Trump State of the Union sets the stage for some of retail’s top issues

President Trump touted the benefits of recently enacted tax reform and set out his agenda on retail industry concerns from transportation infrastructure to immigration and international trade as he delivered his first State of the Union address in Washington Tuesday night.

“This is our new American moment,” Trump said as he promised bipartisanship and cited growing economic confidence, job gains and a soaring stock market during his prime-time televised speech before a joint session of Congress in the House chamber. “There has never been a better time to start living the American Dream.”

The speech came as NRF said this week that the nation has seen “a welcome relief” from economic inertia since Trump took office and called on him to back policy positions that benefit businesses, workers and the economy.

Trump cited estimates that the typical middle-class family of four will save more than $2,000 a year under tax reform while cuts in the corporate tax rate and relief for small businesses mean “American companies can compete and win against anyone else anywhere in the world.”

The president said many businesses are sharing the savings from lower tax bills with their employees, saying roughly 3 million workers will receive tax cut bonuses and citing retailer Apple, which has pledged to use part of its tax cut to hire 20,000 new workers.

Even with those benefits, Trump said a wide range of challenges to economic growth and job creation remain to be addressed.

‘Gleaming’ new roads
Addressing one of retail’s long-sought priorities, Trump promised action on a $1.5 trillion infrastructure improvement plan that he promised would deliver “gleaming new roads, bridges, highways, railways and waterways across our land.” Retailers are among the nation’s largest shippers and have called for increased infrastructure spending for years because crumbling roads and bridges have created bottlenecks that drive up transportation costs.

Trump said federal funds would cover only part of the total — he has proposed $200 billion in the past — with the remainder leveraged through partnerships with state and local government and the private sector. He offered few details, but said the permitting and approval process for construction projects should be streamlined to not more than two years, and one year where possible.

‘Merit-based’ immigration
Trump called for passage of the four-point immigration reform plan he recently proposed following negotiations with Congress, which he called a “down-the-middle compromise” that would lead to “merit-based immigration” and welcome “people who are skilled, who want to work, who will contribute to our society and who will love and respect our country.” The plan would provide a path to citizenship for individuals illegally brought to the United States as children, construction of a wall along the Mexican border, elimination of the visa lottery and an end to “chain migration” by allowing immigrants who become U.S. citizens to bring only spouses and minor children to the United States rather than extended family.

NRF is a member of the Coalition for the American Dream, which supports renewal of the Deferred Action of Childhood Arrivals program for “dreamer” children and has said that failure to extend the program would lead to companies losing valuable talent since many of those children are now adults employed by retailers and other businesses. NRF has voiced support for merit-based immigration but says merit should include low-skilled workers “willing to work hard” and with a “strong entrepreneurial spirit” along with highly skilled workers.

‘Strong enforcement’ of trade restrictions
Retailers rely heavily on imports to provide consumers with affordable products, but Trump continued to take a protectionist view on trade policy. He did not mention his rejection of the Trans-Pacific Partnership or his efforts to renegotiate the North American Free Trade Agreement, but said he will “fix bad trade deals and negotiate new ones” and “protect American workers” through “strong enforcement of our trade rules.” He emphasized efforts to create new manufacturing jobs but made no mention of the value imports contribute to the economy. NRF has agreed that NAFTA needs to be modernized but has called on the administration to “do no harm” to the underlying agreement and strongly opposes withdrawal from the pact.

Health care, job training
Trump touched only briefly on the Affordable Care Act, noting that the individual mandate to have health insurance or face tax penalties was overturned as part of the tax reform bill but not addressing the employer mandate that businesses provide full-time workers with coverage at levels set by the government.

With tax reform creating new jobs, Trump called for more investment in workforce development and training. He cited a need for new vocational schools but did not indicate whether the effort would include initiatives like the NRF Foundation’s RISE Up program for would-be retail workers. He also called for paid family leave for workers.