What does a Trump administration mean for American consumers?

A Donald Trump presidency will either be great for American consumers — or it’ll be a disaster.

Just as the presidential election left the country bitterly divided, it’s almost impossible to find any middle ground among consumers, industry experts and insiders when it comes to the effects of a Trump presidency on customer service.

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President Trump will either make U.S. businesses more competitive — and more responsive to their customers — by unshackling cumbersome regulations, or his administration will dismantle important consumer protections and further erode service.

Nor is there any consensus on what steps, if any, consumers can take now to get ahead of a Trump administration. But there’s plenty of informed speculation.

“Expect lots of uncertainty in the coming months,” says Aaron Jackson, a professor of economics at Bentley University.

Some consumers are upbeat about the incoming president, pointing to Trump’s record in the hospitality industry. John Baker, who owns a tour operator in Cincinnati, works directly with three of Trump’s resorts.

“I can tell you without a doubt if you were looking to have someone who is service-oriented in that position, you have it,” he says. “All three are high-touch, high service. All three are also we-do-what-we-say places.”

Experts say the idea of lifting some regulations may also benefit consumers. One of Trump’s campaign promises included a moratorium on new agency regulations, as well as reviewing and eliminating regulations that hindered businesses.

“Should those regulations be lifted, the costs associated with compliance would hopefully flow through to the consumers,” says James Mohs, an assistant professor of accounting at the University of New Haven. “At least that seems to be the idea.”

One Washington, D.C., insider told me the incoming Republican-led Congress is ready to get to work creating new laws, some of which will undoubtedly benefit consumers. Contrary to the public image they’ve cultivated as anti-regulation and opposed to big government, I’m told they are eager to start legislating and that Trump’s victory will not make any difference.

The takeaway? Beyond perhaps booking a room in a Trump-branded hotel or owning a business that will benefit from fewer regulations, it’s still unclear.

When it comes to the negative effects of a Trump administration, people are a little more vocal.

“With Trump’s desire to remove the U.S. from several trade treaties it is highly likely that prices consumers pay for goods will increase due to additional import tariffs,” says Crystal Stranger, who owns a tax advisory firm and is the author of The Small Business Tax Guide (Clear Advantage, 2014). “This also may cause inflation to occur as the consumer price index is tied to the cost of consumer goods, and we could see the first substantial increase in the cost of debt during the last couple decades.”

In other words, expect higher prices for almost everything.

The Republican congress has been trying to eliminate financial protections enacted in 2010 after the financial meltdown. At the top of their list is the Consumer Financial Protection Bureau (CFPB).

“Will CFPB now be eliminated or gutted?” asks Bruce Mirken, a spokesman for the Greenlining Institute, a nonprofit organization based in Berkeley, Calif. “That could open the door for more of the sort of predatory lending that led to the 2008 crash, and more abuses such as the wrongdoing at Wells Fargo for which CFPB recently fined the bank.”

Ben Woolsey, the general manager of CreditCardForum, has spent months studying the possible effects of Trump’s policies on consumers.

“Trump has stated his plans to dismantle the 2010 Dodd-Frank financial regulatory law along with nearly all financial reforms put in place by the current administration,” he says. Eliminating these regulations could lead to a sharp rise in annual percentage rates and penalty fees.

Other than switching to a debit card or cash, or paying off your full balance, there’s no way of protecting against these potential changes.

But won’t a Trump administration be great for entrepreneurs? And wouldn’t those new businesses, by extension make the marketplace more competitive, better serving customers? It all depends on the business. Take renewable energy, an area that Shel Horowitz, a profitability expert for green businesses, knows well.

“Trump’s election will have severe negative impacts for consumers,” he says. “As other countries take the lead in developing and deploying the latest renewable technologies, jobs that could have been created here will go elsewhere. Americans will continue to be burdened by toxic and illness-causing fossil fuels, unnecessary fuel costs, and ever-widening income disparity. Innovation funds will be choked off.”

Higher prices, higher fees, fewer regulations and less innovation. And again, no real way to prepare for what’s coming, other than maybe to avoid using credit cards.

So what’s going to happen? No one knows, but that isn’t stopping anyone from speculating.

“We will see immediate effects on consumer spending as the holiday shopping season comes into full swing,” predicts Cori Bonnell, a concerned expatriate who lives in Amsterdam, who contacted me shortly after Trump’s victory to share her thoughts.

“People buying useless stuff has kept the economy going,” says Bonnell, who grew up in Cape Code, Mass., and now works as a photographer in Amsterdam. “Overall, Trump is going to have to make things happen — whatever he has up his sleeve — and fast. If not, he will lose his support just as fast as he got it. Who knows what the reaction will be?”

Claire Walter, a writer from Boulder, Colo., says she thinks there’ll be “massive belt-tightening” as Trump comes into office.

“If Trump succeeds in killing Obamacare, people will find themselves at the mercy of an increasingly profit-driven medical and pharmaceutical industry,” she says.

Other consumers I spoke with were even more pessimistic, predicting the economy will implode and that Americans will soon be standing in long bread lines.

But some customers are waiting to see what happens. Robert Johnson, a retired home builder from Manasota Beach, Fla., says consumers ought to give the incoming president a chance before writing him off and declaring customer service dead.

“Calm down,” he says. “Let our president go to work solving the many problems and issues of today.”

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18 thoughts on “What does a Trump administration mean for American consumers?

  1. I am concerned that regulations that were put into place to protect consumers from unfair lending practices and peeling back environmental and safety regulations could do a lot of harm. Businesses have not proven themselves trustworthy to look out for our best interests without the aid of government oversight. Air bags? VW emissions scandal? Getting rid of regulation for the sake of getting rid of it is useless. If it is part of a thoughtful process, it will probably be ok. I honestly think the people who stand to lose the most in this are, ironically, the same ones who elected Donald Trump (and he is the President Elect until the inauguration. Calling him President before that time is disrespectful to our current President). When those jobs he promised people in the rust belt don’t come back (because they can’t –that ship sailed a long time ago), along with the potential loss of Medicare and whatever happens to Social Security (Paul Ryan has been waiting for his moment to take these on for a while), I think the loss is going to be devastating. And I don’t know how people who are already hanging on by a thread are going to come back from that.

    1. I believe too many people are “afraid”, “scared” or whatever. We just have to wait and see whether you are proven right or wrong. But, I accept your thoughts and I hope that they do not come to fruition. Somehow, I believe Trmp, the Senate and the House are smarter than that.

      1. Thank you for your respectful, polite comments. I really appreciate it after a week of people screaming at me on Facebook, my own family included.

  2. Dr Phil has it right: the best predictor of future behavior is past behavior. Apart from a very few stand-out companies who truly care about the environment, their workers, AND the consumers, we’ve seen over and over that big businesses do NOT pass on their price-of-doing-business savings. They will choose again and again to line their pockets with the extra profit.

    My advice to protect against whatever is coming? Play the lotto. The rich are the only ones who will benefit in the coming years, so if the rest of my avenues for getting there are cut off, I’ll have to take the gamble.

    1. Who knows, you just might get lucky, if you don’t go broke first; depending on how much of your income you “invest” in the Lotto.

  3. I could tell what the tone of this article and the comments would be, just based on the depiction of Trump at the beginning of this piece. That, coupled with all the negativity in the piece itself tells the story.
    Here I though it was recently said that we were not going to get into politics here, but I guess that only lasted briefly.
    Everyone is entitled to his/her opinions. That is democracy and freedom of speech. And while I can see that there are those who feel that when Trump gets into office, the sky will fall and the whole country will collapse, I rather doubt it.
    I have never experienced the amount of vitriol I am seeing from the Democrat side; coupled with all the paid protesters (people who should be in school or working). I certainly believe people should express their opinions, but I have never seen the Right do what the Left is doing now; all because they thought Hillary Clinton was going to steamroll over Trump.
    But, it did not happen and now we will have to wait and see what happens. Wailing and gnashing of teeth are not going to change things between now and January 20, 2017. Our country has survived for 240 years and I am certain it will not fall apart now or any time in the next few years. Things might even get better. All we can do is wait and see. Most politicians say all sorts of things and then when they are in office about 90% of what they said never happens. The people gave Obama a chance for eight years and now it is Trump’s turn.

  4. Even though I didn’t vote for Donald Trump, immediately the election results were known, I had some hope that his tenure as President may bring about more good than bad. In the past couple of days, those hopes seem to have been dashed. One of his major campaign promises was to “drain the swamp”. That meant get rid of those creatures, such as lobbyists, who cause our government to be run for the benefit of large corporations and financial interests rather that serve the needs of the average citizen. It is now clear that, many of those appointed to the transition team are lobbyists or corporate lawyers. How is a team going to promulgate regulations to diminish the influence of lobbyists when lobbyists and those who defend their rights are doing the promulgating? It is evident from economic data that, for the past 40 years, the economic prosperity of the middle class has been diminished while the fortunes of the very rich and of corporate America have greatly increased. Looks like we can expect more of the same in the coming years.

    1. Looks like some of the “lobbyists” have been sent away and it appears more may get the boot. Only time and patience will tell. Can’t tell you that everything will be to your liking or mine, for that matter. But, I am for giving a person a chance; especially after seeing how the past right years have gone.

  5. looking from the outside as an Australian, we saw exactly the same thing in Australia in July in our federal election. A huge % of the electorate(we have compulsory voting, which I wish we didn’t), voted for other than the 2 main parties Labor, which is totally run by the unions & Liberals, who are close to Republicans in policies. Minor parties, now “control” the senate. (the 2 major parties, don’t have a majority & nothing gets done, unless the minor parties agree)
    China is apparently dumping a lot of goods, due to massive stockpiles of some items. Trump, might not be able to put tariffs in place(don’t fully understand your complicated system of govt) but must be lots of other ways, he can slow down the importation of things like cars.
    Maybe he could go to Detroit & tell Ford/GM etc, to start employing people to make (more) U.S. cars again on basis that he will slow don imports. They might start on minimum wages, but better than being unemployed.
    Everytime, I go to U.S., am amazed as size of cars. The U.S. is in such debt, why doesn’t fed govt introduce a tax on fuel ? Even a small tax, would raise a lot of money & reduce your debt.
    Lobbyists for big oil has too much influence maybe ?
    Australia produces a good % of our oil cheaply, but our petrol is taxed a lot. Current petrol prices are AUD$1.10 to AUD$1.30 a litre, which if my calculations are correct, is US$3.12 to US$3.69 a U.S. gallon (using 3.78 lites = 1 U.S. gallon & exchange rate of 75 cents)

    1. The price of fuel in the US is very much driven by taxes, although usually on the state level. Some fear tipping the economy too far in the wrong direction by taxing gas too heavily. I would love to see our country move closer to spending taxes rather than income taxes. Income taxes blast the middle class who pay a disproportionate amount, and sadly some of the riches people pay a lower percentage of taxes than the poor do.

      1. a 5% tax on fuel, would probably not even be noticed by anyone, due to price variations(in Australia, price changes every day, by as much as 30 cents a litre (that’s USD$0.225 cents per litre. Think there are 3.78 litres to a U.S. gallon)) but would raise hundreds of millions of dollars every year.

  6. Speaking of NO experience – Obama ring a bell? And, I am not certain Trump will appoint justices that will take away a woman’s reproductive rights. You, at this point in time, are just assuming that will happen. However, I respect your right to speak your mind, just as I am speaking about how the Left is behaving now that it has lost the election; the likes of which we haven’t seen before. No wonder the world has been going to pot under the New World Order.

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