In his candidacy and first few days in the Oval Office, President Donald Trump's primary jobs focus has been on manufacturing and manufacturing jobs. From air conditioners to automobiles, companies who make big ticket items outside the U.S. for import to American consumers have been put on notice, and many have reacted by saying they'll add jobs. Good news!
But while those industries and the White House work it out, the question now turns to what industry may be next on the President's fix-it list. I think it may be retail, and one company in particular; Amazon.com.
Here's why:
First, few industries rely on imports as much as retail. Most of what is put on retailers' shelves every day is made outside America, primarily in China. If the trade talk tilts more toward taxes on lower-value items, such as apparel, toys, or other consumer goods, the industry is going to have to make some hard decisions about sourcing and costs. Higher importing costs could mean higher consumer prices, lower margins, or both.
Second, the President is all about jobs, and few industries employ as many people as retail. The federal government estimates there are nearly five million Americans working in the industry. An industry, it must be noted, that is increasingly in trouble. Major retailers are either shrinking and closing stores, or shutting down their physical presence entirely to move online. Most industry experts agree that much of retail's recent woes are due to the boom in online shopping. And you can't talk about internet commerce without mentioning the hundred-billion dollar elephant in the room: Amazon. Not only does Amazon continue to capture a larger piece of the retail pie, but it has also just opened a Seattle store called Amazon Go that features no cashiers! Other retailers are reportedly testing similar, nearly human-less concepts. For many retailers, employees are just another cost they are trying to cut. So consider that if they're successful at slimming the collective workforce by even just five percent, that's a staggering 250,000 jobs, which would far outweigh the number of manufacturing positions we've been talking about lately. It's doubtful the President will sit idly by and watch that happen. Plus, remember something President Trump said in his campaign: "Amazon is getting away with murder, tax-wise." The company is definitely on his radar.
Finally, let's not forget President Trump's origins in commercial real estate. Though he's not known as a retailer per se, it would be difficult to imagine someone with a background in buildings as strong as President Trump's to simply sit and watch retailers fail and malls go empty. Plus, any friends of his with big commercial real estate operations may likely already be in his ear, whispering about the potential loss of billions of square feet of space.
I have no idea whether this will happen. Perhaps the President will turn his attention to other matters. But if you're talking jobs, trade and China, it would be difficult to imagine any industry that may need more "Trump-eting" in the next few years than retail.
