage would come from retaliatory tariffs that would likely impact many of the nation’s most competitive industries.
On balance, we are taking an optimistic view of Trump’s economic plans and look for a scaled down version of his tax cuts and infrastructure spending to become law early next year. We believe the rhetoric on trade is a negotiating ploy and expect the nation to avoid a trade war that would be damaging to all parties.
Robert Barnes, Executive Vice President, Operations, California Resources Corporation
President-elect Trump has committed to strengthening America’s infrastructure, manufacturing and energy production. The City of Long Beach provides a proven model of public-private investment in the energy, transportation and manufacturing sectors that creates and sustains diverse, good-paying industrial jobs. California Resources Corporation is privileged to contribute to this partnership by producing safe, affordable and reliable energy in Long Beach under California’s world-leading standards. We hope that the incoming administration will reference the Long Beach model as they develop new federal policies. A key success factor in Long Beach’s effort has been the diverse, highly qualified workforce from the building and construction and steelworker trades. We hope that state leaders will work with the new administration to provide more predictable permitting for infrastructure and energy projects that will dramatically increase the number of local jobs and help Southern California build a vibrant, inclusive future.
Michael Bohn, Senior Principal, Studio One Eleven
President-elect Donald Trump has expressed his opinion on many policies that will potentially impact key sectors of our local economy. These include health care, immigration, global trade, alternative energies and aerospace. A change in policy could impact hundreds if not thousands of jobs and entire industries in Long Beach.
One area that received very little debate during the campaign is the subject of affordable housing. How will this presidency respond to the current federal housing policies which impact both rural areas and inner cities in this country? A couple of names have surfaced from his transition team for HUD Secretary that would support fair and affordable housing, however others on the list are considered committed opponents.
Rural areas across our country suffer some of the worst housing conditions due to depopulation, aging housing stock, job losses and poor aging populations, with current housing programs providing little support. This demographic, particularly in the rust belt regions, had a significant role in electing Trump. If he ignores these overlooked communities, they will potentially turn on him in the next election. At the same time during his campaign, Trump spoke often about the plight of inner-city residents and promised significant investment. Improving both rural and urban areas means investments in infrastructure and quality affordable housing.
If campaign promises are fulfilled, then Trump should embrace federal housing policy to benefit all of America’s struggling communities including areas within Long Beach. Otherwise, our growing nationwide affordable housing crises will only continue to get worse.
Sherry Diamond, Esq., Associate Dean of Academic Standards
Pacific Coast University, School of Law
Pacific Coast University School of Law (PCU) has weathered nearly 100 years of economic, political and social change. And as Long Beach’s only law school, we take a keen interest in our election processes. This one is particularly significant.
Statistically, it is widely accepted that charitable giving decreases under Republican administrations. While PCU is not reliant on federal funding, there are 1,524 nonprofit organizations (irs.gov) in Long Beach, whose charitable contributions may plummet under Trump’s tax plan. The Chronicle of Philanthropy reports his plan calls for $800 billion in cuts over 10 years. (11/09/2016) Long Beach nonprofits that depend on federal funding could face substantial reductions.
Repealing the Affordable Care Act (ACA) will reduce federal money for Medi-Cal, forcing lower income people back into the ranks of the uninsured, while increasing premiums to insureds. As the second most diverse city in America, our city is home to many ethnic, disenfranchised, and marginalized communities. Increased hate-crime will compromise our community identity and dampen the economic benefits inherent in diversity. Because Long Beach provides critical services, we see large concentrations of people struggling with mental illness, chemical dependency and homelessness. Repealing the ACA will have a detrimental impact on Long Beach residents, nonprofit and for-profit hospitals, and social service agencies who provide crucial assistance.
Should Trump’s rhetoric become policy, the need for services provided by our city, especially the nonprofit sector, will increase exponentially, with far fewer resources to support them, at a time when we will need them more than ever.
Alan Burks, AIA, LEED® BD+C, President, Director of Architecture, Environ
We should be concerned about many issues with the new administration but I will focus only on what I think may impact the local economy.
1. Trade tariffs on Chinese goods will have a negative impact on trade. Hence a negative impact on our local economy which depends heavily on trade.
2. An added interest in fossil fuels may help our oil industries that have been dormant for a year and a half. Of course this would be at the expense of any environmental progress.
3. An added interest in fossil fuels will harm the burgeoning sustainable energy industries and also our quality of life and health.
4. Investment in infrastructure will help our local engineering companies at the expense of an increased national deficit and the resulting inflation.
In general I feel that the new administration will be detrimental to our local economy.
Blake Christian, CPA/ MBT, Holthouse Carlin & Van Trigt LLP
President-elect Trump has made it clear that he will be focusing on infrastructure projects during his first 100 days, so hopefully some of the long overdue projects in Long Beach, such as the 710 Freeway, will get some funds.
If Mr. Trump takes a hard line and directs the Secretary of the Treasury to label China a “currency manipulator,” we might see a short-term trade embargo from the Chinese side, which would negatively impact the port traffic, and also impact U.S. exporters – and possibly manufacturers using imported raw materials.
Tax reform is also at the top of his list and, since he will have cooperation of the House and Senate, we will likely see some quick tax reform, including a decrease in personal (maximum 33%) and business tax (15%) rates, as well as a promised favorable 10% rate on foreign earnings that are brought back onshore. Congress will undoubtedly challenge the new president with respect to the trillions of dollars of deficit increase these tax cuts will cause. Therefore, the ultimate tax changes will likely not be as dramatic as Mr. Trump has proposed.
From a public safety standpoint, President Trump will be pushing to pass the Restoring Community Safety Act, which is focused on reducing surging crime, drugs and violence by creating a Task Force On Violent Crime and increasing funding for programs that train and assist local police; increase resources for federal law enforcement agencies and federal prosecutors to dismantle criminal gangs and put violent offenders behind bars. While Long Beach crime is down in most areas, this bill, if passed, may offset some of the negative impact anticipated from the recent passage of Proposition 57.
One final thought. Trump’s focus on improving the Veteran’s Administration should benefit our local VA hospital and possibly Fisher House also. He mentions both fairly regularly.
Roger Frizzell, Chief Communications Officer, Carnival Corporation
We remain optimistic since his (Trump) platform was pro-business. We have exciting new ships and wonderful destinations for our guests in more than 700 ports around the world, so the appetite for cruising is very strong.
Vince Passanisi, President, Santa Fe Importers
I’m reluctant to hazard a guess, knowing that any attempt to predict the impact on the local economy would be purely speculative at this point. Instead I profess my sincere hope that Mr. Trump will promulgate policies that will protect property rights, defend our civil liberties, respect the rule of law, and bolster the free market by reducing both the tax burden and stifling government regulations.