ILMA Compoundings December 2016 - 5

FROM THE CEO

The Trump Administration
and the New Congress:
What to Expect
Holly Alfano

A

s I write this, it's the day after the election. I'm in
Washington, D.C., where people live and breathe politics,
and they are not used to being taken by surprise.

While many people get emotional about election outcomes,
in the lobbying and association world, the response is usually
pretty pragmatic: What does it all mean? Where do we stand
on our key issues? We must immediately analyze and assess.
And that's exactly what I did, joining the National Association
of Manufacturers (NAM) and a few dozen other associations to
discuss the outcome of the 2016 election early on the morning
after.
Certainly old news now, Washington insiders were taken by
surprise by the election of Republican Donald J. Trump as
president. Additionally, Republicans maintained control of
the House and Senate and actually picked up a number of
governorships across the country for a total of 33 states, a
record. Through various polls, almost 65 percent of Americans
expressed the concern that the country is headed in the wrong
direction. And, despite the professed desire for change by a
large segment of the voters, a record number of incumbents
were re-elected.
So, what does all of this mean? What can lubricants
manufacturers and other manufacturers expect from the new
president and the next Congress?
The answer is: A mixed bag. Though NAM will NOT prevail
on every front, there are a number of issues that the new
administration and the next Congress are likely to support.
Trans-Pacific Partnership: This is NOT an area where NAM
is likely to get support from the Trump administration. As I
wrote in the August issue of Compoundings, the Trans-Pacific
Partnership (TPP) is a free trade agreement involving the
United States and 11 other nations. It removes tariffs and other
impediments to trade between the participating nations. For
some time, TPP has been pending before Congress for an up or
down vote. However, the president-elect's disdain for TPP, and
for the North American Free Trade Agreement (NAFTA), is well

known. On numerous occasions, Trump declared that TPP will
not happen on his watch, and he has also expressed a desire
to renegotiate NAFTA. However, NAM President and CEO Jay
Timmons believes the answer to that challenge is education
of the new administration and members of Congress on trade
opportunity. Additionally, NAM expressed optimism that the
current Congress might act on TPP in the lame duck session
between Thanksgiving and Christmas, though NAM lobbyists
acknowledged that they were short (as of Nov. 9) on the
needed 218 votes in the House.
Infrastructure Investment: This is a top priority for
manufacturing groups. During the campaign, both Trump
and Democratic candidate Hillary Clinton agreed that
America needs to invest in its infrastructure - roads,
bridges, airports, ports, etc. Clinton vowed to spend some
$290 billion, with Trump proposing an even higher level of
spending. Infrastructure spending will lower transportation
costs for manufacturers, in addition to stimulating demand
for certain types of products (including lubricants) used in
the construction of roads and bridges. During the campaign,
Trump proposed more than $500 billion in spending, coupled
with streamlining of some environmental permits to ensure
that infrastructure projects progress quickly. However, the
president-elect may run into difficulties advancing this
issue with Senate leadership. Senate Majority Leader Mitch
McConnell (R-Ky.) suggested the day after the election that
he was not inclined to pursue legislation funding further
investment in infrastructure.
Tax Reform: NAM has high hopes of success on this issue, and
it's well known that corporate tax reform is a top priority of the
president-elect. "I'm more optimistic on tax reform than I've
been in the last 10 years," Aric Newhouse, NAM's senior vice
president of government affairs, said the day after the election.
President-elect Trump has proposed cutting the corporate
tax rate from 35 percent to 15 percent and eliminating the
corporate (and personal) alternative minimum tax. For
manufacturing firms, he proposes continuing the "Research
and Development" tax credit and allowing manufacturers to

Compoundings December 2016 * 5 * Vol. 66 No. 12
ILMA Compoundings December 2016

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