2016 ROI Fourth Quarter Edition with Q & A HIS Capital Group Edition | Page 14

– THE POLICY FRONT OF THE TRUMP ADMINISTRATION –
TRADE AND INFRASTRUCTURE SPENDING
Two of the more known potential policy levers the incoming Trump Administration plans on making
relates to trade and infrastructure spending. On the former, Trump is attempting to bring back the 5
million manufacturing jobs that have disappeared over the past 15 years. That’s a tough feat without
inciting a trade war. Labeling China exchange rate policy as manipulative – and thus imposing a 45%
tariff on imported China goods – is sure to incite a response from Chinese policymakers. Trump and his
advisers may find a way to make such a policy or moves towards such a policy bring net positive results,
and thus perhaps bring back manufacturing jobs, but it’s risky. Of course, there’s no real reward without
some risk.
The surer bet of the two is that infrastructure spending under a Trump Administration is likely going to
rise. Such spending is probably needed right now, in that year-over-year growth in Residential and NonResidential Construction is basically 0 at the moment and heading in the wrong direction
(bottom chart on this page).

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HIS Capital Group