As President Donald Trump prepares for his second formal State of the Union address on Tuesday night, industry players will be listening for policy items that could impact the footwear business.
Chief among their concerns are overall health of the U.S. economy, trade relations with China and whether Trump sets a global or protectionist tone.
Leading up to tomorrow night’s address — it had been postponed from its original date of Jan. 29 because of the government shutdown, after Trump and Democratic leaders failed to agree on funding for a wall along the U.S. southern border — observers like Matt Priest were most concerned about “the trade dynamic” with other countries.
The president and CEO of the Footwear Distributors & Retailers of America said he is particularly looking for clues on trade with China, where the bulk of footwear is manufactured. He would also listen for details on whether President Trump planned to urge Congress to pass the United States-Mexico-Canada Agreement, or USMCA, a recently signed replacement of NAFTA or, conversely, signal that he is willing to impose additional tariffs on the neighboring nations.
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“Is he going to have economic engagement with the world or grasp at protectionist straws that have been the hallmark of his rhetoric when it comes to trade?” said Priest.
Any such remarks on trade could impact stock prices of public companies on Wednesday.
Economists have long speculated that the U.S. is approaching the end of economic expansion. And that, they said, could mean the country may soon experience economic contraction, which eventually leads to cuts in consumer spending.
To further stimulate the economy, Priest wondered if Trump’s speech would include plans for government investment in areas such as infrastructure and would he call for additional tax cuts.
“But at the end of the day, the State of the Union is nothing more than political theater,” Priest said. “It can be both interesting and frustrating. Policy proposals from the address are hardly ever enacted or realized because government is very divided.”
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