Above: Lee Brown applies a coat of primer to drywall in the course of new office construction at TechFarms. Recent developments have slowed business investment, but not everywhere. Photo by Steve Bornhoft
The owner of a small technology and financial consulting firm, in an article he contributed to Entrepreneur magazine immediately following Donald Trump’s election victory in November 2024, sounded an optimistic tone.
The then imminent second Trump presidency, Gene Marks predicted, would benefit his business and many others in three areas: taxes, business regulation and business climate.
Marks hedged his bet, however, in noting that a lot of uncertainty surrounded Trump’s return to the White House and, in particular, “Many economists have warned about the negative impact of the tariffs he plans to impose.”
Of late, those very tariffs have commanded the headlines, consumer confidence has declined and along with it, the appetite for business investment, expansion and entrepreneurial activity.
For how long today’s realities and the uncertainty introduced by the Trump administration will continue to supplant Marks’s positive outlook is anybody’s guess.
Marks embraced Trump’s expressed intent to extend or make permanent the 2017 Tax Cuts and Jobs Act, given Republican majorities in the House and the Senate. He anticipated that regulations adopted in discretionary fashion by the Biden administration and pertaining to independent contractors, overtime compensation and “hostile workplaces” would be relaxed. And he felt confident that Trump would adopt a pro-business attitude sure to encourage investment.
“People ride bikes when it’s sunny; they stay inside when it’s raining,” Marks wrote. “Businesses — and the millions of employees who work for them — take more risks and enjoy more rewards when they know that they don’t have to worry about the government interfering with their operations.”
Trump’s wavering imposition of various tariffs might scarcely be called non-interventionist.
The approximately $6 trillion in lost wealth quickly resulting from the Trump tariffs “was enough to fully fund the Ukraine war for a century and the National Institutes of Health for a century,” wrote Jeffrey A. Sonnenfeld and Steven Tian in an April 7 article published by the Yale (University) School of Management.
Sonnenfeld is the associate dean for leadership studies and a professor at the school. Tian is the director of research at its Chief Executive Leadership Institute. Together, they contend that volatility leads to paralysis in business investment.
“Businesses need predictability and years of lead time to authorize substantial new investments because it generally takes upwards of five years from the moment an investment is authorized to the moment a factory is ready to go,” Sonnenfeld and Tian write.
The two men argue for economic stewardship that is thoughtful and policy-driven versus impulsive and whimsical.
“As long as Trump continues his idiosyncratic approach to tariffs with one-off negotiations, he will fail to provide the necessary clarity that businesses need to invest and move forward.”
The stakes are high.
