The super-rich are ecstatic. Bitcoin’s value surged past $100,000 last year, and bankers were “dancing in the streets” after Donald Trump’s victory in November. Wall Street is already licking its chops over forecasts for stock gains in 2025.
Meanwhile, a stark year-end report showed an 18 percent jump in homelessness. And small business owners are grappling with uncertainty over Trump’s threats to impose tariffs and deport immigrants.
It’s the tale of a widening class divide: one that pits the super-rich against everyone else, even the normal-rich. The Trump economy could see a chasm between the big businesses poised to exploit next year’s changes and the small fish left scrambling.
“The businesses that are going to be most adept at that are large businesses with teams of lawyers.”
Take Trump’s promised tariff war. Under the new round of tariffs, economists warned, only the biggest businesses — those with the connections to flatter Trump and the resources to hire lobbyists — will be the big winners.
“There will be a rush for businesses to try to get exemptions from these tariffs. We saw this all over the place in the first Trump administration,” said Wendy Edelberg, a senior fellow in economic studies at the Brookings Institution. “The businesses that are going to be most adept at that are large businesses with teams of lawyers.”
Banks and Bitcoin
Companies affected by tariffs aren’t the only ones looking to expand their gains amid the upcoming Trump term.
Some of the most exuberant responses to the election may be the financiers who foresee looser regulations under Trump and the crypto enthusiasts who think Trump may take a wrecking ball to their industry’s rules.
Days after Trump’s win, JPMorgan Chase CEO Jamie Dimon said that bankers were “dancing in the streets,” no matter who they had voted for.
Wall Street is gaga about 2025. After two consecutive years of greater than 20 percent gains, analysts expect 10 percent or more rises in leading stock indexes next year as well.
There may be no group of business tycoons more excited than those in the crypto world, who bet big on the 2024 elections and have received a warm embrace from Trump, despite his earlier view of cryptocurrency as a “scam.”
Trump and his allies in Congress have promised to unleash crypto by doing away with regulations and enforcement, to the concern of watchdogs who worry that it could usher in a financial crash. With the entire industry basking in optimism since Trump’s win, the most well-known digital asset, Bitcoin, has gone on a huge run, hitting record highs.
Winners and Losers
Small business owners, too, were largely happy to see Trump win. A post-election survey from the National Federation of Independent Business documented a spike in optimism to a level above the 50-year average, for the first time since June 2021.
Such surveys, however, may simply reflect the fact that many small business owners are Republicans. During the Biden years, said Ryan Sweet of the forecasting service Oxford Economics, business owners said they were pessimistic — but they kept investing and hiring.
“We may see the flip side, at least in the next year, where business confidence is elevated, but hiring and investment may not live up to those lofty expectations,” he said.
One big drag for small business owners could be tariffs. John Arensmeyer, the head of Small Business Majority, a nonprofit group focused on under-resourced entrepreneurs, said the owners he has been talking to are “extremely concerned” about tariffs.
“The last thing they need is to have costs skyrocket even more due to tariffs.”
“They already have been struggling with inflation,” he said. “The last thing they need is to have costs skyrocket even more due to tariffs.”
Reports of business owners fretting about tariffs have been popping up around the country since Trump’s election. The owner of a Mexican grill in Utah worried about tariffs on peppers and spices from south of the border. An outdoor gear company owner in Portland worried that the products he manufactures overseas will face huge import duties. And hair salon owners are worried about surges in the price of dyes.
Edelberg and Arensmeyer stressed that the economy is already seeing the impact of Trump’s tariff threats — even though for the moment they are merely threats. Companies with the means are stockpiling imported goods ahead of the inauguration.
“Some can do that more than others,” Arensmeyer said. “But it’s actually an inefficient use of resources to have to go out and buy things you don’t need at the moment, simply to hedge against price increases.”
Not-Big-Enough Businesses
Small businesses are not likely to employ the armies of lobbyists that big companies already have deployed to Washington. During Trump’s first term, lobbyists profited handsomely from contracts with companies eager to win exemptions from tariffs, which are doled out by the federal government through an often hasty and obscure process.
The businesses that are poised to do best under Trump, said Edelberg, may be the ones with the political chops to score exemptions that their competitors cannot. While the competition increases prices to cover the cost of pricier imported goods, those businesses can raise prices, albeit to a lower level.
“The people who will benefit the most from tariffs,” she said, “are people who don’t see the costs of their inputs go up so much, and benefit from being able to raise their prices.”
Arensmeyer said, “Small businesses don’t have reason to expect that they’re going to be able to go lobby and get exceptions or exemptions.”
