Economy

FABTECH Webinar Addresses Business Outlook Post-Election

December 20, 2020

President-elect Joe Biden will hit the ground running due to his past experience in Washington and the depth of experience of his Cabinet choices, said Omar Nashashibi, founding partner of the Franklin Partnership, during a FABTECH webinar last week. Expect to see a flurry of executive orders and memorandums from the new executive office regarding climate, health care and OSHA issues. First priority, however, will be COVID 19 and the economic recovery.

Trade issues will be interesting, added economist Chris Kuehl, Managing Director, Armada Corporate Intelligence. Americans forget how export-oriented the U.S. is, said Kuehl. “We export high level stuff—lots of agriculture—but the rest of it is manufacturing. We don’t export consumer goods, we import those. We export the machines that consumer goods are made with.”

Nashashibi doesn’t expect Biden to lift China tariffs right away or those under Section 232. “Biden is inheriting leverage [for negotiating], and that is in the form of tariffs,” he said. Biden is an internationalist and multilateralist as opposed to Trump’s nationalist/bilateral stance. Where Trump was less concerned with human rights and more with one-on-one interactions, Biden believes trade can enhance democratic values in the world and will favor multilateral agreements and coalitions to address trade issues.

There may be some adjustments to the Section 232 tariffs, including lifting restrictions for some allied countries and reopening the exclusion process, but there is significant pushback in Congress to keep most of the tariffs intact for the time being. Nashashibi expects big consumers of steel to see all kinds of challenges in the domestic market including consolidations and some supply going offline permanently.

Kuehl and Nashashibi agree that taxes will have to go up at some point in order to pay for coronavirus relief and pay down the huge deficit that has accumulated. Kuehl says a survey of Fortune 500 CEOs showed they expect taxes to go up, but the question is who will bear the burden.

The new administration will promote a green initiative including electrical vehicles, reduction of carbon emissions (auto and industrial), and water quality. Biden will likely undo any rules that Trump imposes that expedite environmental reviews.

OSHA rules will also need revamping to adjust to changes in the work environment. “One issue is how you implement human resource and OSHA policy when people are working from home,” said Kuehl.

Education and work training will be addressed by the Biden administration, including potential policy changes that will affect college and job training tuition, apprenticeships and K-12 learning. Nashashibi expects a change in how community colleges see their mission—not just preparing students for four-year colleges but collaborating with manufacturing and businesses to fast track individuals into solid paying jobs. Bipartisan support is likely for such initiatives.