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One World, One Industry: Implications of the Trump Presidency

Later this month, Donald Trump will enter the White House as the 45th president of the United States. Regardless of whether you are a Republican, Democrat, or Independent, we at IPC believe this leadership change will present meaningful opportunities for the electronics industry.

Under normal circumstances, the newly unified Republican control of Congress and the Executive Branch could be expected to translate into a more coherent, pro-business governing agenda. However, President-elect Trump is not a traditional Republican, and his operating style often detracts from the merits of his message.

There are some who suggest that the new president’s plans might diverge enough from those of the Republican Congress that a legislative stalemate may ensue.

What does this mean for the worldwide electronics industry?

Our biggest concern is the impact on international trade. Specifically, President-elect Trump has said he would drop U.S. participation in the Trans-Pacific Partnership (TPP), put a hold on the Trans-Atlantic Trade and Investment Partnership (T-TIP), seek to renegotiate NAFTA, slap higher tariffs on imports from China, and seek greater penalties on nations accused of dumping products or raw materials and committing intellectual property violations.

If these drastic U.S. policy shifts are pursued and enacted, we might expect to see a strong outcry from the business community and the general public. Increased uncertainty is rarely good news for most businesses, and that’s especially true in the complex world of trans-national trade.

Also, considering that many electronics products and components are manufactured overseas, the price of these devices could jump by nearly 50% if the tariffs described during the campaign are enacted.

Likewise, President-elect Trump’s promise to renegotiate NAFTA will affect many industries but especially the U.S. automotive sector, which has outsourced much of its production to Mexico.

Electronics account for up to 30% of the cost of today’s cars, and some economists have estimated that a total repatriation of automobile manufacturing to the U.S. could increase the consumer cost of small cars by $5,000 each.

The road to higher consumer prices resulting from a more protectionist U.S. policy is one that few will want to travel.

In addition, the President-elect’s anti-immigration views could affect many electronics manufacturers and their customers in the United States, where there is already a skilled worker shortage. American citizens with the skills needed to staff advanced manufacturing facilities simply are not available in the numbers required.

Part of the answer is workforce development initiatives and higher educational standards at all levels, especially in science, technology, engineering and math (STEM). To help meet this need, IPC is committed to being a leader in training and certification courses. Our new learning-management platform, IPC EDGE, is designed to deliver the knowledge and skills necessary to excel in the electronics industry.

On each of these major issues, President-elect Trump was somewhat vague and contradictory during his campaign, so understanding how he will govern and seize opportunities will require significant government relations work and agility on our part.

On the bright side, we are optimistic that a one-party government will pave the way to progress in several important areas. For example, we expect that President Trump and leaders in Congress will collaborate on a corporate tax reform package that will stimulate business growth and investment. We also expect that a Trump administration will take a lighter approach to regulation, including a better balance among the risks, costs and benefits of new rules, and a better grounding in the best available scientific research.

As an industry, we will move forward, and IPC—whose chief goal is to ensure the success of our members—looks forward to playing an active part in that progress.

Because at the end of the day, we make progress together—part of one world, and one industry.  

John Mitchell is president and CEO of IPC−Association Connecting Electronics Industries. To read past  columns or to contact Mitchell, click here. 

Editor's Note: This article originally appeared in the January 2017 issue of The PCB Magazine.