From tax reform to trade policy, President Donald Trump’s first term in office was marked by seismic shifts in the business landscape. From the Tax Cuts and Jobs Act of 2017 to a flood of regulatory rollbacks and a trade war with China, businesses and their leaders adapted to evolving challenges and opportunities.
Trump’s second term is shaping up to be no different in terms of impact, with promises to add further tariffs, implement additional tax cuts, and restrict immigration, along with other policy proposals that will shape business strategy for years.
To help navigate these incoming complexities, we have collected the latest insights from Columbia Business School faculty analyzing Trump’s policies from all angles. These insights offer an essential glimpse into the next four years under a Trump presidency and how leaders can best prepare.
The Impact of Tariffs
Trump promised to pick up where he left off during his first term by increasing tariffs on China and employing tariffs on Mexico and Canada, focusing on the United States’ three most significant trading partners. According to economist Brett House, Professor of Professional Practice at Columbia Business School’s Economics Division, the move would push up prices for American businesses and consumers.
Upward price pressures are likely to be further inflamed by Trump’s proposed crackdowns on new immigrants and the deportation of immigrant workers. Key industries, like agriculture and construction, will feel the most impact, and cost increases will, in turn, be passed onto businesses and consumers, according to House.
At the same time, a skills gap remains one of the largest hurdles for businesses according to the World Economic Forum’s Future of Jobs Report 2025. A whopping 63% of employers surveyed in the report cites the skills gap as a major barrier to future-proofing operations.
Additionally, barring any complementary decreases in federal spending, new and continued tax cuts promised by Trump will likely grow the federal deficits. The ensuing boost to aggregate demand without increasing aggregate supply will further increase prices.
Days ahead of the inauguration, the Bureau of Labor Statistics’ reported a slight deceleration in its core inflation reading, which excludes food and energy prices, to 3.2% in December. This news, coupled with President-elect Trump’s push to reduce regulatory burdens might offset some of these price pressures. Overall, though, the Trump agenda will likely make it harder to lower inflation going forward, according to House.
Investment and Tax Cuts
Trump believes tariffs are the key to safeguarding domestic industries, promote local manufacturing, and lower trade deficits, contributing to economic growth. Still, the president-elect could spur investment by building on the successes of the Tax Cuts and Jobs Act — more specifically, making permanent the expensing of business investment, according to economist Glenn Hubbard, Dean Emeritus and Russell L. Carson Professor of Finance and Economics at CBS.
In an op-ed for The Wall Street Journal, Hubbard posits that additional economic growth could come if the Trump administration increased support for science and defense research and funded the construction of applied research centers nationwide. Similar to land-grant colleges of the 19th Century, these research centers could be linked to regional university and city hubs, generating knowledge and “improving local capabilities in manufacturing and services.”
Hubbard argues that instead of tariffs, Trump could reduce the corporate tax rate, incentivizing companies to settle and invest in the U.S. rather than relying on “costly” tariffs. Recently, Trump spoke of lowering the corporate income tax rate to 15%, down from its current rate of 21%.
An Uncertain Future for the Environment
During his first term, Trump focused on reviving the country’s coal industry, promising to increase employment opportunities for miners and curtail the building of renewable energy sources. Trump succeeded in the latter initiative, appointing coal lobbyist Andrew R. Wheeler as head of the Environmental Protection Agency and rolling back more than 100 major climate rules. Still, during his presidency, 75 coal-fired power plants were shuttered and the industry lost approximately 13,000 jobs.
In recent months, Trump has signaled that he will end offshore wind energy leases, making it more difficult to connect new renewable energy sources to the grid. These efforts may extend the life of fossil fuels for a short period, but just like the decline of the coal industry, “such tactics would merely delay the inevitable,” according to climate economist Gernot Wagner, faculty director of CBS’s Climate Knowledge Initiative.
Wagner notes that specific climate policies from the Trump administration are currently uncertain, but generally, any efforts to stop the transition to a lower-carbon country would likely be futile, as electric vehicles continue to demonstrate increasing efficiency, and cleaner energy sources are seen as a boon to public health. By preventing an EV transition, Trump stands to damage U.S. competitiveness, especially in comparison to China, according to Wagner.
He added that imposing tariffs on imports would only increase the lag between U.S. and Chinese automakers as the two compete for electric vehicle dominance.
“Trump already levied a 25% tariff during his first presidency, and it did nothing to help US automakers prepare for the electric future; neither did the Biden administration’s 100% tariffs on Chinese EVs,” Wagner said.
Explore more expert insights and analysis on our politics coverage page.