The Meaning Of State Of The Union Address

The State of the Union Address is a message delivered by the President in front of a joint session of Congress at the beginning of each year. Budget information, economic reports, national priorities, and legislative agendas are all commonplace. Originally scheduled for January 29th, it was postponed due to reasons surrounding the government shutdown. Speaker of the House Nancy Pelosi made it formally known on January 23 that she would not invite the President to make his address in the chamber of the House until the shutdown ended, citing security reasons. This year’s State of the Union Address was given by President Trump on February 5, 2019. The entire speech lasted 82 minutes, making it the third longest SOTU speech given. President Trump covered a wide range of topics during his speech. Among them were bipartisanship, the state of the national economy, jobs, unemployment, border security, drug crisis, tax reform, and much more. Just like years prior, President Trump’s address was met with protest by the opposing political party. Congressional Democrats wore white to bring attention to women’s rights and a few brought guests to send their message to the president. Stacey Abrams delivered a rebuttal for the Democrats, Jeff Hewitt for the Libertarians, and Bernie Sanders for the Independents.

What implications does the speech have for business?

There were many implications made for business in the upcoming years made by President Trump in this speech. Very early on he speaks of the massive economic boom that the US has seen over the past two years, referencing the newly created 5.3 million jobs, and the 600,000 new manufacturing jobs within that. He then goes on to say, “we are just getting started.” He also mentions the rising wages, and specifically mentions blue collar workers who he promised to fight for. President Trump talks about how the US is currently experiencing some of the lowest unemployment rates of all time. Though he is not saying this directly, I believe this is implying an increased focus on small and local businesses, to put the power back in the hands of the people. President Trump makes mention of lowering taxes on small businesses, ranches, and family farms. This also hints at an easier time for small business, as well as family farms, which are currently declining in record numbers. Along with newly imposed tariffs on goods from China, as well as the creation of the USMCA, the implications seem to be restricting production from out of the country, and increased focus on bringing business back to the US.

What opportunities?

There were several promises made my President Trump during the speech. Majority of these promises make a great opportunity for the businesses as well as the economy in whole. Trump stated that the new USMCA (U.S.-Mexico-Canada Agreement will replace NAFTA and bring the manufacturing jobs back to America where more jobs will be available to the blue collar citizens. Although there will be more jobs available to Americans citizens, there will also be a higher cost of products because of the increase in labor. The biggest opportunity for business is the tax cut. Trump made it seem like this tax cut was for the working families but in all reality is was most beneficial to the wealthier families and the corporations. Corporations will have the opportunity to take advantage of this tax break and place the increase in profit into expanding the company. Trump is a business man and he always will be. He wants to help the American citizens but it will come with a price for the businesses. The introduction of building the wall on the southern part of the United States will reduce the amount of illegal immigrants from coming into America and will allow more citizens jobs that were once replaced by illegal immigrants. This will increase the labor cost for the businesses who have got away with paying a lower rate to illegal immigrants. There are some opportunities that are going to help the corporations and there are some that will help the blue collar Americans. Many won’t be at the benefit to both.

What risks?

While there are potential opportunities for the businesses of our country, there are also risks that come from the comments in this address. As President Trump often mentions, our economy is in excellent shape right now. However, is it sustainable? The economy is not merely the result of the work done by this president or others, but also part of the natural rise and fall of things. If this expansion lasts through this summer, it will be the longest expansion in history according to CNN Money. With that in mind, we have to wonder when the downturn will begin, as it is inevitable that what goes up, must also come down. The economy rises and falls not only by natural patterns, but also by outside forces. Our economy began its downturn during the tenure of George W. Bush, due in large part to the Iraq War. This current president is not above creating enemies in order to put America’s needs first. While patriotic, it can also be dangerous, and cause a turn in the economy.

President Trump has made it his mission to put America above others, but at what cost? He withdrew our country from NAFTA, claiming it was a “catastrophe” and that a better deal could be negotiated. He reports it’s replacement USMCA will provide on that promise, though an untried trade deal is a risky endeavor and promises are worth as much as they provide. It is hard to say what this new deal will bring with it, and what potential hard feelings will be included by Canada and Mexico with the removal of NAFTA. If the president expects this new deal to bring manufacturing back to America, will this discourage Mexico from future work with the United States due to loss of jobs and income in their own nation because of our removal of factories? Will we suffer losses of imports because countries do not feel we are providing enough in return?

Also, with constant talk of the border wall, and the recent government shutdown over the funding, what type of trade issues will we incur if the wall should go up? The wall can also cause issues with wages and employment opportunities in our country. It is common knowledge that many illegal immigrants work for employers “off-book.” This allows employers to pay lower rates than they would pay an American citizen. This costs our country by providing the job to someone else, and allowing the company to claim less in wage expenses. However, this also means that should this cease, companies will have to pay higher wages for the same job, which could mean less employment and/or higher costs for goods produced by the company, which will negate the benefit.

How would you advise a company to prepare for the coming year?

Although our economy is currently in excellent shape, the choices President Trump has made will affect all businesses. Companies should react with caution throughout the next year and await the changes. We suggest not making any hasty decisions before establishing how these new factors affect our economy. Companies should prepare to spend more on wages. This is due to the wall President Trump has spoked about since election. Some businesses pay illegal immigrants “off the book” to save funds. This is going to decrease within the next year because immigration is going to be more strict. If companies have factories located within Mexico or Canada they should begin looking into relocating them as soon as possible onto United States soil. Although this will increase jobs in the United States companies need to be prepared to fund these projects.