The surprising election of Donald Trump as U.S. president is sending shock waves around the world — but it's apparently not enough to impress North American compounding executives.
Several executives from that field who recently spoke to Plastics News said they don't expect many big changes from the surprising result.
“After all that happened in the last 60 to 90 days before the election, now we have some certainty and can put plans in place to deal with reality,” said John Deignan, president of Americhem Inc. in Cuyahoga Falls, Ohio. “I think the [Federal Reserve] will be more important, but we don't see a dramatic change in the market. Global [gross domestic product] GDP growth should still be around 1.5 to 2 percent next year.
“Mexico will be interesting,” Deignan added. “But the rhetoric of an election is different than governing. I don't think [Trump] is going to unwind relationships between the U.S., Canada and Mexico.”
The fact that Trump has never held elected office also is affecting the opinions of compounding execs.
“Like most people, the election was a big surprise to us,” said Ryan Howley, president of Techmer PM in Clinton, Tenn. “What events happen now remain to be seen. Trump doesn't have a political track record to look at.”
“Trump said a lot of things during the campaign, so there's going to be some uneasiness,” added William Murray, president of Teknor Apex Co. in Pawtucket, R.I. “It's a question of which Trump we're going to get — one that's focused on building walls or one that's going to take a serious look at trade relations from a business point of view.”
Murray added that he's going to take a “wait and see” approach in the months ahead. Jean Sirois, Europe managing director with RTP Co. in Winona, Minn., agreed with that strategy.
“We should let time be our guide,” he said. “Lower taxes should encourage business, and infrastructure spending looks positive for building and construction.”
John Moyer, North America president of Asahi Kasei Plastics North America in Fowlerville, Mich., thinks U.S. GDP growth could be up a little more than expected next year, but he added that he'll be watching to see if Trump follows through on comments he's made about protectionism. “It's not good for us to button up globally,” Moyer said.
Other compounding executives were more optimistic.
“It's a positive sign that [Trump] is a businessman,” said Joseph Gingo, CEO of A. Schulman Inc. in Fairlawn, Ohio. “The view from the chemical industry is that relaxation of regulations is a positive for us.
“If tariffs are up, we'd have to supply more goods from [the U.S.], and that could help production,” he added.
At Penn Color Inc. in Doylestown, Pa., market development director Bob Kaminski said that the firm “is very hopeful that President-elect Trump will have a very positive impact on the U.S. economy.
“There are perhaps some fears about inflation and rising interest rates, and his impact on our business in Mexico is a bit worrisome, but we feel that he'll have an overall positive impact on the domestic economy in the years to come,” Kaminski said. “He's going to create jobs, and workers' wages are poised to increase very shortly, and those are good things.”
The overall mood was summed up by Steve Snow, division head with Clariant Masterbatches in Holden, Mass. “The U.S. has developed a seamless transition from one administration to another,” he said. “We're expecting business as usual.”
Resin market analyst Phil Karig said the election result could impact the broader economy, as well as environmental regulations.
“The return of unified Republican government to Washington quickly resulted in a rise in interest rates,” said Karig, managing director of Mathelin Bay Associates LLC in St. Louis. “Normally, rising interest rates are a concern since they could indicate that interest-sensitive purchases such as cars and houses will begin to slow, but there are likely to be some offsetting positives this time as well.
“A bipartisan agreement on infrastructure spending should pass early in the new administration and pump up PVC and other resin sales related to construction,” he added. “At the same time, infrastructure spending will create new jobs in the short-term and bolster disposable incomes.”
On the environment, Karig said that changes in environmental policy “are likely to loosen restrictions on oil and gas fracking and keep pressure on world oil prices.” That, in turn, should further bolster disposable incomes through lower gasoline prices and further improve the competitive position of U.S. plastics feedstocks, he explained.