Trump's policies exacerbate uncertainty, casting a shadow over American business investment

According to the Zhitong Finance APP, due to the uncertainty of the economic policies that U.S. President-elect Donald Trump will implement after taking office in January next year, American manufacturers are cautious about capital expenditures. A survey by the National Association of Manufacturers for the fourth quarter shows that respondents expect capital investment to grow by only 1.6% over the next 12 months, compared to 0.7% in the third quarter before the U.S. presidential election. Jay Timmons, the association's president and CEO, stated, "This is not particularly strong, but it is based on the current policy environment." He indicated that spending could be higher if Congress quickly passes a bill to extend the soon-to-expire 2017 tax cuts and implements other favorable tax reforms. In an interview on Wednesday, Timmons said that if the bill is passed in the first quarter of next year, spending could "significantly" increase, and optimism about investing in the U.S. would also rise. He noted that if the bill is delayed until later this year, corporate investment decisions may also be postponed. Scott Paul, president of the Alliance for American Manufacturing, stated that the level of capital spending by manufacturers in 2025 will depend on when the tax bill is introduced and whether businesses can utilize provisions such as immediate deductions for equipment and facility costs, as they did after the 2017 tax law was enacted. A forecast report released this week by the Institute for Supply Management (ISM) indicates that the expected growth in manufacturing capital spending in 2025 will be lower than in 2024, when spending was hindered by high interest rates. Timothy Fiore, chair of the ISM Manufacturing Survey Committee, said this is a cautious forecast, as concerns grow that Trump's threat to impose comprehensive tariffs could reignite inflation and disrupt supply chains. There is also uncertainty about which tariffs Trump will impose, as he has mentioned using tariff threats as a negotiation strategy. Federal Reserve Chairman Jerome Powell stated on Wednesday that it is difficult to predict the inflation threat posed by tariffs without knowing the actual trade policies that will be implemented, although he hinted that the extent of interest rate cuts next year may be reduced to address inflation pressures from Trump's policies. Powell said, "We do not know which countries and which products will be subject to tariffs, how long they will be imposed, or the scale of the tariffs. We do not know if there will be retaliatory tariffs. We do not know what impact these will have on consumer prices." Some economists have stated that Trump's promise to carry out mass deportations of illegal immigrants will also lead to a loss of needed workers in manufacturing and other industries. Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, stated that the uncertainty surrounding Trump's actual actions will "prevent manufacturers from increasing capacity investment until the policy situation becomes clearer."