After the midterm elections, CEOs are looking for a U.S. economy and business climate that function pretty much as they have over the last couple of years, with expectations for continued robust growth in the near term, the slow working out of trade conflicts, and even greater difficulty finding and keeping the labor to fulfill their rising backlogs.
But CEOs also are concerned because of the partisan split that will take over Congress in January after Democrats won the House of Representatives and Republicans added to their margin in the U.S. Senate on Election Day. Total legislative gridlock isn’t acceptable.
“The results weren’t a surprise to me by any stretch of the imagination,” John Fish, CEO of Suffolk Construction, based in Boston, told Chief Executive. “But going forward, we need to ensure that the economy stays strong. We need to keep our eye on it and block and tackle to make it happen.” President Trump’s “economic policies have been supportive of business in the U.S.”
The consensus of post-election analysis was that despite dealing now with a Democratic majority in the House, and the peril of endless House investigations into his conduct, President Trump will be able to continue to maintain the policies that have helped the U.S. economy grow, including corporate and individual tax cuts and broad business deregulation. If Congress enters legislative gridlock, Trump is likely to unfurl more executive orders to achieve some policy objectives, similar to what he’s done so far and in the manner of predecessor Barack Obama.
Investors collectively seemed to agree, with the Dow Jones Industrial Average surging by 550 points on Wednesday to extend a recent turnaround from the markets’ brutal selloff in October. The general interpretation was that investors dropped most concerns that big post-election business-policy changes would be in the offing.
“The beauty of American politics is that it’s typically divided government,” says John Schlifske, CEO of Northwestern Mutual, the insurance and financial-services firm based in Milwaukee. “The economy itself looks like it’ll keep chugging along.”
Trump himself sought to reassure American CEOs and consumers who might have worried that Democrats would try to undo the economic accomplishments of the last couple of years, promising during a press conference on Wednesday to seek “bipartisanship” with new House leadership on leftover issues such as health-care reform and an infrastructure initiative.
“There are a lot of important bipartisan issues that could be tackled, things like infrastructure, that can be unifying for [Congress] us to work on, and I’m hopeful that we can,” Vicki Holt, CEO of Protolabs, a digital-manufacturing company in the Twin Cities, tells Chief Executive.
Trump specifically addressed the implications of the elections for America’s ongoing trade imbroglios with Europe and China. “Our trade deals are coming along fantastically,” he told reporters. Meanwhile, Trump said, because of tariffs he imposed earlier this year, the American steel industry is “back” and the domestic aluminum industry is “coming along. These are industrie that were dead.”
Holt agrees that the election results “won’t have a huge impact on trade. Those are big issues that are working to be resolved and will have their own timeline.”
About trade, Jeff Simmons, CEO of Elanco, a Greenfield, Indiana-based provider of animal-health products for food production and pets in global markets, tells Chief Executive, “We are hopeful about the dialogue that we have going on with countries including Japan, and the UK. We believe meat, milk and eggs must be able to move; it’s good for the economy and consumers and food security around the world.”